Residents of McHenry County, we give you example “A” of why local governments shouldn’t own property: RedTail Golf Club in Lakewood.
The village announced last month, via its community newsletter, that it plans to put the club up for sale after two decades of operating it on the backs of local taxpayers.
At its Oct. 22 meeting, the village board will consider listing the golf course for $1.9 million. That’s a hard pill to swallow when you consider the village paid $3.5 million for the course – plus an additional $3 million-plus in interest – over the course of the 20-year bond used to pay for the property.
If approved and a buyer is found, it will be a bitter end to what has been a fiasco from Day One. The purchase of the club was funded through alternate revenue bonds. Also called double-barreled bonds, it relies on an identified revenue stream to pay them off. If revenue falls short of projections, taxpayers make up the difference through property taxes.
When purchased, then-Lakewood officials thought revenue from the course would cover the bond payments. It didn’t, and taxpayers paid $3.6 million over two decades for the miscalculation by past leaders.
Lakewood Village President Erin Smith said the $1.9 million listing price isn’t ideal, but reflects the downward trend in the golf industry and takes into account the $1 million investment a prospective buyer would need to improve the course.
Today’s Lakewood leaders cannot be held responsible for the mistakes of their predecessors, and perhaps they are even learning from their errors. Smith noted the average revenue per round at the course fell from $44.20 in fiscal 2003-04 to $34.71 in 2012-13, and making future capital improvements would require the village to borrow money, which would require asking taxpayers for more money. Officials don’t want to do that.
We hope all local government leaders take note of what can happen when they gamble with taxpayer money and make being responsible stewards of that funding their highest priority.