Averting the financial disaster it faced earlier this year, Callaway Gardens has completed the sale of 2,560 acres of prime Harris County land to an Atlanta real-estate broker who plans to use the forested acreage for hunting with his sons.
Callaway Gardens Chairman and Chief Executive Officer Edward Callaway, grandson of the resort's founders, said the $4.63 million deal closed Thursday in Atlanta. The property, which includes portions of Pine Mountain Ridge and Mountain Creek, was purchased by Brad Smith, managing partner of Atlanta-based Resource Real Estate Partners.
"I bought the property just for recreation," Smith said Friday by phone. "It's a gorgeous piece of land, as all of the Callaway land is down there. And I like the Pine Mountain area a lot."
Smith has two teenage sons who enjoy hunting deer and turkey with their father. The land he bought is considered some of the best privately owned property in the Southeast in terms of wildlife because its hardwood and pine trees have gone undisturbed for decades.
"It was a pleasure dealing with those people at Callaway," said Smith. "They're good folks and I just love that area. It was good to be able to help them out, and I love the land and can't wait to spend some time on it."
One thing that Smith cannot do with the 2,560 acres is develop it, Callaway said. It was in 2007 that the resort's nonprofit parent entity, the Ida Cason Callaway Foundation, applied for and was granted a conservation easement by the Georgia Forestry Commission. It had done the same thing in 2004 with 2,700-acre Cason J. Callaway Memorial Forest.
That easement prohibits any major construction on the land, with the exception of a lodge on 15 acres of it. Smith did not say if he plans to do that.
"He's a reasonably significant player of land in the Southeast," Callaway said of Smith. "He's bought land in Meriwether County and other places. This was the prettiest he had seen, and he was glad to get it.
Because it has that easement on it, that's a little over $1,800 an acre. So it's relatively inexpensive."
The deal completes Callaway Gardens' strategy of selling off large chunks of its land to pay down a debt load that had grown to $44.5 million in March 2011.
In July, the foundation sold 4,500 acres to Lands' South Ventures LLC, a company headed by Waffle House Chairman and CEO Joe Rogers Jr. That sale brought in $8 million.
"It's got good stands of timber on it and it's in a good location. All I was looking for was a nice timber investment," Rogers said at the time. His property does not have a conservation easement.
Callaway Gardens' plan to save itself from bankruptcy has had multiple tentacles. Last December, another of Rogers' companies, Yellow Sign Inc., purchased a $22 million debt note owed to Columbus Bank and Trust, an affiliate of Synovus Bank, which is headquartered here in Columbus.
The resort also sold its conference center to Atlanta-based Noble Investments Inc. for $12 million, along with 40 cottages for $4 million. Noble also owns the Marriott-branded lodge and spa, which opened in 2006. It will use the money from the latest land sale to pay back the bulk of what it owes Synovus.
With the debt dust settling, Callaway said the situation is now under control.
Total debt will be about $7.5 million -- $4.5 million for the foundation and $3 million for the resort -- figures that are "sustainable" because of the cash flowing into the resort through its admission fees and other money-making areas of the gardens. Callaway Gardens' annual budget is about $30 million.
"It's like somebody took an anvil off our backs," said Callaway of the wheeling and dealing that has taken place to save the resort from collapse.
He stressed that there are no plans whatsoever to sell any more of the land, which now has been slashed from 13,000 acres to about 6,000 acres.
"Here's my analogy: We were 35 feet below water and drowning, and now we're 10 feet above water, our heads well above water," the CEO said. "And we can begin to think strategically long term about our mission, what we are trying to do, how do we make it better to fulfill that mission of connecting families with nature and outdoors that's good for both. We don't have the impossibility of making it work. We now have the possibility, and it's wide open."
Callaway said the pressure has been intense through the entire ordeal and on a personal level as well, with his father, Howard H. "Bo" Callaway, suffering a cerebral hemorrhage in early June just after giving his approval to the land sales. The elder Callaway now is at Spring Harbor retirement community in Columbus, with his condition slowly deteriorating.
Edward Callaway spoke of the "sense of obligation" he has felt throughout the restructuring and property sales, knowing he had to keep alive the wishes of his late grandparents, Cason and Virginia Hand Callaway. That mission is to connect people, families in particular, with nature in a serene and educational setting.
"To let go of that would hurt my soul, I think," he said. "That would be very painful. So I'm extremely pleased to be a part of this because I'm not sure anybody else could have sold 7,000 of Cason and Virginia's 13,000 acres. That's tough medicine. I'm convinced it was the right medicine. I'm glad my father was with me to me make those choices so we have a multigenerational look on this strategy."
Callaway Gardens has seen annual visitation drop from a one-time peak of 1 million to under 400,000 last year.
A rebound appears to be materializing, said Callaway, who expects attendance to rise 5 to 10 percent overall this year.
The Fourth of July and Labor Day holidays have been strong, he said, with a cool fall likely to draw more people through its gates. Its popular Fantasy in Lights holiday attraction also begins in November.
"We'll probably catch our breath this fall and think through what we want to do next year and the year after to start adding things for people to do," said the CEO, pointing out the resort's new Treetop Adventure attraction has done well.
He also is thinking about opening a mountain bike center.
Back to the financial side, there is the matter of launching a capital campaign to raise an estimated $25 million from the community and various benefactors for more improvements to the gardens. That may come next year, he said.
But Callaway said now is simply the time to digest what has been accomplished, specifically rescuing the family-owned resort from oblivion. Taking a deep sigh, he joked, "We just finished the race. I'm not running another one right now."