Wednesday, January 14, 2015

Referendum Signees: "Here's What's Wrong With The El Conquistador Country Club Purchase"

In December, the Oro Valley Town Council voted 4-3 to authorize the purchase of the El Conquistador Country Club. The stated purpose was for Oro Valley to have a community center.

Many residents believe, however, that there is more to the story. They see the all to familiar pattern of a split council decision. They see a rush to make a commitment that will have far reaching financial impacts on the community well into the future. They see crony capitalism. They see too much baggage coming with the community center. They see shifty reasons for the purchase. They see pipe dream numbers.

What they do not see is a thoughtful, considered decision that was made to benefit the entire community today and for years to come.

That is why tomorrow, TOOTHINOV.ORG will turn in a voter referendum petition that will have far more than the almost 1,150 registered Oro Valley voter signatures to require a citizen vote on the purchase.

Mayor Hiremath said that he saw the opportunity for Oro Valley to quickly have a community center and that he seized it.  Besides, he says, buying the El Conquistador Country Club for $1 million is a great deal. It is so good that Oro Valley simply can not refuse it.

If this is the case, then what went wrong? Why have so many Oro Valley registered voters signed the referendum petition?  Here is what they have told us.

Mayor Hiremath Did  Not Build Council Consensus

A concerned resident
They don't like the fact that there was no council consensus.

The Council vote was unanimous when it approved the Oro Valley Aquatic Center.  The council vote was unanimous when it approved the $2.5 million spending overrun for the center.

This time, however, there is no consensus. This time Mayor Hiremath chose to cobble together the usual suspects, council members Hornat, Snider and Waters, to vote for the transaction. Once he had those votes, many assert, he didn't need the votes of the other council members.  So, they fear, he simply ignored them.

Council Members Burns, Garner and Zinkin have said that they were left out of the process. They claim that  they were never provided adequate information in advance. Nor, they say, were they given the proper amount of time to analyze materials and to make an informed decision.

According to them, the information on the purchase was pieced together at the last minute for their review and approval of the transaction.  They were not given the opportunity to do due diligence. If this be the case, then many ask why the other council members, especially Council Member Hornat, who prides himself in "doing his homework", believed they had sufficient time and sufficient information to make an informed decision.

"Fools rush in where angels fear to tread"
People have asked why there was such a hurry to approve the transaction. They have not accepted Mayor Hiremath's assertion that the deal would go away if it were not immediately approved. As individuals, as business people, they would never rush into a deal of this nature without thorough diligence.

Too Much Baggage
The transaction includes far more baggage than a 30 year old building, a building in need of substantial remediation, that will become the community center. The transaction includes 45 holes of golf that most in the community do not want; tennis courts that most people don't want; and 2 swimming pools that nobody wants. The fact that most do not want these things is supported by a town survey in June of last year. (At left)

Crony Capitalism
Referendum signees are suspicious of the transaction because it involves HSL Properties, a major contributor to the campaigns of Mayor Hiremath and Council Members Hornat, Snider and Waters.

Mayor Hiremath has asserted that he does not believe that there is any conflict of interest in this transaction.

Most of the petition signees do not agree. They believe that doing business with someone who was a major contributor campaign is crony capitalism. They assert that crony capitalism is exhibited by a "sweetheart contract" the town will inherit with the purchase.

As Oro Valley resident Diane Peters wrote Monday, the contract is between HSL and Troon, the company that is managing the golf course.  Oro Valley assumes this contract once it purchases the property. Via this contract, HSL's Conquistador gets priority use of the course, at favorable rates. HSL has virtual control of the Oro Valley public golf course to the benefit of HSL for up to the next 20 years! Oro Valley can't do anything but run the golf course unless HSL agrees in writing to such.

Many question why Mayor Hiremath did not recuse himself from the negotiating process if, indeed, it was such a good deal.

Shifty Justification
Referendum signees have said that they are suspicious because, though the stated purpose of purchasing The El Conquistador Country Club was to create a community center, the other reasons for the purchase as stated by Mayor Hiremath include:
  • It is a deal too good to be true
  • Oro Valley needs to buy the property to protect homeowners along the golf course
  • Oro Valley needs to control land in the  middle of Oro Valley
They are suspicious that these reasons do not tell the whole story.

What Are They Smoking?
Pipe Dream Numbers
Many referendum signers believe that the numbers presented regarding the financial feasibility of the golf course just don't "hold water."

They assert that the only way to even barely financially justify the town's operation of the course was for the town to use Troon's optimistic projected numbers.

They back their assertion by pointing out that these projections assume that the sport of golf will become more popular at this course. This would happened at a time when this course, other courses in Oro Valley, and the sport of golf nationally are in decline.

They not that, even with that, based on the town's numbers, the payoff from operating the golf course only comes many years into the future, years after the town has invested millions in the course. Any investment opportunity that presents a large up front cash outflow with the hope of a one day cash inflow is a very risky investment.
What went wrong? According to those who have signed the petition, a combination of things happened: No council consensus; a rushed decision; too much baggage; crony capitalism; shifty justification; and pipe dream numbers.  They call that the "perfect storm."

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