The 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.