The Pellucid Perspective - June 2017 - 4

MUNICIPAL GOLF

allow those to play out and let developers take the assumptive risk and determine at what price it's a reasonable gamble.
* No consideration by the Township regarding how to
mitigate the lost property tax revenue.
From where I sit, in this particular situation and set of circumstances, I think the "common man (person)" got it right
and the due process worked as it should. The people who pay
the bills and whose hard-earned money created the Lake Villa
Township reserve fund in the first place decided they didn't
want to invest in a golf course turnaround situation. They further didn't want to likely pay higher taxes for the privilege of
making that speculative bet and they also were aware that the
future use of this property wasn't boxed into a corner of being
non-developable like many other golf course transactions today.
Their Board felt otherwise and the citizens simply withheld the
"power of the purse" and told them no.
I'm hopeful that this scenario plays out (not necessarily the
outcome but the process and involvement by the people who
pay the bills and have been working harder to keep as much of
what they earn as they can) in other similar situations across
the country. It seems that nearly every week I see in one of
the daily wires yet another municipality jumping in to "save"
a privately-owned golf course from seed or plow because "it

needs preserving" or to "prevent commercial or unwanted development" etc., etc., etc. In some cases, the municipalities are
even paying premiums to fair market values for these "virtue
and honor" bets with taxpayer money. I'm not saying all of these
transactions and decisions are bad but, at this point in time and
with the uncertainty of the local market conditions for golf in
many US markets, more of these municipal bets will end up in
the "L" vs. "W" column. If I'm right, then we're going to see,
5 years hence, the fallout from these ill-advised decisions (munis with even worse balance sheets or another transaction at a
loss) which banked on turnarounds that the private operators
were unable to achieve and that other private operators were
unwilling to invest in at the purchase price, terms and market
conditions. It's my belief that munis do have a place in the golf
market as operators of affordable and accessible golf. I don't
believe however that they should be in the turnaround business
and if they're going to "save" a property, they need to do it at a
purchase price where they're all but guaranteed to make a profit
(i.e. what if they offered $500K for the course, surely they could
make it run profitably at those financials?). That's just my educated opinion but whether I could have convinced 423 of those
folks in Lake Villa to vote "my way" (and if there would have
been an interested seller at that price point), well, that's another
matter entirely.
n

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4 The Pellucid PersPecTive

June 2017
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