THE LANDING AT SEVEN COVES
Lake Conroe, Texas
The Landing at Seven Coves occupies a special position at VRI as perhaps the most difficult workout undertaken to date. Faced with an uncertain future because of a bankrupt developer, the Association made a well-intentioned attempt to control its destiny by negotiating with the lenders to acquire the unsold inventory and build a $1.4 million recreation center. In the process, the Association subjected itself to massive debt. Title problems frustrated the Association's planned resale program, and the Association's financial demise seemed assured.
The debt burden of $21 million was simply too much. VRI negotiated with the lender group and argued that the Association mortgages represented a liability to the lender group, not an asset. Following years of very tedious negotiations, VRI finalized a lender debt reduction arrangement that provided monumental relief for the Association and resulted in a manageable annual budget and stabilized maintenance fees. The dramatic debt reduction allowed the Association to enter the final recovery phase, which included a buy-out of the lender's position with funds made available by a special assessment and a modest conversion program to further improve the Association's financial conditions. Today the workout continues amidst a stabilitzed resort and with the sale of about 600 intervals per year, a balanced budget.