The owners of the Holmes Harbor Golf Course said Thursday the course will be shut down on Sunday.

The March 14 closure follows the closure of the Beachfire Grill near the 18-hole golf course in late January.

Holmes Harbor Community Partners, the owners of the property, said in a statement that the sour economy and the inability of the company to restructure its debt were the prime reasons for the closure.

“As evidenced by the recent bankruptcy of Whistler Resort, the recreation business, along with the collapse of the housing market, has significantly impacted revenue sources for operations and has negatively impacted our overall development operations,” the Schuster Group said in its statement. “In an effort to try to continue our operations, we have attempted for over 14 months to work with our bank to restructure our debt to better meet our operational needs during these unprecedented challenging times.”

“Unfortunately, as our financial partner, we were unable to reach a tenable agreement with the bank. Certainly, the ‘bail out’ program as intended is not working and unfortunately we have been unable to ascertain how to tap into these monies meant to help business owners and sustain employment,” the statement continued.

Company officials said such recent events created “the perfect storm in which it is simply no longer viable to continue operations.”

The firm is hoping to sell or transfer the golf course so the course can reopen in the future.

The public, par-64 course was designed by Sikma Enterprises, Inc. in 1994. Developer Mark Schuster bought the course from Seattle Supersonics legend Jack Sikma in 2003.

It’s been a popular place to play. The course was ranked in the top 20 golf courses in Northwest Washington by Northwest Business Monthly in 2007.

Schuster said Holmes Harbor Community Partners was about six years into the company’s 10-year development plan for the property when the recession and credit collapse hit.

In addition to major renovations of the golf course and the clubhouse, the company also planned a marina and the construction of 130 condos and single-family homes. About 35 homes have been built so far.

“We’ve invested in substantial infrastructure in the golf course. And so with all the money and the time that we’ve spent, we’re very saddened, frankly, that we were not able to see the full potential of our vision come to fruition,” Schuster said.

The golf course and some of the surrounding property is owned by Holmes Harbor Community Partners, a limited liability corporation and one of the independently managed projects in the Schuster Group’s portfolio.

Three employees will lose their jobs with the closure of the golf course.

“We’re doing the best we can to help them through this transition,” Schuster said.

Schuster said the golf course has been for sale for a year, but the company has not received any viable offers.

He also noted public and private golf courses throughout the country have faced a harsh financial reality in recent years, with declines in revenue from 10 to 20 percent over the past four years.

“We looked at various options and we just did not receive a viable bidder for the course, or any of the property in this market,” he said.

According to the Island County Assessor’s Office, the golf course and nearby parcels owned by Holmes Harbor Community Partners have an assessed value of more than $2.6 million.

Schuster said the company is working on an interim plan for the property.

“We haven’t solidified that as yet,” he said, but added that the company will continue to search for an entity to operate the course.

Schuster said the company has considered the impact that the closure of the golf course may have on nearby home values and sales, but the economy prevents keeping the course open.

“We’ve probably held on longer, frankly, then it makes sense to for that very reason,” he said.

“We’ve absolutely looked at the impact, and that’s why we have held on as long as we have. We have spent millions of dollars investing in our golf course and our land and this community,” Schuster said.

He said the company had hoped that a sale of the surrounding parcels of land near the golf course and continued home sales would provide capital to keep the course open. That didn’t happen.

“We’re really just victims of this unprecedented economic recession,” Schuster said.

He added that the company had hoped the economic climate would improve if the operation could just make it through 2009.

But Schuster added: “2010 looks like it’s going to be a repeat of 2009 and maybe worse from a business standpoint.”

“There’s absolutely no credit enhancement in the market, banks are not lending money and the bailout stimulus program isn’t working,” he said.

The golf course is critical to the Holmes Harbor Sewer District, which has an agreement with the property owners to disperse processed water on the grounds.

Stan Walker, chairman of the sewer district board, said it was too soon to gauge what the closure means.

There would be no immediate impact to the district’s operations, Walker said.

The district has a legal agreement to use the course for irrigation purposes, “without fail,” Walker noted.

“It’s not going to be purchased and more homes put on it. That’s a physical and legal impossibility,” he added.

Walker said he did not anticipate the closure would have any immediate impact on sewer rates.

“We have time to figure this out,” Walker said. “Nobody should panic. We’re going to find some ways through this.”

One certain impact is the loss of the course for South Whidbey High School’s golf program.

“It will be devastating for us,” said Falcon boys coach Steve Jones. “The girls practice there and so does my younger C-team squad.”

Jones said that he and girls coach Tom Sage will have to spend the weekend rethinking the girls golf team schedule.

The Falcons were planning to host Archbishop Murphy on March 25 and Rainier Christian on March 29. The two matches were the only regular home events for the girls on the spring schedule.

There’s also a financial loss for the high school program.

“Each year, Holmes Harbor offers a two-for-one deal to the community,” Jones said. “All the proceeds go to our program.

Last year we made close to $1,000 to help with travel, course fees and scholarships.”

Jones said he feels bad for the people who work there, and for those who use it as their home course.

“It’s a real gem for the community and a tough loss all around,” Jones said. ”

Record writer Jeff VanDerford contributed to this report.