Bounce Back

A northern Michigan golf resort mounts a comeback from Chapter 11 bankruptcy.
Treetops Resort Dog Sledding
New Trails: Treetops Resort and Spa in Gaylord.

After emerging from bankruptcy over the summer, Treetops Resort and Spa, a 4,000-acre golf and ski facility in Gaylord, is moving ahead on the replacement of its convention center along with adding condominiums and other amenities.

With a clean balance sheet and a 2015 ski-golf season that exceeded 90,000 rounds — up 3 percent from last year — the resort is looking to put its Chapter 11 filing in the rearview mirror. “July was the best month we have ever had in our company from a gross revenue standpoint, and from a net income standpoint,” says Barry Owens, Treetops’ general manager.

To that end, management plans to demolish the current convention center, located at the bottom of a steep hill, and replace it with a five-story building above the current golf practice facility. The top three floors of the new structure will be condos with views that extend for miles over the valley.

The plans also include making the resort more pedestrian-friendly by connecting two hotel buildings and any new structures with covered, heated walkways. The new offerings will be near the original resort, with Treetops North, six miles away, continuing to serve as the golf center.

Owens says the owners reluctantly decided on a Chapter 11 bankruptcy filing in November 2014 because even though the resort had been making money since 2011, its balance sheet was a mess of legacy debt. “What was unique about our bankruptcy was there was no bank involved. We weren’t forced into it,” he says.

“Our owners, who had put in money over the years, chose to record debt by filing mortgages to themselves. What happened, over time, was we had accumulated about $35 million in mortgages and deferred interest, none of which was being paid. This created a large strain on our balance sheet. It wasn’t pretty.”

Owens emphasizes that no jobs were impacted by the bankruptcy. “We didn’t lay people off, or reduce hours, or close certain facilities. It was business as usual,” he says of the resort that is Otsego County’s largest employer.

The present ownership group, heavy on former Detroit auto industry executives, acquired the resort in 2002. They include former Daimler-Chrysler CEO Robert Eaton; the late Harold “Red” Poling, former chairman and CEO of Ford Motor Co.; Al Wisne, former owner of Pico Corp; John Bates, chairman of Heidtman Steel; Bob Lanigan, former CEO of Owens Illinois; and land planner Bob Sierra.

“We now have a couple of commitment letters from banks that we’re analyzing,” Owens says. “We’ll soon have an announcement about reinvesting money into the property.”