Dan Harkey's empty promises to Point Center Financial investors is illustrated in the following video. Thousands of people invested with Dan Harkey based on these promises; promises that were never kept. This is only the tip of the iceberg of the house of cards upon which Point Center Financial was built.
Death of a Golf Course - Palm Springs Country Club Video Survey
A lush and beautiful 50 year old historic golf course played by Presidents and celebrities like Frank Sinatra, Dean Martin, Sammy Davis Jr., and Gene Autry. The golf course was operating when acquired in 2003 for under $3 million dollars by Lynn Burnett, a Newport Beach based developer. The property was zoned as "open land" and was not entitled for any use other than as a golf course. Burnett failed to gain any zoning changes nor entitlements prior to his death at the end of 2007.
Burnett cancelled his contract with American Golf and closed the course in May of 2005; the income from which would have offset the cost of maintenance while the course was in his possession. The golf course residents filed numerous complaints as palm trees and fairways began to die from lack of watering. Point Center Financial allowed the property to fall into further decay after it foreclosed on Burnett in late 2007; allowing the homeless, drug dealers, and vandals to destroy property and infrastructure. One resident counted over 250 dead trees. The City of Palm Springs filed numerous citations and finally a lawsuit against Point Center Financial to get action and compliance. All to no avail.
Point Center Financial provided multiple loans to Lynn Burnett. The first loan for the golf course was used to pay back old investor money on previous loans made by Point Center to Burnett on an unrelated development (Rio Vista in Cathedral City, CA). A second tranche of loans were made to Burnett by Point Center on the golf course for $19.2 million and $780,000 respectively for a total exposure of $20 million based on a $33 million "as-is" appraisal.
The property was sold by Point Center for $1 million in March 2013 leaving $1.3 million in delinquent property taxes owed to Riverside County and the City of Palm Springs. Point Center paid itself heavy loan origination and escrow fees at closing, then accrued loan servicing fees and REO asset management fees based on loan value for years while the property was deteriorating under its control. The above video demonstrates the results of Point Center's asset (mis)management.
There are many mysteries surrounding this property, from Burnett's political contributions to Diane Harkey's political campaign to why Dan Harkey failed to demand performance bonds, payment bonds, in-place take-out financing, and fully approved entitlements prior to extending such a risky loan. Moreover, how does a $3 million operating golf course merit a $33 million "as-is" appraisal value?
In the mean time, residents of the homes surrounding the dessert that was once Palm Springs Country Club, worry about what will become of the now desolate real estate and the impact it will have on their views and property values. Residents have had only one means of ingress and egress ever since the gates of the club were padlocked in 2005 raising evacuation concerns should a major fire disaster occur.
