When the Club Folds, the Houses Still Have to Be Emptied

The destination club model promised members something specific: the pleasure of a second home without the chores of one. No mortgage, no property manager, no linens to replace, and no furniture to deal with when you were done. The archive is full of clubs making that case. It is also full of what happened when the clubs ran out of money, and in those stories the houses, and everything inside them, come back into view.

Seven houses, regardless of price

The clearest example is High Country Club. About a year after it collapsed, seven of its residences were scheduled for auction at the Denver Marriott City Center on March 19, 2010, to be sold regardless of price. The list ran from a one-bedroom apartment at 1600 Broadway in New York to a three-bedroom unit on Masters Boulevard in Orlando. The Phoenix Club, a group of members and creditors hoping to revive the club, had already warned that the homes had not been maintained since December 2008 and would need considerable expense for cleaning and upkeep.

The sale was handled by Sheldon Good & Company, whose own case study later put the total for all seven properties at $4.3 million. The Orlando unit sold for $418,000. It was the only Florida property in the lot, but not the only Florida connection in the club files. Choice Escapes, the budget club that shut down, restarted and then shut down again, listed exactly one owned property by 2007, and that property was in Orlando too.

Bulk bids, and the homes that went back

Ultimate Escapes was a far larger case. A month after its September 2010 bankruptcy filing, the chief restructuring officer told members the club had accepted bids for a number of assets, including a bulk bid that might let them keep travelling to most of the homes they knew. The bulk bidder was Demeure. By the end of November, Demeure owned 11 former Ultimate Escapes residences, with four more waiting to clear title and the rest of the portfolio available to lease.

The houses that did not make the cut went back to the lender, CapitalSource. Demeure's founder, Peter Schwartz, described them as the ones that classically had low popularity and high operating costs, or sat in places where comparable homes could be had for less. Each of those houses was furnished for guests who would not be coming back, and somebody had to decide what happened to it all.

Some of the homes Demeure did keep were offered for sale. Its timeline for the transition gave members interested in buying one of the former Ultimate Escapes residences until November 23, 2010 to register. Prices started at roughly $250,000 and went up to $3.5 million for Villa Eternidad, a four-bedroom house of more than 5,000 square feet in Cabo San Lucas. For a few weeks, people who had paid to borrow these houses had the chance to own one outright, furniture and all.

Some of the most visible homes were not houses at all. A few weeks before the filing, the site had reported on the renovation of the Trump International Hotel & Tower in New York, where Exclusive Resorts had nine newly renovated residences and Ultimate Escapes counted five more. When the bankruptcy papers arrived, the same hotel appeared among the club's notable unsecured creditors, owed nearly $500,000. Even the city apartments, it turned out, came with bills that outlived the club.

Members who owned their own houses

Demeure's model added a twist. Its timeline began with setting up Ultimate Escapes members who had homes they wished to contribute to the club, so some members were no longer only guests in club houses but owners bringing their own second homes into an exchange. That blurred a line the industry had drawn for a decade, between owning a vacation house and belonging to a club.

It is also a reminder that club members and second-home owners were often the same people. Florida has more seasonal homes than any other state, and for a family holding both a club membership and a house there, deciding to simplify meant two separate problems. The membership could at least in theory be resold. The house, and the furniture, art and silver collected in it over decades, needed a different plan. Firms that handle estate purchases in Palm Beach and the nearby towns deal with exactly that kind of downsizing: a seasonal house closed up, and its contents valued and sold as one lot.

The resale question

Selling the membership was rarely simple. In April 2010 the site found memberships at leading clubs listed on eBay and Craigslist by members trying to get out. Most clubs needed two or three new members to join before one departing member was repaid, and for anyone deep on a resignation list the wait could run for years. M Private Residences had opened a secondary sales channel, and the Ritz-Carlton club gave members deeded ownership. Most clubs offered neither.

That arithmetic explains why the failures hit so hard. When a club stopped selling new memberships, the resignation list stopped moving, and a refundable deposit became a promise with nothing behind it. High Country Club's founder had said as much in his 2008 letter. Tanner & Haley's Chapter 11 filing in 2006 had shown the same thing earlier, across 874 members in three clubs.

The Florida club that owned nothing

One more Florida thread runs through the archive, and it is a darker one. Vita Luxury, which called itself Destination Club 2.0, promised butlers, chefs, Bentleys and charter jets at $1,500 an hour. By October 2008 its phones were dead, and its web designers said the people behind it had moved to the Bahamas. A former employee wrote that the club owned no homes, no cars, no boats and no airplanes. Its backers had earlier been involved with another Florida venture, Grand Legacy Club, which had left a trail of unpaid creditors.

Vita is the extreme case, but it makes the general point. A club's villas, cars and furniture were only as solid as the balance sheet behind them, and the members who came through best were the ones who knew exactly what they owned and what they merely had the use of.

Closing up

Read today, the failure stories in this archive are less about luxury than about loose ends: houses waiting for a buyer, deposits waiting for a refund, and families deciding what to keep. Some of those decisions were about memberships. Many more were about the houses members already owned, and the things inside them that had been collected over a lifetime.

For heirs or owners clearing a Florida house today, the work starts with knowing what is worth keeping. A buyer that specializes in full estates and collections in Delray Beach can look at a houseful of furniture and decorative pieces at once, while a dealer in antiques and collectibles is the better first call when the question is one cabinet of porcelain or a single set of silver rather than the whole house.

The club directory marks which clubs folded and which were merged into others, and the glossary explains the terms, from equity clubs to planned occupancy, that decided which members got their money back.