Difficulties for King’s Challenge Course in Michigan

The former owners of the King's Challenge Golf Course in Cedar, Mich., are suing Sugar Loaf Development LLC to foreclose on its current multimillion-dollar land contract, charging that it defaulted on its December payment and failed to pay summer taxes. They also expect to put the property in Leelanau County up for public auction this spring.

The investment group, headed by John D. Sills and his SJS Development Co., said the new owners failed to make a required payment of $12,500 on December 5 and owe about $27,000 in Cleveland Township property taxes, due last September. "The land contract has been in default since September 15, 2006 or longer," Norman Droste, attorney for Sills and his partners, wrote in a letter to the current owner. Droste said he sees no chance that the new owners will retain control of the golf course. "The foreclosure has commenced, and a judgment will be entered three months after we filed the lawsuit," he said. That means the foreclosure would be final in early April.

Court records indicate that Sugar Loaf Development LLC bought the 162-acre golf course and adjacent property for $4.4 million in May 2005.

The golf course is south of M-22, next to the now-shuttered Sugar Loaf Resort. The resort's failure to resume operations has been seen as a drag on the viability of King's Challenge. Sugar Loaf Development paid $3 million for the golf course, its buildings and fixtures; nearly $1 million for 115 adjacent acres; and about $400,000 for several additional parcels. The deal involved a $1.9 million upfront payment, with the remainder scheduled to be paid in monthly installments until May 2010.

Edward Fleis and Brian Sculthorp, both residents of the Sugar Loaf area in Cedar, are members of Sugar Loaf Development. That entity, based in Suttons Bay, was formed just several months before the King's Challenge purchase in 2005. Neither could be reached for comment.

Sills' SJS Development is the general partner for the investment group formed in 1990 to operate the golf course until it was sold to Fleis and Sculthorp's group in 2005. Sills' group is known as the Sugar Loaf Ridge Development Limited Partnership and is based in Bloomfield Hills, Mich., state records indicate. Sills is apparently not foreclosing on Fleis and Sculthorp's other golf course at Sugar Loaf, the Sleeping Bear GolfClub. Sleeping Bear was also purchased by a Sills-led partnership in May 2005.

The above article is courtesy of the Traverse City Business News.