Oro Valley's Destination Marketing... A Year In... Still a Work In Progress

Still getting started
It has been a year since the town took over responsibility for destination marketing, replacing the services provided by Visit Tucson. By canceling that contract with Visit Tucson, the town saved almost half a million dollars annually. What has been accomplished to date? Well, not much, in terms of their mission: though there are a number of things that have been done.

For one, the town hired a destination marketing manager, Crystal Franke. Last week, Franke and economic development director Paul Melcher discussed with the town council what they have been doing. Their report was requested by Town Council member Mary Murphy at the February strategic planning study session.

The unstated mission: Generate sales and bed tax revenues
There is no formal mission statement for the town’s destination marketing effort.  The fact that there is no formal statement is a problem that needs to be addressed. Here's our cut what we think it is: “Drive economic activity through tourism-related events and marketing efforts to increase the town’s sales and bed tax revenue."

To date effort is far short of accomplishment
When asked directly by Mayor Winfield about what they've accomplished, Melcher didn't have much to say except that, based on post-event surveys, he estimated that the Tucson Bicycle Classic generated about $183,000 in economic activity for the town. Multiply that by Oro Valley’s 2.5% sales tax, and that event generated a little over $4,500. Melcher did not report how many hotel room nights, if any, were directly attributable to this event.

...And long on things done
Instead of reporting concrete results, Melcher focused on things they had done. They launched the Explore OV app, created an Instagram account, sponsored a cycling event, organized public art tours, began a leisure travel study, continued monthly meetings with resorts, and planned a June familiarization tour for event planners. The town plans to hold this tour in June, despite Oro Valley’s high summer temperatures. (June is a poor time to invite event planners to Oro Valley — the extreme heat alone is enough to discourage visitors.)

Council questions spending...
Vice Mayor Melanie Barrett raised concern over the large website budget, thinking it excessive. Melcher responded that while the website cost is a one-time expense, there will be ongoing annual maintenance costs of up to $25,000, and the town is still deciding whether to handle this work internally or through outside contractors. Barrett noted: “To me, that seems like a lot of money to spend on a website… hopefully, if there’s that much in the budget for a website, it will be an incredible website.”

...Membership of a "stakeholder advisory group"

Barrett and Murphy asked why there were no residents included in the stakeholder group with whom Melcher has been working. He said that this group is considered an internal working group and not open to the public. It includes the two major resorts, some arts and cultural organizations, state and federal parks affiliates, and local venues. 

The two major resorts — the Hilton Tucson El Conquistador and Westward Look — were referenced indirectly during the presentation as part of the stakeholder group, but there was no specific discussion of their role, performance, or involvement beyond general mentions of resort support. These resorts are working on their own with Visit Tucson for their destination marketing.

Still more activities on the horizon
Looking ahead, steps include completing the leisure travel study within the next six to eight months, which will guide future marketing and venue improvement decisions. Development of a dedicated Explore Oro Valley tourism website will follow, timed to launch with the study’s completion. As mentioned, in June, the the town will host familiarization tours for event planners to showcase local venues and resorts. Additionally, the town will work with Discover Marana on regional tourism initiatives such as developing a joint five-year tourism strategy, and promoting outdoor events such as the Tucson Bicycle Classic, which began in Marana and finished in Oro Valley.  The goal is to position the region as a cycling destination and training hub, attracting professional teams and visitors looking for safe roads, good weather, and scenic routes.

Maybe someday these efforts might pay… maybe…
It clear that the town’s destination marketing effort is still in its early stages. While they have taken steps to set up tools like an app, a social media presence, and public art tours, concrete results — such as measurable increases in room bookings or significant economic impact tied directly to their efforts — have not yet happened. Much of what they have presented so far is groundwork, with key initiatives like the leisure travel study, website development, and formation of a tourism advisory board still in progress. Their plans appear to be long-term, with major outcomes likely years away rather than near-term. For now, the effort remains a work in progress.

- - -

Guest View: Mike Zinkin ~My thoughts on the results of the $50,000 National Golf Foundation Study

Below are direct quotes from the National Golf Foundation (NGF) Study contracted by the Town of Oro Valley to assess the Community Center Golf and Restaurant Operations

(1) "The overriding trends in the golf industry will present challenges to the Town of Oro Valley in continuing golf course operations. The total number of “core” golfers is declining and total spending on golf is declining along with them…NGF has also documented rapid inflation in expenses to operate golf facilities in this market, especially related to the cost of water for irrigation." (Page 24)

(2) "The City of Tucson’s public golf courses are down 25% in rounds and 19% in revenue since 2008, and other public golf courses report similar reductions…Hotel facilities are an important factor for feeding golfers to the ECGT [El Con Golf and Tennis] and ECGT will have to do more to accommodate hotel operators in the hopes of attracting a greater share of play." (Page 24)

(3) "As a whole, the ECGT and Pusch Ridge golf facilities combined to produce total top-line revenue of just over $2.9 million in 2016, the vast majority of which comes from golf fees, member dues and Food and Beverage sales. The on-site operating expenses at the facility totaled around $5.2 million…resulting in a roughly (-$2.3 million) loss on operations (excluding other necessary costs such as capital upgrades and new investment in infrastructure). (Page 25)

(4) “The Current financial condition is worse than most public sector golf operations in the U.S, where 67% of municipal golf course operations are able to cover on-site expenses, but not able to cover both on-site expenses and capital improvement costs (only about 33% can cover both)." (Page 25)

The Recommendations
The Study provides options to the Town outside of closing the total golf operation. I will focus on Option B and the Pusch Ridge conversion since the below quote indicates that this is what the study recommends.

“…the NGF sees a 27-hole facility at El Con Golf and a modified par-3 golf course (possibly 12 holes) at Pusch Ridge as a much better option for Oro Valley to provide a more sustainable golf facility for the longer term going forward.”

I expect that the Mayor and Council will go along with this since they never think for themselves and they will simply say, “We paid for this study so we should follow the recommendations.”

Option B
This involves a reconfiguration of the 36 holes at the Conquistador and Canada Courses. This would be reduced to 27 holes (three 9-hole courses). The cost of this modification is estimated to be $4,639,115 (Page 102)

All the holes south of Lambert would be removed causing a shock to the residents of "The Villages HOA" as they will now be totally responsible for the future of this acreage.

Pusch Ridge
The cost to convert the 9-hole Pusch Ridge course to a 12-hole, par-3 course, called the "Dirty Dozen,” is estimated to be $3,013,120. (Page 109)

The study mentions how the Pusch Ridge conversion would be an enhancement for the Hilton El Conquistador Resort. Do you think Humberto Lopez/HSL Properties is going to participate in the cost of this conversion? The study states that:

“HSL has indicated strong enthusiasm for the Dirty Dozen concept as a way to transform the existing course into something the resort can leverage as a must-play golf experience that will take less time, provide a truly unique one-of-a-kind golf experience in the region, and will fit a model where less resources and turf coverage are required to sustain the golf operation." (Page 64)

Double Trouble?
With these two options in place (Option B and Pusch Ridge) the Financial Analysis of Future Expected Performance reveals that even after spending $7,652,235 for improvements and upgrades, operating expenses are still expected to exceed revenues by approximately $1 million per year with no expectations of breaking even at Year-5 when the facility is still expected to lose $1,050,600. (From the 5-year projections chart on Page 81).

Although this loss will be offset by the $2,000,000+ in sales tax, keep in mind that there is NO discussion about the Community Center, other than the recommendation to contract the food and beverage operation. This is important to note because there will still be costs for continued capital improvements to the Community Center.

How about a Going-out-of-Business Sale?
The report states that closing the total golf operation will cost $80,000 to eliminate the Pusch Ridge course (Page 68), and about $3 million to close the remaining 36 holes (Page 67). In other words, by spending about $3.1 million, the Town can be out of the golf business. There would be a drastic reduction in employee costs, no need for cart leases, no more management fees, and utility expenses would be dramatically reduced.

The Town would still water, fertilize, and maintain the acreage in the summer, or they could just let the property return to its natural state. The $2+ million in sales tax revenue would more than cover this and the surplus dollars can go to improving the Community Center.

What do you think the odds are that this 7-member congregation will consider something reasonable, like cutting the Town’s losses (your losses) and moving on?

...............

Mike Zinkin has a Bachelor’s degree in history and government from the University of Arizona and a Master’s degree in Social and Philosophical Foundations of Education from California State University, Northridge. He was a commissioned ensign in the United States Navy Reserve in 1969. He worked as an Air Traffic Controller for 30 years. He and his wife moved to Oro Valley after retiring in 1998. Mike served on the Oro Valley Development Review Board from 2005-2009, the Board of Adjustment from 2011-2012, and the Town Council from 2012-2016. During his time on council, he was named as one of 23 Leadership Fellows for the National League of Cities University, he was a member of the National League of Cities Steering Committee for Community and Economic Development, and a member of the Arizona League of Cities Budget and Economic Development Committee.

Tonight's The Night: What People Don't Like About The ElCon Purchase (Part 2)

Tonight, the Oro Valley Town Council will consider increasing the sales tax by one half cent to finance the operation of a community center and recreation facility. The facility will be the site of the The El Conquistador Golf and Tennis Country Club.  The facility includes several golf courses, two swimming pools, and 31 tennis courts. Oro Valley will  purchase from HSL Properties for $1 million.  HSL is purchasing it from Met Life.

Monday, we presented the town's case for approving this transaction.    In this posting, we present the objections of those who do not favor this transaction:

• The one half cent sales tax increase lacks community input
• There is a rush to make a decision 
• Some allege insufficient due diligence on the part of an inexperienced Oro Valley management team. (Monday we posted regarding the steps undertaken by the town.  You can and should draw your own conclusions as to whether these steps were sufficient to use to advocate for the purchase...or not.)
• Some fear an appearance of influence based on the campaign relationship between the Mayor, the council majority and HSL Properties 
• Some question the judgment of purchasing and running golf courses at a time when the golf busineess is in a major decline and when other golf courses in our town are suffering financially.
• Others fear the substantial investment required and a financial feasibility pinned on the "hope" of making money five years from now, after investing millions 
• Some question wither the town should go into a business that compete with private enterprise
• Oro Valley's private golf clubs 
• Oro Valley's fitness clubs 
• Perhaps, some allege, the inspection of the facility has not revealed big problems like an allege "black mold" problem
• Others wonder why Oro Valley wants to provide two activities, golf and tennis, that have never even been on the radar of the town before the El Con opportunity.

Some of these concerns have been asked and answered. For example, the town responded to a lack of community input, the urgency of the transaction, and the need for a multi-use facility in its press release last week. In addition, LOVE was provide a list of due diligence activities, which we wrote about on Monday.

• The community will have the opportunity this evening to opine on this transaction.  This will give them the opportunity to opine on the sales tax increase that is proposed.  
• The  urgency of the transaction is based on the timing of the other parties involved in it. 
• The town is providing golf  and tennis  this facility because the community, in a recent survey, said they wanted a multi-use recreation center. 
• The town provided us with a detailed list of due diligence activities that they undertook.  We posted these Monday.

Mayor Hiremath's view of the transaction is that any "...implication that campaign contributions are a factor in my decision making is ludicrous."

Some of the concerns have not been addressed by the town or others:

• It is wise to purchase and operate a golf course? 
• Is it wise for Oro Valley ito compete with private enterprise? 
• Is this transaction and the substantial future costs worth the investment?
• Do people want the community center but  not the "amenities?"

It is expected that many citizens will speak at tonight's meeting. Feelings are running strong.

We have been told  that some are prepared to form a PAC to petition for voter approval of this item. if he council approves this item tonight.

Mayor Hiremath faces a cross roads: Will he jam this purchase down the throats of the many who oppose it, as a 4-3 council vote would do; or will he have the wisdom to should slow down this race, take a breath, and let Oro Valley residents digest it?  

LOVE plans to attend this meeting and post results.  Stay tuned!

---

Heather's Corner: A Family Considers An Oro Valley Community Center

There is potential that a Community Center may be on the horizon for Oro Valley sooner rather than later. Regardless of where or when it happens, for my family it would mean a great deal. A Community Center, by definition, is for social, cultural, or recreational purposes, and let's face it, will provide more opportunity to escape the summer heat.

When I was younger, I would accompany my best friend and her family as they frequented our town's community center as members. After school it was a safe place to do to homework and wait for her father to arrive from work where the family would participate in racket ball, tennis, or swimming while catching up with a few neighborhood friends. On weekends we would have lunch at the on-site restaurant and participate in an art class or two. My point is to this day, those are some of the fondest memories I have. I'd like the opportunity to provide the same for my children.

A Community Center could be utilized:

As the place for all-community celebrations at various occasions and traditions.

As the place for public meetings of the citizens on various issues.

As the place where politicians or other official leaders come to meet the citizens and ask for their opinions, support or votes ("election campaigning" in democracies, other kinds of requests in non-democracies).

As a place where community members meet each other socially.

As a place housing local clubs and volunteer activities.

As a place that community members (and sometimes others), can rent cheaply when a private family function or party is too big for their own home. For instance the non-church parts of weddings, funerals etc.

As a place that passes on and retells local history.

There are many reasons to incorporate a Community Center in Oro Valley. I think all ages, interests, and socio-economic groups would benefit from a gathering place offering a variety of recreational, sports-oriented, and artistic amenities that we could all participate in. A place that encompasses the hobbies, interests, and pastimes of my entire family all while in the company of one another. Where else can you say that happens? Yes, reason to celebrate, indeed!

--

Heather Nenadovich has lived in Oro Valley a total of five years. She has a B.A. in Psychology from the University of Arizona. Her husband is Canadian so she is a hockey fan by default and so are her two very clever children. When not being a mommy, she enjoys hiking in Catalina State Park, hand building pottery, and gardening. Her favorite things about living in Oro Valley are the towns recognition of art and culture, their commitment to preserving nature and the Christmas parade. (Also anything from GMG Chinese Bistro.)

Guest View-Pat Straney: Tomorrow, A "Watershed Moment" For The Town Of Oro Valley

Wednesday, the Mayor and City Council of the Town of Oro Valley have an opportunity to demonstrate sound, business-based, fiscally responsible leadership that will benefit the community at large; or, concurrently, will cause potential harm, driving away possible new residents and businesses not desirous of further taxes.

Mr. Mayor and Council Members.  I ask you NOT to go forward with the acquisition of the Hilton El Conquistador Golf and Country Club facilities.

The business case for this decision appears deeply flawed based on the limited information provided and the Town of Oro Valley assumptions and projections that have little or no “data driven” support in the reality of today’s “real world” golf and country club demographics. In fact, this proposal flies in the face of what has and is happening with the golf business sector here in Oro Valley, Tucson and the country as a whole.

Justification for financial success of this project is based on an “as-of-yet” undocumented resurgence in the golf industry. In fact, it is just the opposite. It is no more than a hopeful “opinion.

The current stated plan is to finance this acquisition with Oro Valley contingency funds and a permanent 2.5% sales tax (which represents a 25 % increase from the current sales tax of 2.0%). The town estimates that it will be a number of years waiting for the golf operations to possibly break even or show a profit. These assumptions seem based on a “Build It or Improve It and They Will Come” philosophy. This includes the assumption that the greater community of Oro Valley does, indeed, desire a community center.

It is public knowledge that the golf courses at Rancho Vistoso, Stone Canyon, Oro Valley Country Club, Sun City, and several in Tucson – in addition to the Golf Club at The Ritz Carlton have been struggling to stay afloat let alone being profitable over the past number of years. Why would costly, over-the-top spending on 3 old golf courses in need of major repairs and improvements lead to revival of the industry and be considered a good thing for the town of Oro Valley?

Further, with regard to providing recreational facilities focused on physical fitness opportunities, several very nice fitness clubs already exist in Oro Valley, including Anytime Fitness, Planet Fitness, LA Fitness, Gold’s Gym and a specialized Pilates Studio. This is some of what is available to Oro Valley residents at very affordable prices. Council majority has stated a “business friendly” attitude which the displayed in their campaigning literature and comments. Would they now choose to adversely impact local business by adding to their competition challenges?

Effective municipal governance should not be based on this type of high risk speculation. It likely sets the stage for additional unending taxes and resultant negative impacts on all residents and businesses community-wide.

This action should not be taken without public input and broad support.

At the very least, if a community center is, indeed, an established citizen desire and Oro Valley priority, its use, location, capital and on-going costs must be fully defined - and the plan to fund it must be presented to the public - who pay the taxes – for their vote.

Potential funding considerations should include an analysis of all current Town of Oro Valley revenue streams for possible “re-direction” of existing funds to a community center project if it is determined to be of a higher priority than any current or proposed project or operational expense.

A mix of the above revenue analysis and traditional new sources of revenue such as bonds or additional “short-term” taxes specifically directed at this project could improve the business case for this project. Public support is imperative for the success of a project of this magnitude.

So, Mr. Mayor and Council Members, you have publicly stated that the choice is yours to make. We do wonder, however, is it a sound, data-based, fiscally responsible leadership decision, - or is it a self-serving, “bully pulpit-based decision” that will define your leadership style going forward?

The community taxpayers await your decision.

Patrick Straney
Oro Valley Resident

---
Patrick Straney is President of the Rancho Vistoso HOA. He is also former 2014 Oro Valley Mayoral Candidate.

Controversy Stirs Over Oro Valley El Con Purchase (Part 1)

Wednesday, the Oro Valley Town Council will consider increasing the sales tax by a half cent to finance the operation of a community center and recreation facility. The operation includes several golf courses, two swimming pools, and 31 tennis courts. The town will create this facility from The El Conquistador Golf and Tennis Resort, which it will purchase from HSL Properties for $1 million.  HSL is purchasing it from Met Life.

The Town Of Oro Valley is presenting the following "case" for purchasing this property and converting it to a community center and recreation facility:

• The community has identified a need for a community center in a 2013 survey.    The survey was statistically valid, according to the town.
• Respondents to a recent survey stated that constructing a multi-use community center with facilities for indoor recreation/fitness programs was at least somewhat important to them.
• The cost of purchasing The El Conquistador Golf and Tennis Resort of $1 million is far less than the cost of building a comparable facility, which is estimated to be $20 million
• The town will pay the purchase price in three equal payments over three years.
• The purchase price will be paid from the town's contingency fund.  There will be no need to issue debt.
• The ongoing cost of operating the facility will be paid by an increase of one half cent in the sales tax.  This will generate $2 million annually. The sales tax will be designated solely for the proposed Community and Recreation Center and related amenities.
• The operation of the property will breakeven in approximately 5 years.
• The opportunity to purchase this property has a short window. "The aggressive timeline set forth by these two parties has also placed the Town on an accelerated timeline."

         (Source: Town Of Oro Valley media release)

The town has done the following "due diligence" effort in evaluating this opportunity:

• "Town of Oro Valley Building Official Chuck King completed the initial inspections on the buildings.
• We then utilized the services of Swaim Associates Architecture for the building proper (analyzing Chuck’s inspection list). They provided a complete review as well as adding suggestions to turn these facilities from a private country club to a public community center.
• Aqua Design International analyzed the condition of the pools (Aqua Design was our designer who engineered all the pools and water features of our present Aquatic Center). They also supplied the estimate to remediate the pools to an acceptable operation condition as well as meet current code and health standards.
• Arizona Restaurant Supply (ARS) analyzed the kitchen components and provided an estimate to bring the kitchen facilities up to current code and health standards.
• Compusult Construction Cost Consulting gathered all the information and provided a detailed cost breakdown of all the elements discovered by Town Staff, Swaim, Aqua Design and ARS.
• Environmental Strategies Inc. analyzed and tested the facility for asbestos-laden materials, particularly in the fire retardant areas as well as insulation. We are still waiting for final testing results, but so far, information received has been clear.
• Inspections/analysis of the golf courses were completed by Troon representatives, with some participation from Town staff on certain elements of the analysis." (Source:  Misti Nowak, Oro Valley Communications Administration Director)

In addition, according to Nowak, the town estimates that a new facility built from the ground up would cost approximately $20 million:

• As a point of reference, the cost of the Northwest YMCA was $222 per square foot in 2002 for construction costs, which included the pool. (The NWYMCA is approx. 32,000 square feet.)
• If we assume a 2% escalation of construction costs over 5 years (discounting the 7 years of the recession), the present day cost would be $240 per square foot.
• This cost did not include the land acquisition and sports fields costs associated with the project. The NWYMCA land was donated by the Nanini family, and Pima County picked up the costs for the sports fields.
• Based on the NWYMCA construction costs, if the Town were to build something comparable to the Hilton Country Club, the breakdown of costs would be as follows:

Building, Shell, Pools:	40,000sf x $240/sf                                                 = $9,600,000
16 asphalt tennis courts:	$20,000/court x 16 courts                                         = $320,000
15 concrete tennis courts	$1,300,000 (surface) + $10,000/court x 15 courts = $1,450,000
Grounds and parking	30 Acres    (low estimate)                                          $5,000,000
Total	$16,370,000

• This total does not include any field development, so we would need to factor in approximately $800,000 per field, based on current Naranja Park costs.
• In addition, with the addition of the golf courses, the Town would be picking up the remainder of the land for about $12,500 per acre (based on $4,000,000 for 320 acres), to balance the total project cost at $20,000,000."

---
We posted Mayor Hiremath's view last week.  The Mayor believes that this transaction satisfies a stated community need and that it makes good business sense.

Council Member Joe Hornat seems to share that view.  Joe, as you know, has a way of simplifying the complex:

"This is an opportunity to get a Community Center...that is the primary goal. The amenities like the pool, tennis courts, property etc make this even more attractive and fill some gaps in our Parks program.

Yes the golf course is a risk, but a manageable risk with the right management company such as Troon, and some investment to bring this course (and the building) up to standards we would all expect. Marketing will be done by Troon and Visit Tucson and that will be a great boost. The potential for offering a "Troon" card to members allowing them to play other Troon courses at a discount should be a great draw also. 

Will it make money day one? No...no business will. It is an investment in the future of Oro Valley. I don't like taxes any more than any rational person, but there has to be a way to support this investment until it turns itself around and it will do that."

Hornat also observed that "...for profit companies are buying golf courses, Mickelson at Stone Canyon (they are building a new country club building besides)...the folks who bought OV Country Club and none of them did it to lose money."
---
Wednesday, we will present a list of concerns shared to us by our readers.
 ---

Bits and Pieces

Please Don't "Rain On Our Parade"

Tomorrow is the Oro Valley Holiday Parade. The forecast is for cooler weather with some showers. The parade starts at 9:30 at La Cholla and Naranja. The parade  proceeds east along Naranja to La Canada.
---
Oro Valley Country Club Sold

The Oro Valley Country Club, Oro Valley's original golf course, was sold to ClubCorp.  The sales was announced last week. ClubCorp is an NYSE traded public company (Ticker: MYCC).  There was no announcement of the details of the sale.  However, we do know that the club was sold by the holder of the notes issued to upgrade the facility.

This club has "extra value" because it has grand fathered water rights. Thus, its water use can not be restricted by the town.
--
Parks and Recreation Commission Recommends Against El Conquistador Golf Course Purchase

As reported by Becky Pallack of the Arizona Daily Star.

"The parks board voted 5-1 to advise the Town Council to go ahead with the purchase — without the golf business. 'We really wish we could get these wonderful facilities at a cheap cost and dump the golf courses,” board member Dana Hallin said.'"

Read the article here
 ---
Arizona Daily Independent: "Oro Valley Residents Denied Voice In Proposed El Conquistador Purchase"

The Arizona Daily Independent reports that Oro Valley Council Members Zinkin and Garner have series of concerns. The concerns regard the potential purchase by Town Of Oro Valley of the El Conquistador Golf and Tennis Resort.  According to the report, there is great concern as why there is such a rush to purchase this facility, what the facility will really cost Oro Valley, and whether or not the facility will really suit the needs of the community.
---
Naranja Park Planning Continues: An Event Center and More Possible

Consulting firm McGann and Associates presented the latest draft of a Naranja Park plan to the Oro Valley Parks and Recreation Commission this week. The concept is still in the planning phase. Here is some of what is being considered:

• The archery site would remain as located, with an updated rest room facility
• There is an "Event center " that is the hub of the park
• The plan would add 6 multi-purpose fields with lights
• An outdoor performance area is located north of these fields
• There is a family play area, with recreation equipment and ramadas
• 3 little league sized baseball fields of 200 plus fences and a full-size baseball field are on the north of the property
• There is also a group use area. 

This latest plan assumes that the town will purchase the El Conquistador Golf and Tennis Resort and 

use it as the Oro Valley's Community and Recreation Center. Town Council will consider this purchase and an increase of .5% sales tax at next Wednesday's regular counsel meeting.

---

Register Your Players For The "Oro Valley Little League"

The Coronado Little League has changed it's name. It is now called the Oro Valley Little League. There are 300 players in the league, ranging from 4 to 18 years old. 75% of the players are Oro Valley residents.

The league has 25 plus teams. It operates 9 months a year. At present, the league uses 2 fields in Oro Valley. The league pays $10,000 per year for field use.  Future new fields at Naranja Park will substantially improve their operation. 

According to league president, Ray Feltes: "Our next big step is Spring registration. Registration forms available at our web site: www.orovalleyll.com"

You can register players at Dick's Sporting Goods in the Oro Valley Marketplace on the following dates:

• January 11: 1pm-4pm
• January 14: 6pm-8pm
• January 24: 9am-12pm

---
La Cholla Widening To Start In 2015-16

At this week's general plan amendment hearing, Mayor Hiremath confirmed that widening of La Cholla, originally planned to start in 2021, will  start next year (Planning stage) with construction starting in 2016.  This project is funded by the Regional Transit Authority ("RTA").   

The project will widen La Cholla, from a bit north of Naranja, then south, to a 4-lane desert road with walking and bicycle paths.

Mayor Hiremath is Oro Valley's representative to the RTA. The Mayor is confident that the project will be completed in a timely manner. The Town Of Oro Valley will manage this project.
---
Oro Valley Launches Youth Recreation Scholarship Program

"Oro Valley, Arizona (December 8, 2014) – The Town of Oro Valley is pleased to announce a new scholarship fund to make fee-based recreation programs more accessible to Oro Valley youth who may be unable to participate in recreational programs and activities due to financial constraints. The funding is received through the Oro Valley Water Utility’s voluntary “Round-Up” program, which allows customers to round up their water bills to the next dollar. Water bill inserts with complete details are currently being mailed to all Oro Valley Water Utility customers, but any interested citizen may donate to the program. See below for details on how to donate or how to apply for a youth scholarship." (Source: Town Of Oro Valley Press Release)
---
Oro Valley Honors Volunteers Of The Year

Last night, The Town Of Oro Valley honored Lee Craig, Larry Forchione, Ellen Guyer, Warren Lazar,  John Lowe, Carolyn Milkey, and Mary Robare  as "Volunteers Of The Year." The event was hosted at the Hilton El Conquistador Golf Resort Presidio Ballroom. (Source: Town Of Oro Valley Press Release)
---
Spring Oro Valley Parks And Recreation Guide Available

Click here to view a copy of the Springs Oro Valley Parks and Recreation guide.
---

Guest View-Don Bristow: "Guest View: Is El Con Deal A Good Deal Or Not For Oro Valley?"

On December 17, the Oro Valley Town Council will consider the purchase of the El Conquistador Golf and Tennis Club. The plan is to use it as a Community and Recreation Center and to raise of the Oro Valley sales tax to pay for its operations.  

Resident Don Bristow, a former council candidate, agreed to share a message he sent to residents about this transaction.  Based on feedback you have given us, his concerns are shared with many in the community.
---
"In case you haven’t heard about the December 3rd Council meeting, and read that Oro Valley will raise sales taxes (without a sunset) to acquire El Conquistador’s country club, I have attached three items. Two are articles from the Arizona Daily Star, one appeared only online at Tucson.com. The other is an article about the decline of golfers and reasons for not getting into the golf course business. Course constructions, play and number of golfers continued to decline in 2013 as it has for many years, and it seems as though nothing can restart it. Even the proposed management company, Troon, agrees, when its vice president of sales says, “There’s no one thing that’s going to turn the industry or a club around.”

Pay back is hell! This deal is too good to pass up! These axioms are very appropriate for the Town Manger and Mayor Hiremath’s push for the Town to purchase the golf courses, tennis courts, and associated supporting facilities. The Town would purchase these through a collaborative arrangement with HSL Properties. This would allow HSL to buy the financiallydepressed Hilton El Conquistador Hotel which has been for sale for two years with no offers. Could HSL even buy the hotel if the golf courses are not sold?

You may know HSL as the owner of the new Encantada Steampump apartments near the Basis School; Hotel Arizona near the Tucson Convention Center; among other apartment and hotel holdings. You have probably read about Mr. Lopez and the Hotel Arizona which he let fall into shabbiness and disrepair; abandoned; and has refused to do anything to it unless Tucson gives him money.

You may also know HSL was biggest contributor to the reelection campaign of the four incumbents. The incumbents received close to $16,000 from HSL. Right before the election, the four incumbents began talking about the need for a community center. Mayor Hiremath claimed the discussions regarding sales of the Hilton have been going on for several months. Was he part of the discussions before the election? Is this purchase pay back for the money HSL invested in Oro Valley’s reelected officials?

Recently, the Stone Canyon Golf course sold for $20. The Ritz Carlton golf operations were sold for only $1. Is one million dollars a good price for Oro Valley to consider this? The Town’s PowerPoint presentation at the December 3rd meeting (view online) shows the Town will pay a yearly $1.2 to $1.5 million operating subsidy. That plus significant capital improvements of over $5 million, will leave the Town with a multimillion dollar deficit over the next five years.

On top of all this, the Mayor and his cohorts DO NOT WANT ANY PUBLIC INPUT. Is it fair for everyone who lives or shops in Oro Valley to pay increased sales taxes to support this purchase without input? Hopefully this is not a done deal.

Your opinions should be heard, and all your questions should be answered! Contact all of these people before the December 17th meeting when the decision will be finalized. Also, attend the meeting and let your voice be heard!

 gcaton@orovalleyaz.gov (town manager)      shiremath@orovalleyaz.com   (mayor)

  bburns@orovalleyaz.gov                                wgarner@orovalleyaz.gov

 jhornat@orovalleyaz.gov                                msnider@orovalleyaz.gov

 lwaters@orovalleyaz.gov                                mzinkin@orovalleyaz.gov

---

Mayor Hiremath Answers LOVE Reader Questions On Community and Recreation Center

Oro Valley's pending decision to acquire the Hilton EL Conquistador golf and tennis facility is a game changer for our community.  The plan is to use it as a community and recreation center.

Many of our readers have asked us questions regarding the acquisition of the property. Rather than guessing the answers, we posed the questions to Mayor Hiremath. He was kind enough to respond quickly.

Here are the questions and his response to each:

1. How did Oro Valley Come upon the opportunity to purchase this property? This idea was spurred during discussions with some potential purchasers of the hotel (that purchase opportunity ultimately fell through).
2. Why do you believe that this is the right thing for the community to do? This provides a very unique opportunity for the Town to acquire a turn-key operation that will serve as the Community and Recreation Center. Recent community survey results have indicated that the majority of our residents are interested in having a community center. Additionally, the Golf and Tennis fit into our strategy of youth and amateur events.
3. Why doesn’t the town purchase the property directly from Met Life? We explored that opportunity and they wanted a higher purchase price.

4. Do you believe that the general decline in interest in golf has bottomed out as Greg Caton does? Yes. A lot of golf courses are in transition and investors are seeing the growth potential in this industry. 
5. Do you believe that it is not necessary for council to get public input on this transaction? If so, why? We are currently receiving a lot of public input regarding this potential. Residents are welcome to submit their thoughts and ideas through Constituent Services, where it will be tracked, answered (if appropriate) and ultimately shared with Council.
6. Why does the town need to raise the sales tax to finance this? Why not bond it? A bond is a loan. We need additional revenue to pay for the capital improvements. Additionally, there are operational shortfalls, which require an additional revenue stream. You can’t pay for operational short-falls with a bond (or loan).
7. Why must the council make a decision on December 17? In other words, whey the rush? The new purchasers are looking to sell the property shortly after their acquisition, so that is driving the timing. We had completed extensive due diligence, and that information will be presented over the coming weeks. I believe we have all the information needed to make an informed decision.
8. Why should the town, subsidizes sports such as golf that most of us don’t play or plan to play? Communities offer a wide-range of recreational opportunities that fit the needs and desires of a diverse community. We all benefit from a diversity of offerings. For example, I personally may not utilize our parks; however, I still receive benefit from a community that offers park amenities. I believe you utilize our trail system and some residents don’t. So, the residents who golf, but don’t use the trail, might ask why should we build trails when they don’t use them. Again, it is our responsibility to offer a wide range of parks and recreational opportunities.
9. Why doesn’t the town sell the golf course to a third party? The facility operates as one unit, so that is the way we are approaching the acquisition and the operations. After a few years, the golf course will be a profitable asset. So, I believe long term this will be in the best interest of the community to maintain control and ownership.
10. If Hilton cannot market the hotel with its courses and tennis courts, why does the town think that Oro Valley can successfully promote golf and tennis? We are contracting with a company (Troon) which focuses on golf, tennis and fitness (although we will operate the fitness portion). They are experts in the business, and with the capital improvements we have planned, will move the facility to an improved position in the market.

HSL Management is purchasing the property from MetLife.   The town is purchasing the property from HSL Management.  HSL Management contributed funds to Mayor Hiremath's PAC.  We respectfully asked the Mayor if he felt there was a conflict of interest.  Though we did not expect him to respond, he did.

"I believe this project will be in the best interest of the community and I will base my decision with that perspective in mind. There were a variety, and numerous, contributors to my campaign over both election cycles, each that have a passion and interest in their respective areas. The implication that campaign contributions are a factor in my decision making is ludicrous"

Once again, thank you Mayor Hiremath for answering your questions.

Oro Valley has a web page that provides facts about the proposed community and recreation center.

If you have other questions, we encourage you to write to  Oro Valley constituent services.

Finally, we invested our time in visiting the facility. Here is a link to the pictures.
---
Our thanks to the Hilton Hotels and Resorts for our tour of the La Canada facility.
---

The Saga Of Dead Golf Courses (Part 2)

We have posted about the demise of golf as a sport a few weeks ago.   Last Monday, we posted part 1 of this two part posting.

We had heard that several Oro Valley Golf courses, in addition to the Hilton's, are experiencing financial difficulties.  Our analysis provided a detailed explanation of what was happening.

A reader sent us an article about the Ahwatukee Lakes Golf Course in Phoenix. It is yet another dead golf course.  The article is titled: "Closing a golf course brings tax penalties, angry homeowners". The article discusses in depth regarding the problem with the sport of golf and with golf courses in general.

The Ahwatukee Lakes Golf Course is closed.  When this course closed, the owner"...got slapped with a tax bill from Maricopa County for closing the course. ... owes $1.6 million in back taxes, according to the Maricopa County Assessor’s Office. That’s thanks to a 1985 statute that gives a golf course owner a tax break of $500 per acre each year as long as the golf course operates as a golf course. If the owner takes the tax break and closes the course, he or she must pay 10 years of the tax break plus interest and a penalty." Ouch!

The article continues, the owner "...let the course go fallow because the water bills were too high. Then he became embroiled in a years-long ongoing dispute with angry homeowners who’d paid premium lot prices to face the golf course. [The owner] wants to convert the dead golf course into homes, and the homeowners are threatening to sue him."

Homeowners are suing the owner.  A group called "Save The Lakes" has formed. They are property owners who live near the golf course. They are outraged that the course has been closed and left in disarray.    Save The Lakes is suing the former owners for monetary damage.

One claim is that the owner has violated the property's covenants, conditions and restrictions ("CCR").  The CCR, they allege, requires that the land be put back into its original condition.

A second claim is the essence of the law suit.  It alleges that the property owner has violated their responsibility to deal in good faith.

“Every contract, whether a contract for a purchase of a home or to loan somebody money, every contract has implied into it a covenant of good faith and fair dealing,” according to Tim Barnes, plaintiff attorney.   

“Good faith and fair dealing in a legal sense means the parties to the contract must not do anything that deprives the other party to the contract of the benefit of what they bargained for."

In other words, homeowners bargained for a golf course when they purchase property.  Suddenly, the property has been abandoned. Suddenly, the property owner wants to sell the property so that Pulte Homes can build on it.  This is not what the original property owners bargained for when they purchased their home.  (Source)

This disaster for the homeowners is one of the potential unintended consequences of changing the use of a golf course or closing a golf course, when that course was built as the centerpiece of a development.
---

The Saga Of Dead Golf Courses (Part 1)

This is Part 1 of a "Saga Of A Dead Golf Course"   It is also the saga of what could happen to homeowners when things happen to the golf course.  It also continues a previous discussion we've stared on the demise of this sport and its impact on Oro Valley.

First, we start with an "HBO Real Sports" video on the demise of the sport.  The video is hosted by Brian Gumbal. In it, Williams visits a dead Florida golf course. According to the video, the course visited is now "...home to anything and everything that is not golf." He continues: "On average, 130 american courses have closed every year for the last 8 years."

This video, however, shows some innovative concepts that are being tested to revitalize the sport!

Dead Wild Hog On Dead Florida Golf Course

Then, there's the report last week by Greg Hansen of the Arizona Daily Star: "Tucson City Golf, which is now operated on a daily basis by OB Sports, reported last week that play is down 10.1 percent in the first four months of the fiscal year. Those are frightening numbers, but also reflect the general drop in golf play nationally. The Greens Committee reported that the five city courses are $802,000 over budget in those four months. Only 15,899 rounds were played in that period, compared to 18,648 last year."

This is not yet a story about Oro Valley. It is a glimpse, however, into what could happen when a golf course in Oro Valley goes dark or if its use is changed to something entirely different.  Our courses are in trouble.  Take the course at the Hilton El Conquistador, for example. It is poorly maintained. According to one golfer visiting from Tucson: "The bunkers are a mess. There's slump block and other stuff. It's a sorry sight." The members of the Oro Valley Country Club are negotiating a bail out deal with their lender.  Trouble now. Trouble ahead.

Golf Everyone? We Hope So

We've been reading a late the sport of golf in general is declining in popularity.  We've also heard that, several Oro Valley golf courses are experiencing difficult financial times. One is up for sale. Another will likely be acquired by its main debt holder.

A decline in the popularity of this sport has combined with challenging economic times.

Could this have significant impact on Oro Valley?

Apparently, Golf Is Not For Everyone

Oro Valley has 6 golf courses. All of these courses are 18-hole courses. There are a total of 40,414 yards of fairway.    All of these courses have homes built around them.  Our guess is there's probably 1,200 such  homes.   There's probably five times that many that are dependent on the golf course.   There are probably 6,000 properties that are directly impacted by a golf course.

So, if something happens to a golf course, such that it can no longer operate as a golf course, it's not only a problem for the owner of the golf course but also a problem for those live around it.

Private member clubs are finding it hard to survive.  More are being sold to or managed by private companies. So, the sale of Oro Valley's Stone Canyon Club, a top 100 club, to golf star Phil Mickelson's company,  Mickelson/Loy group, is no surprise.

Without doubt, Tiger Woods brought a level of excitement to the sport of golf that engendered an entire new wave of players.  But, for the past five years, Woods as been a non player.

The result of all this is that "... country clubs are lowering prices for membership and for nonmember rounds of golf." (Source)

There are in fact those who predict golf will continue to decline in popularity.  "It won't go away, but it will likely tread water over the next couple of decades."

Add to this the concept that research shows that Millennial's (those born between 1980 and 2000) are simply not as interested in sport of golf as previous generations.  "The participation rates of people aged 18 to 34 fell roughly 13% in 2013 from 2009, while their rates for other active sports like running rose 29%, according to SFIA data."

"For the fifth year, overall participation in golf fell in 2014 as measured by the number of U.S. individuals who reported playing on a course at least once, according to Sports & Fitness Industry Association data." (Source)

The reasons given for the decline is that the sport of golf takes a long time to play and that it costs a lot of money.   It is generally not a family sport.  So, in a town that thinks its getting younger, as Council Member Mary Snider has asserted, the sport of golf does not seem to be an attraction for younger families.

Golf Courses Are Money Losers

The decline in popularity has resulted in a decline of profitability for golf courses.    "Average net profit margins for privately owned golf courses and country clubs have been negative for several years." (Source)  These courses have a net profit margin of  -10%.  For example, in 2013, one public course in Ohio (Grantwood) cost $1.1 million to run but it only takes an review of $1 million.

All public of courses require subsidy by the taxpayers. Municipal golf courses are facing the same difficulties as private golf courses.

"The cost to maintain a municipal golf course is rising, and as many cities and parks departments feel the strain of tighter budgets, everyday expenses represent enough of a burden, let alone the improvements needed to be competitive. "Municipalities are having to make decisions," says Jeff Bollig, senior director of marketing and communications at the Golf Course Superintendents Association of America, who estimates that 2011 saw a net loss of 107 golf courses in the United States. "Do we operate this course at a loss and understand that it is a service we provide, do we break even, or do we try to make money that returns to the general fund?" (Source)

Add to all of this the fact that there are golf courses galore in Pima County so Oro Valley's golf courses do have competition.

You might ask: Why should I care?  

You should care because if an Oro Valley golf course goes dark it will substantially change that neighborhood.  Those lush greens; the cooling effect, the beauty will be lost.   One can imagine the outrage the public would feel if this were ever to happen.

Imagine, too, operating a golf course at a time when the sport is in decline and when it is projected by experts to continue to be in decline for many years.    How does one make money in a declining business? How does one even keep that business going?

Today, Oro Valley is very dependent on the success of the golf industry.

What do you think?
---