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Cypress Equities May Buy Sillerman’s Defaulted Caribbean Resort

Cypress Equities Inc., the private-equity firm tied to Dallas Cowboys star Roger Staubach, plans to take over an unfinished Caribbean resort after developers including Robert Sillerman, founder of “American Idol” owner CKX Inc., defaulted on their loans.

Cypress signed a binding accord to acquire Temenos Anguilla out of receivership by purchasing its debt at a discount, according to a document obtained by Bloomberg News. Credit Suisse Group AG had arranged $180 million of loans, according to a 2006 statement. The project on Anguilla, part of the British West Indies, went into receivership in February.

The 275-acre complex, which features beachfront views to St. Martin and Anguilla’s only golf course, would be the latest troubled resort to go to a private-equity firm as lenders unload distressed debt. Barry Sternlicht’s Starwood Capital Group planned to take control of the Viceroy Anguilla, a 35-acre resort with 3,200 feet of beachfront and an 8,000 square-foot spa, after purchasing that development’s loans in October.

“Lenders who are now in control don’t have the appetite to manage or finish building these large resorts,” said Ben Thypin, an analyst at Real Capital Analytics Inc. in New York, adding that values for hotels and resorts may have bottomed out. “Private-equity firms are willing to get their hands dirty as long as they get in at a low price,” he said.

Randa McMinn, a Cypress spokeswoman, declined to comment.

Distressed Deals

KSL Capital Partners LLC, a buyout firm that focuses on travel and leisure businesses, completed its purchase of California’s Squaw Valley Development Co., including the ski resort that hosted the 1960 Winter Olympic Games, on Dec. 7. Last month Tamarack Resort LLC, a bankrupt Idaho ski development, received a $40 million offer from an Idaho company called Green Valley Holdings LLC.

Investors including Oaktree Capital Management, Avenue Capital Group and Starwood Capital won approval from a bankruptcy judge last month to buy the assets of Sea Island, a Georgia resort that aspired to be the “Pebble Beach of the East.” It underwent a $200 million renovation before seeking bankruptcy protection in August.

Completion of the Temenos deal is subject to government negotiations to revise the development plans, according to Jeff Woolson, a managing director of CB Richard Ellis Inc.’s Golf & Resort Group who is handling the sale. The Mediterranean-style whitewashed resort has 4,500 feet of beachfront along Anguilla’s southwest shore.

Project Status

Temenos’s original developers, including Sillerman, 62, completed its Greg Norman-designed golf course and clubhouse and built most of 59 residential units before defaulting in 2008. The rest of the resort is unfinished or not started, including a 32-unit condominium-hotel and spa, 45 planned villas and estate homes and 14 acres of additional land.

“This is a challenging project in a difficult time,” Sillerman said in an e-mailed message, adding that he invested more than $200 million in the development. “I hope, for everyone’s sake, that the government of Anguilla recognizes the obstacles Cypress faces, and that Cypress maintains their enthusiasm for the project.”

The island’s government prefers more hotel accommodation and fewer residences than the original development plan agreed with Flag Luxury Properties (Anguilla) LLC, according to Woolson, who is lead broker selling the property with Dominic Murray at Smiths Gore BVI, according to the website listing. Several residential buyers have already acquired separate titles and are completing their vacation homes, Woolson said.

Government Concerns

“The biggest thing that needs to be accomplished is the negotiation of the memorandum of understanding with the government of Anguilla, which is going on right now,” he said.

Cypress Equities, an affiliate of SRS Real Estate Partners, is developing more than $2 billion in property, according to its website. Royal Island, a private island in the Bahamas with 15 miles of coastline featuring an 18-hole Jack Nicklaus Signature golf course, is among the firm’s developments.

Chris Maguire, chief executive officer of Cypress Equities, founded SRS with Staubach, a former National Football League quarterback who is also chairman of the Americas at Chicago-based Jones Lang LaSalle Inc.

Jones Lang LaSalle, the world’s second-largest commercial real estate broker after CB Richard Ellis Group Inc., bought Staubach Co. for $613 million in 2008. The sale didn’t include Cypress Equities. Staubach, 68, who founded his self-named firm in 1977, was quarterback for the NFL’s Dallas Cowboys from 1969 to 1980, winning two Super Bowl championships.

Sillerman founded CKX, which owns the American Idol television franchise. He stepped down as chairman and CEO in May to pursue a takeover attempt, and remains the company’s biggest investor with 21 percent of the stock, regulatory filings show. CKX’s board rejected buyout efforts in October.

-- With assistance from Sarah Rabil in New York. Editors: Rick Green, James Gunsalus

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