Note: The $6MM Community Center Bond approval is included in the Adoption of the Tentative Budget that the Town Council will be voting on at tonight’s Council meeting.
We have often heard from Town Council that we need to give the Oro Valley Community Center golf investment time to show that its financial viability is trending positively. This was a fair request since the golf purchase was truly a major undertaking. However, three years have now elapsed and time has revealed what the 5-year plan may have been all along.
Another victory for Humberto Lopez (HSL Properties) and golfers
At the end of next the fiscal year, the Town’s obligation to rebate Vestar 45% of the sales taxes collected at Oro Valley Marketplace will end. This information was provided by Town Manager, Mary Jacobs during the Town Council Budget Study Session on May 9th. When Vestar’s tax incentive ends, approximately $800K per year in sales tax revenue from OV Marketplace will now become available to support Town services. This should be great news. I’m sure we can all think of many community-wide uses for this new revenue stream. Perhaps we could use it to actually provide more ball fields or playground equipment for young families since that’s what residents have been requesting.
But wait. Later at the same May 9th budget review, a significant portion of these same revenues ($450-480K per year) was proposed to be effectively passed to HSL and our “Country Club” and fitness members as security for a 20-year bond to improve the Community Center and Golf Courses. And once again, ball fields and playgrounds take a back seat to golf.
The percentage of Oro Valley residents who have $20-$40 monthly fitness memberships is only approximately 3% of our population. And the number of users who visit this facility per day (about 320) is far less than 1% of our town population, as was cheerfully volunteered by Parks and Rec themselves at the same meeting. Do these 9,500 total visits per month in a town of 45,000 include out-of-town visitors from the resort who are coming to enjoy our sales tax subsidized golf?
Lipstick on a Sign
In essence, all the Town did was to cross out the “Country Club” sign in lipstick and write “Community Center” on the sign in the same lipstick and…well, it’s still a Country Club. It’s great that we have a day camp and fitness center members that enjoy the Community Center and make this portion viable. But this benefit clearly goes to relatively few as reported by Parks and Rec themselves. And frankly, this benefit has been, and will long continue to be, dwarfed by the golf losses borne by all.
All that has really changed at El Conquistador since 2014 is the sign out front, a new traffic light, and more importantly, who is now responsible for the long-term upkeep of the combined Community Center and El Conquistador Resort (HSL) golf asset. It’s we taxpayers who will now shoulder an ever increasing load of $3-4 million dollars per year for the next twenty years minimum (0.5% town-wide dedicated Community Center sales tax + 60% of the previously committed OV Marketplace sales tax to Vestar).
Our Community Center purchase agreement provides HSL with a 50-year (at $10K per year) Canada golf course improvements option to keep this one course open. Mayor Hiremath has stated that the signer of the purchase agreement, former Town Manager, Greg Caton, always seemed to “hit it out of the park.” It looks like this ball might come down some time around 2040 as far as loan payments, or 2065 as far as our lease with HSL. It’s a tape measure home run for HSL and the golfers either way. As for the vast majority of Oro Valley sales tax payers who don’t use the facility, let’s just say we’ll keep getting hit by the pitch.
Privatized Gains and Socialized Losses
So, upon learning this, how do we as a Town, in good conscience, choose to sink $6M minimum more into a 35-year old building and golf courses over the next three years? Our local economy includes flat golf revenues, rising local construction costs over the short term of this project, and potentially catastrophic decreases in CAP water for southern Arizona over the long term. Losing CAP water may shut all but the most financially healthy Tucson courses.
El Conquistador Country Club memberships are already well below where they need to be. This is maybe the only point everyone in Oro Valley can agree on. So, how exactly will three years of phased construction improve the membership rates? They won’t. Watch your Council brag about the great fiscal position of the Town resulting from their “skillful planning” and fiscal restraint and try to reconcile that with this long term decision. You can’t.