ORO VALLEY- We have a N4T Investigators update to a story we brought to you in November, regarding the controversial purchase of the El Conquistador Country Club. Town council is still divided on this issue, but new financial numbers beg the question; what is Plan B?
It's a picture perfect day on the golf course as several golfers are on the driving range and putting green.
"Hopefully and realistically that's going to pick up there's no question about it, how much remains to be seen," said Councilman Joe Hornat,
The N4T Investigators obtained documents showing Oro Valley originally budgeted to lose more than $1.5 million the first fiscal year. But now, the new forecast says it will lose almost $2 million. For every single month since Oro Valley took over golf, not once has the town reached or exceeded its forecasted revenue. In fact, a financial report through half of the fiscal year shows the town lost more than $781,000. Keep in mind, that does not include May and June 2015 where the town lost more than $600,000.
"We got off to a bit of a slow start," said Hornat.
Already, Oro Valley cut hours, closed the courses on Mondays and cut staff to save more than $469,000.
"Anybody with a basic business understanding knows once you start cutting services it's the death spiral," said Councilman Brendan Burns.
But Hornat remains optimistic and says even despite these changes he's not ready to give up on golf.
"I've got to see the entire year," he added.
We asked Hornat, "if it doesn't meet those projections what is Plan B?"
"I don't think anybody wants to talk about what Plan B is yet," said Hornat.
"Golf in general has been going down," said Councilman William Garner.
In fact, a National Golf Foundation report said there are now more golf courses closing in the country than opening. At the start of 2014, there were 14,465 18 hole golf courses, but by the end of the year, 128 of them closed. In 2013, more than 157 closed and one of them is Ahwatukee Lakes Golf Club in Phoenix. Those kinds of statistics have Gardner worried.
"That's a huge investment to make and do we really want to make that investment knowing the loses we currently have," said Garner.
"It was a real estate transaction and I think people introduce golf into it for their own pointed objective to be honest with ya," said Mayor Satish Hiremath, Oro Valley.
Hiremath says the purchase is a package deal and said it's premature to think the town will go bankrupt because of golf.
"We have a separate fund dedicated specifically to the entire community center project," said Mayor Hiremath.
Hiremath referred to the half of a cent sales tax increase passed last year, where it's expected to generate $2 million.
"That $2 million going to a golf course is that there is no capital improvements that's keeping it as it is today," said Zinkin.
Zinkin feels the town needs to think about leasing the golf courses to get out from under the debt, but still maintain ownership.
"What does that do? That stops the drainage," said Zinkin.
Mayor Hiremath and others on council did tell the N4T Investigators it's possible the town could close more of the courses if revenue is still falling short of projections. What exactly they'll do if that happens is unclear.
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