The Links at Summerly Golf Course, which opened in February 2008, was the first and is still the only golf course in the City. This Golf Course survived in beautiful condition during the Great Recession. That’s why it’s particularly upsetting to see this Golf Course in such a poor condition today, given the improving economy. Right now, the Links at Summerly Golf Course website warns golfers of the “abnormal ground conditions” and asks them to invoke US-Golf Association rule #25 for bare areas.
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No other golf course, from Corona to Temecula, is in such poor condition. Neither is the turf at our local parks that use an equivalent amount of water for irrigation.
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McMillin Homes is the current master developer of the Summerly Development and desired to put the golf course up for sale in 2012. Per the existing Development Agreement, the City had the right to accept the dedication of the golf course, but wisely decided that the City should not be in the business of operating golf courses if provided by the private sector. In lieu of the City rejecting the dedication, but recognizing that the Links Golf Course is a public amenity, the parties agreed to new Covenants, Conditions & Restrictions or CCRs (See City Staff Report dated 08/28/12). The parties finalized the new CCRs with the goal to provide assurances that the golf course would continue to be operated, professionally managed and open to the public. The updated new CCR’s would survive the sale and apply to future owners.
Under CCRs Section 5.b. (Ownership Rights)…”any transfer by Owner shall be subject to this Declaration and shall require consent by the City Manager of the City, which consent shall not be unreasonably withheld…”.
The Links at Summerly Golf Course was sold to World Capital Market (WCM) Inc. in September 2013. At the time, this company was under investigation by the Commonwealth of Massachusetts, State of California Department of Business Oversight, Securities Commissioner for the State of Colorado and the Federal Securities & Exchange Commission. On January 8, 2013 the State of California issued a “Cease & Desist” order to WCM. On March 27, 2014 the Links at Summerly Golf Course was seized by the Federal Security & Exchange Commission (SEC) and charged World Capital Market Inc. with operating a Ponzi Scheme. The Feds have turned-over operation of the golf course to a receivership.
I believe the catastrophe of having the only golf course in City of Lake Elsinore being sold to an alleged Ponzi Scheme and assets seized by the Feds was totally preventable. City Manager Yates had the authority and responsibility under the CCRs to deny the sale of the golf course to this alleged Ponzi Scheme based on reasonable grounds.
Reasonable grounds that where available at the time include…
1. World Capital Markets (WCM) Inc. and associated entities described itself as a “global merchant investment bank” with various security offerings to investors; however, they were not registered with the Federal SEC as required by law. Did the City Manager check the SEC status that is readily available online before consenting to the sale?
2. According to the SEC, World Capital Markets Inc. falsely claimed business relationships with the following companies Siemens, Denny’s, Goldman-Sachs and Stouffer Hotels. The Stouffer Hotel claim is particularly laughable as it was sold to Marriot in 1997. Did the City Manager request and check any references before consenting to the sale?
3. The Links at Summerly Golf Course was actually recorded and titled under “Kingdom Capital”. Did the City Manager ever check online on how short a time that Kingdom Capital was in business? The answer was just 2-months (August 13, 2013).
https://delecorp.delaware.gov/tin/controller
4. Any reasonable person who viewed World Capital Market Inc.’s and associated company websites would have raised a red flag.
In my opinion, this was a colossal management failure by City Manager Grant Yates.
