The Pellucid Perspective - November 2010 - (Page 10)

MUNI COURSES Some cities willing to buck declining golf trend Recreational amenity, open space appeals outweigh risky business proposition for some By Jim Dunlap he level of flirting appears to be accelerating between struggling golf course owners and prospective buyers in the private sector, although the consummation rate is still lagging far behind the conversation level. A surprising number of recent golf course purchases by municipalities, however, indicates that some cities and other public entities still find golf courses to be an attractive asset, although unlike private owners, their motivation may be more grounded in quality of life issues than profit. Research done by this publication’s parent company, Pellucid Corp., indicates that in today’s golf economy, it is not unusual for municipalities to be subsidizing their golf course operations by an average of $10 per round. There are, however, a number of Have your mowing crews pull up ropes, stakes and signs T for the last time. 1.800.CLUBCAR, ext. 4782 cities and towns who feel that it is worth rolling the economic dice to acquire a recreational amenity and open space for their constituents, and in some cases, to prevent that acreage from becoming an unwanted form of development. Some recent transactions include the town of Davie, Fla., submitting the high bid in October to purchase the closed Arrowhead Golf Course in Davie from the state’s Department of Transportation for $4.5 million. (See accompanying sidebar article for more on that controversial decision). In Missouri City, Texas, the city paid $7.375 million to take over the Quail Valley Country Club facility which had previously housed two 18-hole courses and a par-3 course owned by Ohio-based Renaissance Golf. On the lower end of the price spectrum, Deer Park, Wash., purchased at auction the Deer Park Golf Club in August for $850,000, plus another $250,000 for existing course equipment and facilities. The city planned to lease it out to a private manager. And the town of Greenfield, N.Y., got off even cheaper. Greenfield received the Brookhaven Golf Club from a group of former IP Mills employees who had owned and operated the course for years as a gift to the town. Residents pronounced the free golf course acquisition “a dream come true.” While the majority of municipal golf course purchases appear to be motivated primarily by a desire to provide recreational amenities and open space for citizens, Missouri City’s acquisition of Quail Valley was also part of a financial strategy. Several years ago, concerned that Renaissance Golf, which had already closed one of the two 18-hole courses, was letting the property deteriorate, the city claimed the property under eminent domain. Renaissance had been contesting the eminent domain seizure, but settled on the $7.375 million offer from the city shortly before the case was scheduled to go to trial last May. The settlement resolved a substantial difference of appraisal opinions — the golf course property had been appraised at $3.1 million on tax rolls in 2008, and more recently by the city for $6.59 million. Renaissance’s appraisal was slightly higher - $14 million! As for Missouri City, the purchase reversed an exodus of homeowners in the Quail Valley neighborhood, and property values have actually increased by nine percent in the last two years, according to Quail Valley General Manager Tyson Spittleburg, making progress toward a city goal of increasing the town’s property tax base. The golf course purchase was funded November 2010 10 The Pellucid PersPecTive

Table of Contents for the Digital Edition of The Pellucid Perspective - November 2010

The Pellucid Perspective - November 2010
Examining the Third Party Tee Time Marketing Issue
A Primer on Third Party Tee Time Marketers
Some Cities Willing to Buck Declining Golf Trend
Feel Golf Head Defies New Wedge Rules
Washington DC/Northern VA Profile
Oct YtD Weather Impact Sep YtD Utilization
Mixed Financial Results for Q3 and September YtD
Heard it Through the Grapevine

The Pellucid Perspective - November 2010