Mayor Winfield Proclaims Oro Valley "A Golf Community"...Enthusiastic About Reopening Pusch View Golf Course

Winfield: “We are a golf community.”

Mayor Winfield declared that Oro Valley is a golf community at last week’s council meeting (4h21m 2/17/21 Oro Valley Town Council Meeting) This, he says, is supported by last year’s statistically valid resident survey done as part of the now in-progress Parks and Recreation ten year master plan project. 

This survey was one of several reasons he gave for championing the reopening and three year commitment to operating the Pusch Ridge Course. Other reasons he gave are an uptick in golf usage because of the Pandemic; and his assertion that the town owned golf courses are meeting their subsidy metrics. According to Winfield, the only problem with Pusch View nine hole golf course is that it has been under-promoted.

Winfield "Kicks the Can" down the road

When Winfield and fellow council members Steve Solomon and Mo Greene have their way, the course will operate starting November 1. It will close each year in May.  Three years will be the  horizon for determining what will happen next to the course. By that time, the Mayor will have completed his term. It will be someone else's challenge.

Open space option summarily rejected

The idea of allowing the property to revert to its natural state or turning it into a walking preserve was summarily rejected by Winfield and council at the February 17 council meeting.  They decided that that solution was too expensive. They based that on numbers provided by town staff. No council member challenged these numbers or the basis for them. As LOVE has previously noted, the natural space option is least costly over a five year planning horizon.

Council never considered the Pusch View Course's history of failure

The council did not discuss the operating history of this course during the meeting, a history that includes:

• The Town purchased three financially failed golf courses in 2014 from HSL Properties. HSL's purchase of the El Conquistador resort was financially feasible only if the Town took over these courses. That is what the Town did. The Town council raised the sales tax a half cent to subsidize the losses. The subside continues to this day.
• Once it owned the Pusch View Course, the Town observed that the course was underused and worked to market it. There was no success. 
• In 2016, the Town then tried to turn the course into a family entertainment center, adding things like larger holes on the green and Frisbee Golf. That didn't work to stimulate use either. You can read about the Town's enthusiasm for that here.
• In 2020, Town Council voted to discontinue the course so that the Town could lease the course back to HSL.

Winfield, Solomon and Greene must believe that the pandemic driven resurgence in course use in Oro Valley is going to continue after the Pandemic passes. They may be right. On the other hand, the fundamental reasons the sport of golf is in decline has not changed. Read about those things here.

Tim Bohen was the only council member to speak against reopening the course

Council Member Tim Bohen stated that the Town has excess golf inventory even in today's hot market.  “I just wanted to let the people know at Pusch Ridge Course: I’ve walked their course a couple of times. I’ve talked them. I have sympathy for their plight." He continued: "I really do believe as a responsible entity, we have inventory that we already have that we don’t consume and that is why I can’t support this.”

Winfield did not want a council resolution.  Jacobs insisted they that there be one.

Mayor Winfield stated at several different points during the February 17 council discussion that Town Manager Jacobs had enough information from listening to the discussion to formulate what town staff was to do next. He did not want a formal vote (“resolution”). Town Manager Jacobs insisted that there be one: "You tell me what. I will give you the how." 

RFP to lease Pusch View Golf included in resolution

Two of the three other council members, Vice Mayor Barrett and Council Member Josh Nicolson, successfully fought to insure that the resolution include directing the Town Manager to formulate  a request for proposal ("RFP") for someone to lease the facility.  That RFP will be issued and analyzed over the next seven months if approved by council.

The Resolution to reopen Pusch View Golf Course

Council passed the following resolution by a 6-1 vote: 

Resolved: “Town council directs staff to return with a plan for operation of the Pusch Ridge Golf course to be evaluated within three years as to its continued feasibility, capital improvement requirements while also looking at alternatives to look at water usage and potential new configurations and a third party lease.” 

Town Manager Jacobs will present the plan at the March 17 Town Council Meeting.

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Oro Valley Town Manager's Inaction Caused Pusch Ridge Golf "Crisis"

Failure to act started last May

The Town of Oro Valley knew in April that HSL Conquistador was not going to take over operation of the Pusch Ridge 9-hole golf course. Yet, it continued to move forward with closing the facility despite knowing that it was never the intent of the the council to leave their neighbors who live on or near the course in jeopardy. 

The intent of the Town Council was never to close the course... It was to lease the course to the El Conquistador

On February 18, 2020 The Oro Valley Town Council unanimously approved a Memorandum of Understanding (“MOU”) with HSL El Conquistador and HSL Financial Management for the takeover of the Pusch Ridge Course. HSL was to lease the facility from the town, exercising a “discontinued golf” clause in the original 2015 purchase and sale agreement when the town purchased the Community Center, Golf, and Tennis. That Memorandum of Understanding stated that the town was going to discontinue operating the nine hole Pusch Ridge Course on October 1, 2020. The lease agreement was to come before council in the future.

Town Attorney Cohen assured the Town Council that HSL was going to take over operations. All that was left was the negotiation of a lease.

The MOU was negotiated by Town Attorney, Gary Cohen and Town Manager, Mary Jacobs.

 

According to Cohen “HSL is telling us, right now, that they are going to lease this course and that it will be effective October 1.” (Time stamp: 2:04:14 of 2-28-20 Oro Valley Town Council Meeting).

In late April, HSL told Town Manager Jacobs that they were not likely to lease the course

Town Manager Jacobs explained at the February 17 meeting that HSL indicated that they did not have the financial resources to do so.

Jacobs noted that “They were aware that operating the golf course would require a subsidy.”  In other words, HSL did a workup of the financial prospects and decided not to do lease the property, just as they had decided to get rid of it when they sold it to the town in 2015. 

It may even be possible that HSL has bigger plans in mind for that property (Please do use your imagination).

HSL has no pressing need for the course itself. The El Conquistador Resort no longer needs a golf course in order to be rated "five star." It now has a spa that qualifies them for this rating.

The town neglected the golf course, closed it, despite knowing that HSL was not going to take it over

The Town closed the course in April due to Covid. Then, the Town eliminated over-seeding and watering the course. The fairways were brown. Residents who live along the course were "up in arms." They launched an effort to get the grass green again and succeeded Wednesday night. As we reported last Thursday, the Town will consider a detailed plan to operate the course starting in November.

Town Manager Jacobs did not act early... created the crisis... dumped it on Council 

Town Manager Jacobs did not act to immediately include this property in the Parks and Recreation Needs Assessment that she commissioned. She should have done this in May when she knew HSL was not really interested in assuming operation of the golf course. But even if they were interested, the land should have been included in the Needs Assessment and Master Plan. Then, if HSL failed to lease the land, its use could be considered in the larger context of the town - not a one-off decision as is now the case.

It is likely that the council did not know of HSL's lack of interest until September 23. This is when they extended the agreement with HSL for 120 days.  The Town Council, like the rest of us, were "in the dark."

Jacobs' inaction disappointing. She is a strategic thinker.  Is it possible that she did not know that HSL was simply "playing the Town" because HSL is always "playing the Town?" 

All the signs were there. 

They even told her they weren't interested.

The town is where it is today on this because of her inaction. 

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Pusch Course Options Puts Oro Valley "Between A Rock and a Hard Place”

Town Manager: Two "most viable options"
The town has two "most viable options" regarding what to do about the Pusch View 9-hole golf course. This according to a memorandum to the Oro Valley Town Council from Town Manager Mary Jacobs. 

The options are: To permanently convert the 9-hole course back to natural open space for passive recreation use; or to operate etc Pusch Course during the peak season beginning next fall. 

Golf is the most costly option

Over the next five years, operating the course will cost the town about $2.6 million. Allowing it to revert to natural space for recreational use will cost a minimum of $1.6 million. There is a third option the memo does not mention. The difference in cost of $1million is significant.  (See panel)

LOVE identifies Option 3: Add this decision to the Parks and Recreation Master Plan Study

The town is engaged in a lengthy process of developing a ten year parks and recreation master plan. This property should be included in that study. 

There is no reason to rush a decision. HSL, the owner of the resort, can not force the town to do anything as dictated by the original contract. This is because contractual agreements usually have a "Force Majeure" clause. That clause suspends enforcement of a contractual agreement clause when there is an "act of god". The pandemic is such. Certainly, the town's purchase agreement with HSL for the property has such a clause.  

We suspect that the pandemic will not be officially declared over by the federal government until mid 2022, assuming that the actual infections rate is close to zero by year end.  Then, in 2022, the town can reengage HSL, the resort owner, in a discussion of them taking back the course if that is the course of action it chooses.

As for homeowners and the homeowner associations next to the course, they can wait.... Just like the rest of us. What happens regarding this property is important to all of us.

Drinking water is a huge issue if a golf course is maintained
The course uses drinking water for irrigation  The town will have to use substantial amounts of drinking water to maintain the course. The course will use up to 45 million gallons annually. That’s equivalent to 139 acres of water covered to a depth of one foot. That’s enough water for more than 500 homes for a year!

Town admits error

"Under-billed" water to course for twenty years

In addition, the town has been billing the water at a bargain rate. The course pays on the the rate for the first tier of the water rate. That’s intended for up to 7,000 gallons per month. After that, there are two other tiers with water costing more per gallon used.

According to the memo, the town just discovered this error in billing while doing the options analysis.

 “For the past 20 years, the course has continually been billed at the Tier 1 rate.’ Jacobs has no idea when it happened or how it happened. This means that the town was incorrectly billing water before the town owned the property.

The memo suggests that the town create a “turf” water rate at the tier 1 rate just to keep the cost down. If the correct rate were applied, the estimated added cost of water would be $70,000 per year. That is a yet another golf subsidy.

Creating a community natural space amenity not a “slam dunk”
To be clear, the Town of Oro Valley did not get a bargain when it purchased this course. Much of the asphalt paving is cracking, uneven or in need of replacement. The memo notes that it is estimated that 70% of the pathways need to be replaced. In addition, the memo states, and we do not agree, that there may be some short-term negative impact on neighboring property values. The memo also voices concern that there may be people from outside of Oro Valley who will want to walk the trail. This, they claim, could cause safety issues.

Council to discuss Wednesday
The council will discuss what to do with the course this Wednesday. We imagine that many residents in or near the course and their homeowner's association will attend the meeting in an effort to pressure council to make a decision that favors their interests. This approach worked last year for those who wanted the town to continue to maintain the two 18-hole courses. Both Mayor Winfield and Council Member Jones-Ivey are highly susceptible to this approach.

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Municipal Golf Is A Conundrum For Oro Valley

The plan is for financial sustainability by 2023

It's been almost a year since the Oro Valley Town Council voted to create a scenario where the town would pay a municipal golf subsidy not more than a $800,000 by 2023.  Council came to this agreement after 8 months of public hearings and sometimes endless discussion.  

Achieving the subsidy goal requires accomplishing major five steps (see panel).

Where do we stand today?

Two accomplishments

Two of the items have been accomplished. The food operations are the responsibility of the course's new operator, Antares, and the town reached agreement with the homeowner associations to fund the courses.

Covid-19 put Pusch View lease option "back"

The rest of the plan is open. As a result, as reported last week, golf operations are expected to lose about $1.4 million this year.

Shortly after the plan was approved the still ongoing Covid-19 pandemic happened. This had two impacts. One was an increase in golf revenue for the from March through June. Golf was, at that time, the only sport an adult was allowed to play. 

The second impact has a substantial impact on the ability to achieve financial sustainability of municipal golf.  HSL, the owner of the El Conquistador, has seen a substantial decrease in resort occupancy. As a result, they are not in a position to enter into a lease for the 9-hole course. Leasing the facility is a major source of savings that is now "off the table." 

As a result, it is still owned by the town. The town has maintained the greens on that course and has not over seeded the rest of the course. This has caused anger among residents whose homes are in this area. They want that course maintained. You should expect them to attend en-masse to the November 19 council meeting where council will consider Pusch View.

Ripple effect on Parks and Recreation

All of this has a "ripple" effect on the parks and recreation master plan that is being developed. That plan is focussed on the total needs of the community (yellow on map in panel); not on the specific needs of any one group. 

Municipal golf has a separate plan.

The master plan does not include anything regarding the possible actions that council may take regarding the Vistoso Golf course land. What happens to this property matters to thousands of residents in Ranch Vistoso.

Council faces daunting challenge 

Oro Valley does not have an infinite supply of funds to pay for everything that everyone wants. Some tough decisions are in the offing. The result is that the council has the daunting challenge of balancing the needs of the total community, as represented by the parks and recreation master plan, with the wants of three constituencies (panel above). 

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