Pullella advocates leasing golf course to Jaworski group (Dec 31)

Dec 31 – Outgoing Councilman at Large Tony Pullella read a statement regarding the Brigantine Golf Course at the City Council meeting Monday. This issue promises to be the first big issue for council – and the city – for 2015. Following is his statement.

“For the past two years we have discussed the possibility of leasing the Golf Course long-term to a third-party professional as a means of reducing taxpayer risk. The process has been open and transparent.

This was done through (a) RFP process with the help of a golf course consultant to attract golf course industry professionals in submitting proposals for a long-term lease agreement with the city.

“The initial RFP request generated a respectable response from nine companies for the prebid orientation. Only one official bid was submitted to the city – by the Jaworski Golf group. This single submission is indicative of the struggling golf industry and the weak local business climate. Over the past decade, the golf industry has lost five million golfers, and the market is expected to lose more golfers. (These statistics are taken from a N.Y. Times article from April 2014 by Bill Pennington.)

“I will be the first to say that the offer by the Jaworski group was not what we’d hoped for; however I believe (it) is a better deal for taxpayers in the long term compared to the current management arrangement.

“The 2002 decision by mayor and council to purchase the Golf Course from American Golf may have been well intended. Prior to purchasing the course, promises were made that have not been kept: that the golf course would be a self-sustaining utility and of no cost to the taxpayer, and that a payment in lieu of taxes would be made annually to support the municipal budget. While the city-owned golf course produced adequate revenues in the first five years of operations, it has been in decline since its peak in 2007. Since 2007 the golf course has lost nearly $1 million in fund balance. In 2014, the taxpayers have subsidized the golf course by $765,000 and will need approximately $250,000 in subsidies from the municipal budget in 2015. This represents a $2 million loss since 2007.

“Over the past year we have heard much praise of the golf course by both our mayor and Councilman Simpson: that the golf course revenue is up and the conditions are the best they’ve been. Let us analyze the revenue: the golf course has generated $1 million this year – a year with optimal weather and course conditions. While the revenue in 2014 is 11 percent above 2013 (the Sandy year), it is down 14 percent from 2012, 25 percent from 2011, and the revenue loss goes up exponentially compared to prior years.

“The stark reality is that the taxpayers will have to subsidize the golf course at least through 2018 when the final P&I (principal and interest) are made on the original bond. While the mayor and Councilman Simpson have stated on numerous occasions that we will then own the golf course free and clear, that is simply not true. The Golf Course Utility has additional debt of $765,000 that has not gone to permanent financing (bond). In the event City Council decides not to lease the golf course to the Jaworski group, the city will need to make additional capital improvements to keep the golf course competitive and generate additional revenue. The cost of improvements could be as low at $800,000 – or much more. These actions could place the taxpayers at financial risk over an additional 15 years with no guarantee that the Golf Course Utility will not continue the need (for) additional taxpayer subsidies.

“Alternatively, by leasing the golf course to the Jaworski Group, the taxpayers should not be subsidizing the Golf Course beyond 2018. The Jaworski Group will immediately boost the visibility, credibility and reputation of our golf course. Ron Jaworski is a national sports figure and regional sports hero who operates successful golf courses in South Jersey.

“In closing, I would urge the new council majority in 2015 to place personal and political agendas aside and place the interest of the taxpayers first – and lease the golf course to the Jaworski Group.”