The Heritage Isles Community Development District will pay slightly more than $900,000 to settle with bondholders who helped pay to build the public golf course in the residential development.
By a unanimous vote, the five-member community taxing authority has agreed to submit an offer to buy back the recreational revenue bonds issued to build the golf course at a discounted rate of 25 cents on the dollar. The creditors have until Dec. 17 to respond to the offer.
The district's board of supervisors has received a commitment from about 72 percent of the bondholders to accept the offer, Heritage Isles CDD Chairman Dan Barravecchio said. But the board plans to set aside $905,000 to cover all of the outstanding bonds.
"It will allow us to turn a new page on the future of the CDD and the community," Barravecchio said.
The district stopped payments to cover the debt on its golf course more than two years ago.
Early this year, the district supervisors offered to buy back the bonds at 15 cents on the dollar. The district paid $140,000 to settle with several creditors.
Supervisors Barravecchio, Steve Stark, Sherry Parrish, Frank Camara and Steve Hluchanyk hope their latest offers will resolve the matter for good, the chairman said.
If not, bondholders who choose not to take it must decide whether it is worthwhile to restructure the debt or seek other legal recourse. Bondholders typically include banks, brokerage firms and investment companies.
Buying back the recreational revenue bonds at a discounted rate will save the district nearly $4 million. If the district had to pay the original outstanding principal balance with interest, it would have cost $4.88 million as of Oct. 29, district records show.
In 1999, the district issued $8.78 million in bonds to build the golf course and related facilities for public use.
The 18-hole course on Plantation Bay Drive, north of Cross Creek Boulevard, has taken a financial toll on the district through the years.
The golf course and a restaurant at the Heritage Isles clubhouse were supposed to raise enough money to pay off the bond debt.
But both operations performed below expectations for years, adding to the district's financial hardship and inability to meet its financial obligations to bondholders, Heritage Isles district officials said.
Despite attracting more players to the golf course, the district stopped making bond payments in October 2009, defaulting on the debt. At the time, the board said the district's debt service funds had been depleted and it did not have money to keep making payments.
The golf course now generates enough money to cover operation expenses, but still not enough for the debt payments, Tracy Robin, the district's attorney, has said.
Homeowners in the subdivision are not affected by the defaulted bond payments, he said. The golf course also cannot be closed.