Madison-based Great Wolf Resorts Inc. announced that it has sold the 182-room Blue Harbor Resort in Sheboygan to Claremont New Frontier Resort LLC, which was formed by Wheeling, Ill.-based New Frontiers Capital and Bridgewater, Mass.-based Claremont Companies, for $4.2 million.
The 182-room resort and conference center was built in 2004, along the Lake Michigan shore on a peninsula between the lake and the Sheboygan River, at a cost of $54 million.
“We are honored to be joining the Sheboygan community, and we look forward to bringing even more guests to the Wisconsin shores of Lake Michigan,” said New Frontiers Capital president Randy Dzierzawski.
“We have given this purchase opportunity a great amount of review, and have come to the conclusion that this is a great property, in a great city, on a Great Lake,” said Elias Patoucheas, president of Claremont Companies. “Blue Harbor Resort is a special place, and with its unique waterfront location and classic architecture, it can be the setting for creating great memories for families, couples, business groups, golfers and water-lovers.”
As part of the deal, Great Wolf Resorts made a $2.5 million payment to the city of Sheboygan, relieving the company of all obligations under the terms of its original agreements with the city, consisting of minimum guaranteed amounts of room tax payments to be made through 2028, and real and personal property tax payments to be made through 2018. The carrying value of the liabilities associated with those minimum payment obligations was $11.6 million, the company said.
The city provided a $4 million loan and $8 million in additional assistance to Great Wolf to build Blue Harbor.
“Sheboygan is thrilled to welcome Claremont and New Frontiers into our community,’ said Sheboygan Mayor Bob Ryan. “Blue Harbor is a unique gem in the area and we look forward to watching it flourish under new management.”
The resort has struggled to attract guests year-round to a community that is not seen as a tourist destination by many. The resort anchors Sheboygan’s South Pier District which, despite its location between Lake Michigan and the Sheboygan River, has been slow to attract additional development.
Great Wolf put Blue Harbor on the market in mid-2010. In 2009, the company recorded a $24 million write-down of the property and company executives placed the resort’s fair market value at $6 million after the write-down.
“The sale of the Blue Harbor Resort is another step in the execution of our strategy to increase our financial flexibility and to focus our efforts on expanding our company through management and licensing arrangements rather than direct ownership of real estate,” said Kim Schaefer, chief executive officer of Great Wolf Resort. “We have further improved our balance sheet and liquidity position by eliminating nearly $12 million of debt.”
During the next several months, Claremont New Frontier Resort said it will work to upgrade the interior design of the resort.
“Sheboygan will have a new partner that will help to ensure a solid, long-term tourist destination, as well as be an important employer and source of tax revenue,” said Dzierzawski.