LAKEWOOD – The village of Lakewood will look to put the deteriorating RedTail Golf Club up for sale after two decades of operating the course with the help of taxpayer support.
Village President Erin Smith informed residents in the most recent community newsletter that the board would consider entering an agreement at its Oct. 22 meeting with a brokerage firm to list the golf course for $1.9 million – far less than the village paid for the course when it invested $3.5 million plus interest in a 20-year bond for the property.
The final bond payment was made in 2011, ending the 20-year loan. It was estimated at the time that removing the bond payment saved a homeowner of a $300,000 house about $240.
Smith said that while the $1.9 million listing price is not ideal, it reflects the downward trend in the golf industry and takes into account the $1 million investment a prospective buyer would need to make to replace the trailers with a permanent clubhouse, repair the parking lot, and improve bunkers, sprinkler systems and other areas of the course.
She noted the average revenue per round fell from $44.20 in fiscal 2003-04 to $34.71 in 2012-13.
“In order to make significant capital improvements in the near future, the village of Lakewood would have to borrow the funds,” Smith wrote to residents. “Given the financial performance of the golf course during the past several years, the board of trustees is unwilling to obligate the residents for these payments.”
Even with the golf course making a small operational profit most years, it was not enough to cover the cost of maintaining the course or the bond payments plus interest without taxpayer support, Village Manager Catherine Peterson said.
Taxpayers were on the hook for any shortfall in the loan payments from golf course revenue under the alternative revenue bond. Legislation drafted by local legislators – who pointed to RedTail as a undue burden on taxpayers – will give residents more power to prevent alternative revenue bonds from being pursued in the future.
Peterson said the proposed sale would include a 5 percent cut for Links Capital Advisors – the firm charged with finding a buyer. She also said any money generated from the sale could be used for any purpose that would need to be decided by the Village Board.
“That will be the second big decision if and when it’s sold,” she said.
Property owners along the golf course can be assured that it will remain a golf course or other open space, because any residential or commercial development is prohibited.