Golf Course Renovations Have Not Been Properly Vetted

golfThe whole Cypress Head Golf course renovations process has not been handled in an independent objective manner.   Just as we  do not let the fox report on how many chickens he has taken, neither should we be relying on projections prepared by Kemper Sports the current operator who has zero financial interest  at stake in their recommendations.   NOR  should we be considering even for a moment  a situation where soft costs ( largely payable  to Kemper ) are in excess of 45% of the capital expenditures,  AND  to amortize those soft costs over 25 years demonstrates just how devoid of financial acumen  this proposal is  ……..  To say nothing of just how patently unfair it is to be raising water & sewer rates on our poorest of residents to subsidize  a failing  golf course,  through new loans and payment deferrals on existing loans,  that is frequented by fewer than 5 %  of city residents.
Council needs to place the proposed Cypress Head Golf course renovations on hold at this time for the following reasons.

  • *- The proposal was not prepared  in an independent objective  manner.
  • *-  The Food  & Beverage operation must be separated from the Golf operation,  UNLESS we are satisfied with the $ 76.94   profit per week  Kemper has made on F & B so far this year.
  • *-  The assumed $1.6 million projection has received no independent analysis  and there are no assurances  that costs can be contained to this amount.
  • *-  The renovation projections were prepared Kemper  —  the firm that manages the course for the City and which has zero financial interest at stake.
  • *- The proposal has not  received the vetting  it  deserves  to warrant spending  several millions of taxpayer money.
  • *-  Government should not be in completion with the private sector and this proposal made no effort to seek out a private sale of the course  as a going concern.
  • *-  The demographics for the golf industry  show it to be in a serious decline.
  • *-  The Cypress Head  Golf  Course has been unable to re-pay its original debt over the past 20 years as promised,   AND is currently unable to make any loan payments.
  • *-  The existing unpaid loan plus the new loan will be combined, AND are proposed to be  repaid  over a 25 year term which is longer  than the assumed life of the renovations themselves.
  • *- The profitability of the Golf Course is in free fall with a decline in comparative  Net Income of  $131, 562  in the 2 years ended  June 30th  2014
  • *-  If this trend continues there is no assurance the  City will ever  receive any future loan payments .
  • *-  This loan is not being made on a commercially prudent basis as soft costs should never come close to 45% of capital expenditures,  NOR  should they be amortized over the next 25  years.

Cypress Head is a beautiful course , but we have to be realistic and recognize that the  six golf courses located  within  a mile or two of each other in Port Orange, NSB and the Fly-In are going to come under tremendous financial pressure in the coming years as rounds played dwindles.  It is more that conceivable that one or more of these courses may not survive.  If we wish to best ensure that Cypress Head is not one of those courses,  and  does not become a taxpayer drain  we need to place it on the most competitive  footing we can.
That means  finding a private operator exuding the entrepreneurial  spirit that built this country,  AND  the personal confidence that they are going to make this the best darn Golf course in the area and make money on their investment in the process.
This one is a no brainer.  These renovations need to be deferred until the proper analysis’,  And a reasonable attempt at attracting a private operator have been undertaken.
Ted Noftall
 

3 thoughts on “Golf Course Renovations Have Not Been Properly Vetted

  • July 31, 2014 at 7:56 pm
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    The golf course is a scam bleeding taxpayers. The residents who benefit from the golf course most are those who live in the gated community where our public golf course conveniently resides. The course elevates their property values at our expense. They can even ride in their neighborhood in golf carts to our public golf course. I wonder if I left my home in Harbor Oaks headed to the public golf course in my golf cart how far I would get before being stopped or ticketed. Perhaps Cypress Head would like to purchase the course. My utility rates would be more realistic if the city just gave them the damn golf course. Why not put the utility revenue back in to our utilities where it belongs. I saw the extensive damage an aging water line caused on national news out in California last night. Should we really be funding a golf course with utility revenue. I wonder if the Public Service Commission would condone that. I doubt it.

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    • August 1, 2014 at 5:25 am
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      The whole idea is ridiculous. Port Orange if full of great restaurants. Why would council think that by spending taxpayers money on this failing venture anyone would go out of their way to eat there?
      It will never pay for itself and we desperately need this money for important work needed on the city’s infrastructure. Sell the damn golf course or turn it over to the Cypress Head community…we’ll all be long gone and the debt still will not be paid. Let’s be done with it and get it off the taxpayers backs.

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