The Pellucid Perspective - February 2011 - (Page 14)

MUNICIPAL RENOVATION Pap-agony for Phoenix muni By Jim Dunlap he much-ballyhooed renovation of one of the country’s more noted municipal golf facilities has turned into a virtual tutorial illustrating the pessimist’s mantra that anything that can go wrong … will go wrong. The fate of Phoenix’s Papago Golf Course, which reopened after an approximately $10 million renovation in December 2008, is now in the hands of a federal bankruptcy court judge after the Arizona Golf Foundation, the organization chosen to oversee the renovation and operation at Papago, filed for Chapter 11 bankruptcy reorganization in October 2010. The entities awaiting the judge’s ruling on the Arizona Golf Foundation’s plan for reorganization most anxiously are Compass Bank, which purchased approximately $9.5 million worth of the $12.5 million in bonds issued to the Foundation by the Phoenix Industrial Development Authority, and the city. Failing some new Foundation strategy that would convince the bankruptcy court of their ability to pay back the bank and the city, Compass would like to see the reorganization plan rejected so Compass and the city could find a new operator with whom Compass could hopefully strike a new financing agreement. The city, which finally filed a default notice against the Arizona Golf Foundation after payments of the city’s annual $200,000 lease fees had been in arrears for some time, would also like to see a new operator take over who could pay the rent and hopefully build the promised clubhouse to replace the current trailer facility. The current course operator is actually a group called The Golf Guys, led by former Pumpkin Ridge developer Marvin French and his team, who are handling the day-to-day operations of the course for the Foundation, but are not involved in the bankruptcy proceedings. Rob Harman, deputy director of the Special Operations Division for the Phoenix Parks & Recreation Department, who oversees Phoenix’s seven municipal courses, said that all the Papago course vendors have been paid and the course “is in great shape,” despite the legal and financial upheaval. “The city’s commitment is that it will remain open,” Harman said, a commitment that has been backed by several hundred thousand municipal dollars in the past two years to water and seed the course when the Foundation was unable to afford to do it. Arizona Golf Foundation bankruptcy filing a sad chapter in rebirth of formerly proud municipal course T An unfortunate choice While there is no arguing the fact that the economic woes of the past three years would have created financial challenges for any operator of Papago, there is considerable consternation among Papago patrons and other concerned parties over the city’s decision in 2007 to award the course management contract to the non-profit Arizona Golf Foundation’s newly created affiliate, Arizona Golf Association Management, LLC. AGA Management got the nod over two other bidders, Lyon Golf and Papago Golf LLC, which was a partnership between Jim Bellows and Landscapes Unlimited’s Landscape Golf Group management arm. The contract called for the winning bidder to fund, oversee and manage the major renovation of the aging Papago course, develop a new clubhouse, perform a certain amount of re-vegetation on and around the course, and pay the city of Phoenix annual rent payments of $200,000. During the bid award process, there was some concern expressed by parties including an ad hoc group of Papago regulars called Save Our Papago that the Arizona Golf Foundation was ill-equipped to oversee such a massive renovation project and the course’s subsequent operation. The Foundation had only one previous course oversight experience, an executive course called Villa Monterrey in Scottsdale that was subsequently foreclosed upon after the Foundation donated it to the Arizona Junior Golf Foundation and later plowed at considerable expense by the city of Scottsdale to create open space. Many also questioned the Foundation’s initial projections of $4.4 million in annual revenues on 50,000 rounds following the renovation, and even subsequent reductions of those projections to $3.4 million. History has obviously borne out those fears. According to published commentary by city council members and others involved in the decision, the tipping points were the Foundation’s ability to secure a $12.5 million bond issue from the Phoenix Industrial Development Authority, combined with some political pull generated by the AGA’s long history of involvement with Arizona golf and associations such as the Arizona Junior Golf Association. It also may not have hurt that Ed Gowan, the executive director of the AGA, was privy to many of the city’s discussions leading up to the contract award and had longstanding relationships with many municipal representatives. While both the unsuccessful bidders are likely quite happy that they didn’t get the nod, both expressed surprise that the Arizona Golf Foundation did. Mike Conner, a general partner in Lyon Golf, told The Arizona Republic in January that the AGA award was hard to understand in view of both the AGA’s lack of course management experience and the fact that Lyon Golf was going to fund the course renovation with their own private money from the Lyon Family Trust, rather than a bond issue like the one the AGA secured. As Conner told the paper, February 2011 14 The Pellucid PersPecTive

Table of Contents for the Digital Edition of The Pellucid Perspective - February 2011

The Pellucid Perspective - February 2011
Contents
Is Groupon Good for Golf: The Sequel
Solving the Professional Payment Predicament
Jan 2011 YtD Weather Impact, Dec 2010 YtD Utilization
Reynolds Plantation Courses on the Market
Atlanta, GA Core Business Statistical Area (CBSA)
Alternative Golf? Or an Affirmation of How Many of Us Play Already?
Custom Clubfitting in 2011: A Solution but Not a Cure
Pap-Agony for Phoenix Muni
Show Time - Again

The Pellucid Perspective - February 2011