The Pellucid Perspective - December 2011 - (Page 2)

REVENUE & EXPENSES Municipal owners beware! Landmark ruling due in Ohio Sales/use and property tax exemptions at risk for city of Cincinnati’s courses and private operator Billy Casper Golf By Jim Dunlap I t has been a long time, if ever, since the golf industry was for-profit use. In both Cincinnati cases, the fact that the city involved in a landmark legal ruling, but that time is coming has contracted Cincinnati Golf Management, an entity of forsoon in Ohio, and it will bear watching in America’s 49 other profit operator Billy Casper Golf, to operate its golf courses, has states as well. disqualified those course operations and facilities from sales/ A doubleheader of potentially monumental consequences for use and property tax exemptions. Barring a different conclusion municipalities who have privatized their golf course operations, at the state Supreme Court level, that would seem to be a difor are thinking about doing so, is currently being played out in ficult obstacle for Cincinnati and its city solicitor, John Curp, Ohio’s Supreme Court and tax commissions. If both cases are to overcome. resolved in favor of golf course owner Paul Macke, who filed the Curp defends the city’s decision to privatize its golf course tax complaints against the city of Cincinnati which triggered operations, citing improved performance and significant profitthem both, the results could significantly change the way mu- ability of the seven-course portfolio since outsourcing the course nicipalities and other publicly run courses evoperations to KemperSports initially, and to erywhere do business with private, for-profit Billy Casper Golf subsequently. Noting that The property tax operators, or indeed whether they elect to do Cincinnati, like other municipal golf owners, complaint is not business with them at all. is under pressure to operate more efficiently The two issues, one challenging the exonly more complex, and to remain self-sustaining through its emption of the city’s courses from sales and enterprise fund, Curp said of Macke’s combut potentially use taxes and another contesting their exempplaint, “If we have any fault, I guess it’s that tion from course property taxes, both resulted the city has been too successful at it. After all, considerably from tax complaints filed by Hillview Golf the city has been in the golf business for over more expensive Course owner Paul Macke, whose family op100 years. It’s as important to us as pools and erates five courses in the Cincinnati market. playgrounds, and under private operation, for the city. Ohio’s Board of Tax Appeals agreed with it’s become a profit center for the city. Using Macke in April 2010 that the seven City of modern golf course management practices, Cincinnati-owned courses should not be exthe quality of our courses, service and rounds empt from paying sales and use taxes, and the city has appealed have gone up. Unfortunately, other golf course operations in our that decision to the Ohio Supreme Court. That court’s ruling community haven’t been as successful, and we’ve become their could come down any day now. scapegoat.” The property tax complaint is not only more complex, but Macke, on the other hand, echoes the laments of other pripotentially considerably more expensive for the city. Macke ini- vate operators nationwide who find themselves competing with tially filed his complaint in 2007, and it has gradually worked its strong publicly owned golf operations. way up to the Ohio Tax Commission, with Macke on the win“I just got fed up with the city courses [under] cutting my ning side at every turn thus far. It may eventually end up in the prices,” Macke said. “We’ve traditionally been the lowest priced state’s Supreme Court as well, although the city has already be- course in the area, but when the management company came gun paying at least a property tax tender amount, which would in, they make all their money on food and beverage. The more likely mitigate any potential interest or penalties if they should people they run through the door, the more money they make, be found liable for the back property taxes subsequent to the so they keep discounting and discounting. I’m actually a little original complaint. That bill could amount to as much as $1.9 disappointed that nobody else in Ohio has filed a tax complaint million per year on the seven courses, dating back to 2009. because it’s really easy – just a two-page document online.” The rulings by state tax boards in both cases to date have While Curp is understandably unwilling to concede defeat been based on Ohio law which states that while public property on either tax issue, he said that the city would do whatever is is generally exempt from certain taxes such as property tax and necessary to maintain the property tax exemption. sales/use tax, it loses that exemption if it is being utilized for a “The property tax exemption will remain,” Curp said. “We december 2011 2 The Pellucid PersPecTive

Table of Contents for the Digital Edition of The Pellucid Perspective - December 2011

The Pellucid Perspective - December 2011
Municipal owners beware! Landmark ruling due in Ohio
Are no-shows the hidden assassin?
Dismissing weather impact: A cunningly clueless concept
Living in the past
If you promote it, they may come
November weather impact: Good month for the Sunbelt
Philadelphia, PA Core Business Statistical Area (CBSA)
Surprise, resort developer favors new resort!
We could use your help

The Pellucid Perspective - December 2011