Summary: Oro Valley Town Council Special Session – July 24, 2019 – Part 3. Arguments in support of closing the golf courses.

Losses are just shy of $9 million through May 2019
• I’ve read the 286 pages of letters submitted to the town by residents of the golf communities, primarily Canada Hills. Their unwavering opinion is that all 36 holes must be retained. In my observation, that’s not the opinion of thousands of other Oro Valley residents who find that unreasonable.

The Town’s original revenue projections indicated that the half-cent sales tax and the Community Center Fund would cover ALL expenses including capital improvements. Troon projected golf losses of $2M through FY 2017/18 with a slightly positive return starting in FY 2018/19. Instead, the losses are just shy of $9M through May 2019. Yet now we’re supposed to believe that golf will only require $1M in annual sales tax support if the Town retains 36 holes and if they spend almost $4M to replace the irrigation system and refurbish holes as part of the $6M bond package?

Two key points in the National Golf Foundation Study were quite clear:

(1) The financial condition of Oro Valley’s golf operation is considerably worse than most public sector golf operations in the U.S. where 67% of municipal golf course operations are able to cover their expenses.

(2) There are far fewer permanent households and resident golfers in the greater Tucson markets to support each 18 holes of golf in the area.

While I understand the concerns of those that paid premium prices for golf course views, there are many others in town who also paid higher premiums and lost their views due to the rampant development in town.

Golf is in decline, water is a precious resource, and real estate law does not guarantee property values
• I play golf but I cannot afford to live in a golf community. The Town of Oro Valley purchased the golf courses despite a large segment of the community voicing dissent. The face of our Town government has changed in large part due to that decision. The revenue and expense projections have proven to be faulty and continued support of the golf properties are a drain on the town budget with taxpayer money that would be better spent on services enjoyed by the entire community…Golf is in decline, water is a precious resource, and real estate law does not guarantee property values…There are many other golf options available. I use them. Those who want to play golf can use those options just like I do.

Troon's forecasts are not accurate and are not to be relied upon
• The purpose of a forecast is to as accurately as possible, project the future both in revenues and in costs so that when management makes a strategic decision, they have the best basis for doing so. In witnessing the Town’s forecast for the 36-hole option, I don't believe it does that. The town implies that the 36-hole option will cost only $11M in the future 10-year period. It understates the cost and misrepresents the losses that the town will incur.

In December 2014, the same forecasters, Troon and the town, said that we would lose $2M before turning golf profitable this year. Through May of this year, we have lost over $8.8M in golf and restaurant operations and are budgeted to lose more than $1.8M this year. That will be $10.5M in operating losses in 5 years.

The Town forecast conveniently picks a period of time 3 years in the future. This occurs after repairs costing us another $4M are completed and provides a best case hypothetical of what the 36 holes could look like if everything went right. And that hypothetical said that we will still lose $1M a year…I find that very unlikely.

The forecast conveniently ignores over $5M in losses for the next 3 years - the $1.8M this year and the several millions that we will lose while we’re restructuring the courses. The town says that since the irrigation repairs will be so disruptive, the losses can’t be estimated. Troon’s wage and benefit inflation increased $100,000 over the past year. A first look by the Budget & Finance Commission showed that the 36-hole option might cost $30M over the same period.

The Town’s projection indicates that the 36-hole option is probably the best, and in my opinion, it’s the worst. For the council to decide on what makes the best decision, the financial basis of that must be based on accurate forecasts, and the town and Troon have shown in the past that their forecasts are not accurate and are not to be relied on.

I know that decision-making can be difficult, especially for complex and controversial issues like this. For 6 years before I retired, I was the Director of Planning for the largest park and recreation district in (it sounded like he said Oregon)… It was generally recognized that almost all facilities and programs required some level of subsidy. So it’s not surprising to me that golf courses would have to be subsidized for the long-term.

The question is, how much subsidy should they receive from the town relative to other recreational facilities and programs that the town provides? It seems to me that subsidies should be highest for facilities and activities that are used by the greatest number of town residents such as parks, ball fields, and multi-use paths.

A Flash-Vote survey by the town earlier this year showed that multi-use paths were the recreational facilities most used by the town residents. Although I’m not a golfer, I’m not against subsidies for a golf operation, I just don’t think that golf should be subsidized to the detriment of other parks and recreation facilities and programs.

Of the options under consideration, I think retaining an 18-hole public golf course with conversion of the other 18 holes to well-manicured park space and pathways would be your best choice unless other parties, such as the HOAs, are also willing to participate in subsidizing a 36-hole operation.

Listen to Anna Clark’s speech below. A partial transcript appears below the video.

One percent of the population is utilizing 75% of the Parks and Rec Budget
• Golf alone consumes about 75% of the Parks and Recreation budget. What about the rest of us who don’t golf? I have 4 sons who play field sports. Oro Valley desperately needs more soccer and baseball fields to accommodate the many other families with children who play sports….At Naranja Park, because of the lack of field space for kids, soccer players of all ages are forced to practice on the same field at the same time. This is a recipe for disaster…What about the kids who want to play basketball? The Town only has one basketball court.

All of us are paying an extra half-cent tax on everything we buy in Oro Valley, but what is our money getting us? Why are we subsidizing an under-used Town golf course for less than 1% of Oro Valley residents? We need to reduce the number of golf holes to match the demand for golf and make it pay its own way. Imagine what Parks and Rec could offer our residents if it was no longer shackled with millions of dollars in golf losses.

Part 4 will be published on Monday and will include closing comments from Mayor Winfield and Vice-Mayor Barrett.

Summary: Oro Valley Town Council Special Session – July 24, 2019 – Part 1.

TOPIC: Discussion and Possible Action regarding Town of Oro Valley Golf Operations

This meeting is part of a “Golf Options” series, including a Town Council Study Session in January 2019, a Listening Session in February 2019, and approximately 6 Executive Sessions. (The Executive Sessions focused on contractual obligations between Troon, HSL, and the Town of Oro Valley.)

The meeting was organized as follows:

Staff presentation – Public Input – 15 minute break
Additional 30 minutes of public input – Town Council Discussion

Mayor Winfield set the ground rules for the meeting. He asked the audience to please be respectful, acknowledging that the meeting was taking place in a house of worship (Church of the Nazarene). He requested that there be no applause or jeering during or after any resident’s speech. He reiterated that he wanted the meeting to be a civil and safe setting for everyone.

According to a local news report, there were over 700 people in attendance.

Town Manager Mary Jacobs gave her summary analysis of golf operations
She referred to the Summary Document which is on the Town’s website – Summary of Town Manager’s Analysis of Golf Operations.

“The Town acquired the former El Conquistador Golf and Tennis Club in December 2014 for $1M dollars….At the time of the purchase, the initial projections predicted that following an investment of $2.8M in capital improvements, the golf courses, restaurant and tennis operations combined would break even after 5 years…In addition, there would need to be about $9.2M in various capital expenditures over 10 years of which an estimated $6.4M would be for the golf courses.”

Town Attorney, Gary Cohen discussed three key contractual obligations
(1) Golf course restrictions. The agreement between HSL and Oro Valley limits the possible uses to golf courses, open space, or recreational amenities in a manner compatible with the operation of the resort as a first-class property.

(2) HSL’s rights upon discontinuation of one or more of the courses. HSL shall have the right to lease such facilities from the Town for a 50-year term. He believes the lease tern is $10,000 per year.

(3) Golf course operator provision. The requisite qualification for the operator of the golf courses is as follows: a professional national or regional management company with prior experience managing both municipal and resort golf courses.

Slide presentation by Mary Jacobs

2017 National Golf Foundation Options (NGF recommended Option B: 27 holes)

Town Criteria

Key Overall Assumptions

Capital Investment Assumptions

Natural Open Space Examples – “The Art of the Possible” 

Public Park Space Examples 

36-hole option – Pros and Cons 

27-hole option – Pros and Cons 

18-hole option – Pros and Cons 

No golf/Open space/Recreation – Pros and Cons 

Part 2 will be published on Wednesday and will include the public comments.

Guest View: Mike Zinkin ~ Lack of due diligence is responsible for “the mess” at the Town-owned golf courses

Today, Mike Zinkin is responding to Bob Sterritt’s Guest View that was published on Monday.
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I am very happy to hear from a LOVE reader regardless of the viewpoint. However, I feel that Mr. Sterritt might be a little confused about the intent of my Watchdog Reports.

I have never been opposed to the Community Center portion of the purchase and I have never spoken ill of it except for the fact that it is still not ADA compliant. I stated that from the dais (when a council member) as well as in written communications. I do feel that we would have been better off building a new, state of the art, ADA compliant community center as opposed to purchasing a 1980’s building in need of updating and retro-fitting.

In my March Watchdog Report, I stated that “one might be impressed and think we are working ourselves out of this mess.” Mr. Sterritt asked, “What mess?”

The mess began in December 2014 when the minority council members (Bill Garner, Brendan Burns, and myself) asked to see the purchase agreement before it was signed, but the majority Hiremath group did not think that was needed. Mr. Sterritt, I would bet that you would put more energy and effort into buying a car. I’ll bet that you would study the market and determine what the car was worth based on comparable cars.

Prior to the purchase, in December 2014, I asked to see statistics on how many rounds of golf were played on the El Con courses during the most current year, and the response was “that’s proprietary information.” Imagine asking a car salesman what the estimated miles per gallon was on the vehicle you were considering purchasing and his response was, “that’s a secret.”

My point is that the Town purchased this property without any due diligence. The Hiremath gang also purchased it even though the majority of residents who expressed their opinions via emails to the council and during the public meetings were against this purchase.

The sport of golf is dying. This is echoed in the National Golf Foundation study that the Town contracted. The 170-page study concluded that:

“This facility is aging and has seen declines in activity and is now operating at a deficit, up to $2.1 million+. The loss on operations is a result of several influences…a recent recession, increasing competition, declining physical condition, and declining interest in golf.”

Mr. Sterritt, I am going to assume that you and I are in the same generation. Our generation is the last generation to support golf.

You mentioned the appraised value, but there is a difference between appraised value and market value. As an example, Stone Canyon Golf and Dove Mountain Golf both sold for well under $1 million.

We opened the golf courses in May 2015. The Troon losses as of March 30, 2019 are $8,867,541. Promised capital improvements of $2,878,000 have not been accomplished. Troon desired to have 315 members by December 2016. As of April 30, 2019, the golf membership was only 236. It is not my Watchdog Reports that are causing this; it is the state of golf in the new millennia.

Since November 2019, the Town’s courses have had 22,008 rounds of outside play on 45 holes. A public golf course within 5 miles of the Town’s courses had 27,021 rounds on 18 holes. This is not being negative; this is merely stating the facts.

Again, let’s be clear. I have never been negative about the community center, tennis, fitness, and recreation. My focus has been on the financial drain that golf is doing to our Town.

Below are links to two articles that conflict with the notion that closure of the golf courses will decrease property values:

Repurposing golf courses
9 surprising things that add value to your house

The Town has owned the courses for 49 months. The losing trend for golf has not subsided.  As such, we should work to minimize the drain that golf is currently placing on our town.
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Editor’s Note: You can read more of what’s in the National Golf Foundation Study at the below links. Part 1 discusses the options that were provided by the golf consultants to cut the losses. Part 2 contains a summary of their conclusions regarding the problems with the El Con courses.

Part 1

Part 2

Guest View: Kim Krostue ~ Preserving 18 holes on the La Canada course is the best option

After the adjournment of last Wednesday’s standing room only Town Council meeting, the Council held a “listening session” with residents regarding the Community Center Golf Courses. Oro Valley resident, Kim Krostue, gave the following speech.

My name is Kim Krostue. I have owned a home on the tenth fairway of the Views golf course for 8 years.

I have reviewed the financials of the Town’s 45 holes of golf. Clearly the status quo is not financially sustainable. A change needs to be made.

First, the 9 holes need to be sent back to HSL.

Second, I have studied the National Golf Foundation’s 2018 report. There were 3 options discussed. The 18-hole option (Option C) is the correct one. However, the 18-hole configuration as outlined in the report seems artificial with a new 18-hole course carved out of the La Canada and El Conquistador courses, preserving holes on each course.

I would suggest changing this and just keeping the La Canada course as is. I would repurpose the El Conquistador course preserving the views of all current El Conquistador homeowners. By selecting the La Canada course, I believe the 4.2M conceptual reconfiguration cost outlined in the NGF report (Option C) could be reduced perhaps dramatically thereby leaving money for community center improvements. Plus the move to 18 holes could be done almost immediately with all required irrigation work being completed this summer.

I believe moving from 45 holes of golf to 18 is the best option to preserve the property values of all homeowners living on every golf course in Oro Valley and will also allow the La Canada course to operate in the black.

Mr. Krostue also submitted the following comments on Take Back OV (Facebook Page):
If you weren't there, take the time to watch. The attitude in the room demonstrated why Hiremath and crew were crushed in the election. The golf club members led the charge for a continued free lunch. No other way to say it. I do not remember anyone in the “keep 36 holes group” arguing that golf should operate financially in the black. The NGF study captured this group’s attitude in the 2017 study and nothing has changed.

I learned something significant at the meeting. The deed restrictions in the HSL contract apply to the La Canada course and the 9 holes, not to the El Conquistador course. It appears that the town manager (staff) did not understand what the deed restrictions actually were until after last month’s study session. Think about that for a second.
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Editor’s Note: Mr. Krostue’s comment, “The NGF study captured this group’s attitude in the 2017 study and nothing has changed” was in reference to a comment by the National Golf Foundation after a 2017 meeting with El Con golf members and residents living along the golf courses.

“The feedback from these groups showed very little tolerance for change and lack of concern for the troubled facility economics." ~ Summary statement, Page 4, National Golf Foundation Study

Guest View: Dick Leonard ~ A fresh perspective on fixing the Oro Valley Golf Dilemma

The Town of Oro Valley is trying to minimize the financial losses of the Golf Operation and is now weighing the suggestions posed in the Golf Consultant's Report which includes resizing the golf courses.

Each option suggested in the National Golf Foundation Study involves a huge upfront cost and sizable construction efforts. This construction will involve earth moving equipment, the associated noise, and the potential of Valley Fever cases due to the amount of dust and dirt to be moved. This should be a concern of the nearby residents.

Along with the high-cost solutions suggested by the Golf Consultants, perhaps it is time to consider other options which would not require such huge costs and could be done with little or no construction.

In the spirit of maintaining a successful Municipal Golf Program in Oro Valley, let’s consider the following two additional options.

Option 1.
The first option, and by far the least costly and most easily done, is to simply lease one of the two 18-hole courses to the Country Club Membership. Every golfer knows the benefit of a country club is the access to unlimited play and the priority tee time schedules available. They also understand this comes with the obligation for the members to pay for the club's operation, similar to Stone Canyon, The Gallery, and Oro Valley Country Clubs. This would be a win-win situation for all parties involved.

The Membership would have the exclusive course, with full control over dues, schedules, course conditions, and cart policy. In addition, residents with golf course views would see no changes, as all 36 holes would remain intact.

The Town benefits from savings in maintenance and promotion costs for a complete 18-hole course, while the revenue from the lease would greatly reduce the burden of present Town-wide tax subsidies. With a few hours of legal tweaks, a standard Lease Agreement could be quickly written......Everybody wins!

Option 2.
Return to the original 18-hole course design. This could involve a small upfront cost, but little or no construction, or fears of Valley Fever. This option has the distinct advantage that 9 holes of play could be available to all young and old golfers, as recommended by the National USGA.

This plan would place all unused golf property under the control of the Parks Department, which would easily meet the needs of repurposing and creating beautiful and functional green spaces to satisfy the nearby affected residents. The main benefit of this option is that it matches the actual golf usage to only the necessary golf course size.

Again, the savings in course maintenance, outside management, and personnel costs, would dramatically cut the public obligation for tax subsidies, leaving substantial monies to update and improve the Community Center and build the sports fields requested by our many younger families.

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

Mr. Leonard is a property owner in Oro Valley. As a 20-year member of the El Con Country Club, he is well-versed on golf operations. Additionally, he spends his summers in Minnesota where he is a staff member of the Braemar Golf complex in Edina, MN. Braemar is one of the busiest s self-sustaining municipal courses in the state. Based on future golf predictions, Braemar is currently closed while they double the size of the driving range and downsize the courses from 27 to 18 holes.

The Great Golf Boondoggle of Oro Valley

The video that follows was produced by Take Back OV. It discusses the history of how the Town came to own the golf courses, the financial drain they have caused, and some potential changes being considered by the Town to stem these losses.

Sometime this month, the town manager is planning to give her recommendation to the Town Council. That recommendation will be based on the town's $50,000 golf study plus feedback from the town manager’s "invitation only" meetings with approximately 250 golf members and residents who live along the golf courses.

That’s right. There are 43,000 Oro Valley taxpayers being forced to subsidize these golf courses for 250 people; yet, these 43,000 people have NO VOICE at the table. Begin watching at the 7:10 mark to learn how YOU have been kept out of the process.

The video includes maps and photographs, but for those who prefer reading to watching videos, here are some highlights:

In December 2014, when Mayor Hiremath and Councilmembers Hornat, Waters, and Snider voted to purchase 3 golf courses from Humberto Lopez, their largest campaign contributor, the courses were already losing $1.5 million per year.

The facility immediately became a financial drag on Oro Valley. Losses have exceeded $2.5 million for each of the last two years with losses of $2.3 million budgeted for FY 2017/2018.

By June 2017, the Town had already lost $5.7 million in golf and restaurant operations. That’s $200,000 per month. When this budget year ends in June 2018, the total losses are projected to be $8 million dollars.

These excessive losses are FOUR TIMES the original Town forecast, meaning that the increased sales tax isn’t covering the operational expenses much less the required repairs.

Recommendations from the $50,000 National Golf Foundation Study.

Option A: Retain 36 holes on La Canada and reconfigure them. Cost: $5.2 million with continued annual losses of $1.4 million. (This does not address the overcapacity problem.)

Option B: Reduce from 36 to 27 holes (three 9-hole courses). Cost: $4.6 million with $1 million in losses annually. (This does not address the overcapacity problem.)

Option C: Reduce from 36 to 18 holes. Cost: $4.2 million with $1.3 million in annual losses. This reduces the overcapacity to a level supported by members, resort guests, and open daily play.

This option dramatically reduces irrigation requirements, operating costs, and frees up 83 acres of land. The study projects greater losses on the assumption that more members would drop out with only 18 holes available. This assumption is questionable since many members live adjacent to the courses and own their own golf carts.

Option D: Close both La Canada courses and convert it to a park/trail system. Cost: $3 million plus ongoing park maintenance. This is the only option that addresses the generational decline in golfers. It is also the only option that truly benefits the 43,000 residents of Oro Valley.

Pusch Ridge Course: Reconfigure to a 12-hole, Par 3 course. Cost: $3 million. This option was well-received by Humberto Lopez because it benefits the Hilton Resort while the Town bears all the costs.

The current irrigation system is leaking and outdated. Troon, the golf management company, reported that each 18 hole course uses 300,0000 gallons of water per day.

Invitation Only Meetings
Special “invitation only” meetings for golfers and residents living along the golf courses were held by the Town on May 4th, December 12th, and December 13th to get their feedback on how the Town should proceed…..to spend YOUR tax dollars in order to protect THEIR property values and THEIR desire to play golf. In other words, the Town wants YOUR money but you have NO seat at the table!

Table for 43,000
LOVE suggests that our readers demand a seat at the table. Attend the January 17th town council meeting and be prepared to speak. Or send an email to the mayor and council with your thoughts on what YOU think should be done with the golf courses. What do you think would be in the best interest of the majority of Oro Valley citizens and taxpayers?

Mayor and Council email addresses:

shiremath@orovalleyaz.gov
lwaters@orovalleyaz.gov
jhornat@orovalleyaz.gov
msnider@orovalleyaz.gov
brodman@orovalleyaz.gov
rpina@orovalleyaz.gov
ssolomon@orovalleyaz.gov

The Watchdog Report: September 2017 Community Center Financials

Continued losses
In September, the Community Center Fund (CCF) finished $86,016 in the red. (At this time last year, the CCF had a positive balance of $161,744.)

For the first quarter of this fiscal year (July 1 through September 30th) the fund has lost $307,862. This takes into account the fact that the sales tax revenues for the first quarter were $507,985, which is $22,557 more than last year during the same time period.

Troon (golf, food, beverage, tennis, non-aquatic center swimming) is performing about the same as this time last year. In the first three months of this fiscal year, Troon has lost $754,307, while last year at the same time the losses were $760,069.

Member dues are down by nearly $8000 dollars
So far this fiscal year, member dues are $178,621, while member dues last year at this time were $186,537. Why do we still cater to the members when their support of the investment is dwindling? Meanwhile, Troon continues to feather its own nest as the payroll and employee benefits through September 2017 were $39,863 higher than the same period in 2016.

Food and Beverage losses
Food and beverage, primarily the Overlook Restaurant, lost another $8,333 in September 2017. This brings the total losses so far this fiscal year to $34,034.

The National Golf Foundation Study spoke loud and clear
The losses are continuing and there appears to be no end in sight. The contracted National Golf Foundation study (for which the Town paid $50,000) states:

“This facility is aging and has seen declines in activity and is now operating at a deficit, up to $2.1 million+. The loss on operations is a result of several influences…a recent recession, increasing competition, declining physical condition, and declining interest in golf.”

“The current financial condition [of El Con Golf] 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.”

"El Conquistador G&T is well-located in Oro Valley, but has limited appeal for customers beyond the local Oro Valley area. With an offering of multiple golf courses, ECGT can provide service to a wide range of golf customers, but the club is having difficulty filling up all 45 holes of golf.”

Oro Valley Voters spoke loud and clear
One might think that after the landslide defeat of Prop 454 (The Naranja Park Bond), that the Council would start to take a closer look at their irresponsible spending. The Citizens told them loud and clear... "We are tired of all the taxes, we are tired of not being your first priority, we are tired of our Town Council only looking out for the developers and builders who fund their campaigns.”

Financial Update through September 2017 hidden in Consent Agenda
The Fiscal Year 2017/18 Financial Update through September 2017 is on the Consent Agenda for the November 16th Town Council Special Session. In fact, the entire agenda for this session is made up of a Consent Agenda. As in past council meetings, don't expect the financials to be removed for discussion and don't expect this meeting to last more than 45 minutes.

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.

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.