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Members Sue Daufuskie Island Resort Over Possible Loss of Member Privileges
By Michael Welles Shapiro, The Island Packet, Hilton Head Island, S.C.McClatchy-Tribune Regional News

Oct. 29, 2008 - The possible sale of some assets by the Daufuskie Island Resort and Breathe Spa has resulted in a lawsuit by members of a group that gets various privileges at the spa. The members say they want more input into what gets sold.

The members' group, the Melrose Club, says it's worried member privileges -- which include access to 36 holes of golf, tennis courts and a beach club, as well as ferry rides and restaurant discounts -- could be jeopardized by future sales.

Tim Foley, asset manager for Bill and Gayle Dixon's Daufuskie Island Properties, called the suit a "logjam," saying it was blocking possible sales and leases of parts of the resort, which he said are crucial to the resort's future profitability.

On Gayle Dixon's Web site,, she writes that "we are currently working on nine separate and distinct deals," which would allow Daufuskie Island Properties to pay off debt.

In a letter to all club members, Foley wrote that the Dixons want to work with other businesses to "offer better and more unique services. ... This is critical to correcting operational inefficiencies that have for decades resulted in extreme losses each and every year."

In a subsequent letter sent last week, Foley wrote if the lawsuit doesn't get resolved, the Dixons will scale back member ferry services starting Friday. Members currently ride for free on any of the 18 ferry runs between Daufuskie and Hilton Head. Starting Friday, however, they might only be able to ride for free on a 7 a.m. ferry leaving Daufuskie and a 6 p.m. ferry returning to the island. Foley also mentioned in one of the letters that other member privileges could be cut.

Responding to Foley's letter, the Melrose Club's board of directors wrote a letter saying they were not trying to impede the Dixons' efforts to get onto stable financial footing.

"We are not necessarily against any of (the Dixons') plans (to sell or lease assets). We simply want to assure member rights going forward." Mitch Evans, a Daufuskie resident who sits on the board, said the suit was "the only way to get a seat at the table" as the Dixons make business decisions that may affect members.

Foley has been on Daufuskie this week meeting with members, trying to answer questions and resolve the issue. Gayle Dixon will be holding a meeting with members at 7 p.m. Nov. 7.

Alexander Beard, a Mt. Pleasant-based lawyer representing the Melrose Club, was also optimistic that a resolution was possible. He said members want more assurances that their privileges are safe if assets are sold.


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Copyright (c) 2008, The Island Packet, Hilton Head Island, S.C.

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