Tuesday, July 10, 2018

A History on our “Turn-Key” Community Center and Golf Courses

December 2014
Town Council Majority-4 (Hiremath-Hornat-Snider-Waters) voted to purchase the El Conquistador Golf Club from their largest campaign contributor, Humberto Lopez (HSL Properties) for $1 million dollars.

They justified the purchase by saying that the residents wanted a multi-use recreation center and that the country club facilities would be a turn-key Community Center. However, they knew that extensive repairs were required for the golf irrigation systems and the 1980’s country club building.

Spring 2015: Half-cent sales tax increase
The Town Council approved a ½ cent sales tax increase to cover all costs associated with the Community Center. The Community Center opened in May 2015 and immediately became a financial drag on Oro Valley.

2017: Golf and restaurant losses are 3.5 times the original forecast
By June 2017, the Town had already lost $5.7 million in golf and restaurant operations (or $200,000 per month). When this budget year ends on June 30, 2018, the total losses are projected to be over $7M dollars.

These excessive losses are 3.5 times the original Town forecast. Therefore, the sales tax revenue doesn’t even cover the operational expenses, much less the required repairs.

In 2017, the Town Council commissioned a $50,000 golf study by the National Golf Foundation and the WLB Group. The purpose of the study was to evaluate the Town’s golf facilities, course management, competitive landscape, and recommend actions that the Town should take to reduce these unsustainable losses. The NGF presented their results to the Council in a July 2017 Special Meeting. It was not acted upon at that time because the Town was focused on the $17M bond and secondary property tax for Naranja Park.

2018: Council reviews Golf Study options
The Council took up the golf study options in early 2018. The options aren’t good. Every one costs several million dollars, including closing the courses.

The study recommended 4 options:

Option A. Keep the two 18-hole courses on LaCanada
Cost $5.2M plus $1.4M in annual losses

Option B. Reduce the 36 holes down to 27 holes and frees up 32 acres
Cost $4.6M plus $1M in annual losses

Option C. Reduce the 36 holes down to 18 holes and frees up 83 acres
Cost $4.2M plus $1.3M in annual losses

Option D. Close both 18-hole courses and convert to a greenbelt park and pathway
Cost $3M plus ongoing Town park maintenance

What did our leaders do?
After spending $50,000 on the National Golf Foundation Study, they ignored the recommendations and instead followed Town Manager Jacobs recommendation to stay with Troon’s plan of 36 holes even though that plan has already lost us $6.9M.

The Troon plan will cost $3.6M for the irrigation system replacement and turf reduction, but future costs will likely require substantial funding to rebuild greens, sand traps, and cart paths.

In addition, $2.4M was proposed to rearrange, repair, and upgrade the 1980’s community center structure. But millions more will be required if or when they rebuild the tennis courts and lighting, remove and replace racquetball courts, and complete the additional ADA-compliance concerns.

Mayor Hiremath and Council adopted a budget for FY 2018/19 approving a $14M bond to mask the $6M Community Center and golf investment by packaging it with the $6M water and utility improvements and the $2M police evidence facility overrun.

Costs to-date and Costs to come

Purchase price                                                   $1.0M
Losses May 2015-March 2018                          $6.9M
Capital invested to date                                     $2.7M
FY 18/19 and 19/20 Bond for                            $6.0M
      Golf Course/Community Center Repairs

TOTAL costs $16.6 Million

This information was derived from a video produced by Take Back OV. Visit their website HERE