OV Golf

Oro Valley’s golf courses and community center have been a lightning rod in the town for since its acquisition at the end of 2014.

In late February, the current Oro Valley Town Council held its first and only meeting for public input on the town-owned golf courses and community center. In the four months since, little else has been said about the subject.

Mayor Joe Winfield, Vice Mayor Melanie Barrett and councilmembers Josh Nicolson and Joyce Jones-Ivey spent much of their 2018 campaign elevating the issue, but have kept their comments reserved since taking the dais.

Some community groups most intimately connected to the golf courses have grown anxious under this silence, and are frustrated at what they see as council playing their hand close to their chests.

“It became obvious to me that if somebody didn’t take some initiative here, what was going to happen is somebody was going to do something to us, as opposed to us getting involved and trying to solve the problem,” said Mike Schoeppach, president of the local Men’s Golf Association.

The group has teed off at the two 18-hole courses for years, and have watched it change hands multiple times. Stephen Jones is a member, and happens to also be president of the Cañada Hills Community Association, which consists of 1,889 homes wrapped around the golf courses.

Many of these homeowners have been concerned about their property values since the previous town council purchased the golf courses in December 2014, a decision which led to a failed recall election and continued community controversy.

“I really feel like as a resident of Oro Valley and a homeowner in this area that we’re really being put upon,” said Pam Krebs, a Cañada Hills resident who lives adjacent to the El Conquistador 18-hole course. “We paid a premium. We’re going to lose money on our homes, and a lot of these retired people really can’t afford that.”

With no action since Winfield and the three new members took their seats, Jones and Schoeppach decided to take the matter into their own hands and worked with their organizations to draft a proposal submitted to the town government. It offers private subsidies for retention of 36 holes, in order to reduce sales tax revenue currently committed to the courses’ operations and maintenance.

They estimate the tax support could be reduced by $1 million.

First, the proposal suggests a 10 percent increase in the golf membership dues that were originally slashed when the town purchased the courses. Schoeppach said this is guaranteed front-end revenue, because members will pay their dues regardless of whether they actually make it out to the course or not.

Stacey Lemos, the town’s chief financial officer, said the fiscal year 2019/20 budget already includes a 5 percent increase in golf member dues beginning Jan. 1. Another 5 percent could be added in the future, assuming that necessary renovations, such as replacement of the 30-year-old irrigation system, are carried out.

Revenue from golf member dues has been declining in recent years. In fiscal year 2015/16, the town brought in about $876,000. That number dropped to about $726,000 the following year, and slightly increased to $784,000 the next year, and currently stands at about $553,000 through March of this year.

Second, the proposal includes an increase in monthly Cañada Hills HOA dues of $9 per household, creating $204,012 in annual revenue. Jones reasoned that the homeowners in his HOA would much rather pay an extra hundred dollars annually than potentially lose thousands in their home values following a golf course closure.

“If the HOA wants to raise dues, I have no problem with that because there’s a limit to how much they can do based on Arizona law,” said Krebs, who lives in Jones’ HOA. “And I would venture to say that most of the homeowners wouldn’t have a problem with it because the dues are so minimal now.”

With these new revenue sources, Jones and Schoeppach believe the town could eliminate its annual $120,000 payback provision to the general fund, as well as the annual lease payments for golf equipment.

They also suggest the town leases the nine holes at Pusch Ridge back to HSL Properties. That almost happened last year, but plans fell through. Guy Cook, the HOA president of the nearby El Conquistador Patio Homes, is still interested in seeing that deal come to fruition.

“The transaction documents provide for the town to lease any of the golf courses to HSL and our number one goal is to see that the golf course remain,” Cook said. “If that can be done in a collaborative way between HSL, the town and the surrounding stakeholders, we see that as a positive. If it’s not that type of arrangement, if it’s simply maintained and run by the town, that’s a positive also.”

He and the other members of the HOA are waiting for council to make a policy decision so they can help with a “collaborative solution.”

“Notwithstanding the fact that 192 homes in our HOA are adjacent to the golf course, it’s not just a parochial interest by the homeowners there, a good number of our homeowners recognize that this is an asset to the town,” Cook said.

Jones and Schoeppach said that besides the 36 hole configuration, the entire proposal is negotiable. The golf association and Cañada Hills HOA created it as a starting point for negotiating a private investment in the facilities.

“We listened at study sessions, and I’m sorry, but that’s not public input,” Schoeppach said. “You don’t do a three-minute blue card and expect to really create a conversation where people begin generating ideas about how to solve the problem.”

After reviewing their proposal, Lemos said the projections are reasonable.

“Most of the things that they are proposing we have factored in to our future cash flow analysis and projections for the options that we’re presenting to council on different scenarios for the golf operations,” she said. “From that perspective, it seems like we’re pretty aligned on the 36 hole option.”

New Projections

On May 24, Oro Valley Town Manager Mary Jacobs provided the town council with a memo of updated cost estimates for 18-, 27- and 36-hole reconfiguration options for the golf courses. It did not include projections for a full closure of all 45 holes.

The new projections are based on operational data from the last four years, analytics from the 2017 consultant’s report and national golf data provided by the town’s contracted golf management company, Troon Privé.

For the 18- and 27-hole options, the town’s revenue from memberships is either significantly decreased or completely eliminated. Without a dedicated member course, the town’s costs for operations and maintenance remain relatively the same, but a major revenue source is lost, which increases the golf course’s reliance on the tax subsidy.

The memo states the nine holes at Pusch have has not been meeting its financial goals, with an estimated $150,000 to $200,000 lost annually. Cook said this is because the town hasn’t “maximized” on all the opportunities available at that course, in terms of marketing, operations and use of the facilities.

“HSL might be more effective in maximizing the opportunities for the golf course, because of their proximity and because of their ownership of the resort,” Cook said.

During the months leading up to the August 2018 election, Mayor Joe Winfield publicly expressed a desire to get the town “out of the golf business.” In the months since he took office, he has expressed interest in possibly converting the golf courses into a public park with a reduction or removal of the irrigated turf.

According to the May memo, town staff solicited a rough estimate from Wilder Landscape Architects for how much it would cost to convert the courses to open space. That number is somewhere near $14,800 per acre. All together, the Cañada, Conquistador and Pusch Ridge courses make up 169 irrigated acres.

Town staff estimate that completing needed improvements to the 36-hole courses would cost around $3.8 million. Converting to a 27-hole course would cost $4.6 million, and an 18-hole course would cost $4.2 million with $2.2 million of capital investments necessary to reroute the courses.

If a part of the golf courses was converted into a public park with turf, the maintenance alone would cost anywhere between $5,113 and $8,562 per acre, depending on the quality of overseeding applied.

For a public park with natural desert open space, town staff predicted a maintenance cost of $4,889 per acre for the first five years, and then $2,361 after that, once the natural vegetation has been well established.

Mayor Winfield did not return multiple phone calls from Tucson Local Media requesting comment on the golf courses or the proposal.

Added costs aside, these changes could have a big impact on the residents who live next to the golf courses. Krebs said homes that are currently up for sale in her neighborhood are already losing their value because of the uncertainty that exists over the fate of the golf courses. If the courses close, she anticipates bad outcomes for her and the other homeowners.

“Personally I have three things I can do,” Krebs said. “I can choose to move out of Oro Valley, I can sell my home at a loss and move out of the village, I can potentially get together with the HOA and other homeowners and go with a civil suit against the (town), and if I stayed here I’d end up putting up a very high wall, because I sure don’t want to look at it.”

All the aforementioned options hang in the balance until a decision from the council has been made. 

Jacobs said she thinks it’s great that the local homeowner’s association wants to help financially support the golf course operations. She said all the council members have been made aware of the proposal, but they haven’t “had an opportunity to discuss as a council.”

“I have not been provided with any direction by the council to discuss or negotiate in any way, mainly because they haven’t had an opportunity to discuss this issue publicly,” Jacobs said. “I think that this is an option that they’re aware of and I would anticipate it coming up for conversation.”

The September deadline that council agreed upon for a final decision on the golf course is still intact, according to Jacobs. Depending on what that decision is, she anticipates a complex project. Whatever the council’s choice, she said there will be different types of financial investment, public engagement, plus the ongoing operations and management.

“The bottom line is their offer is contingent upon keeping 36 holes of golf and naturally that’s a policy decision,” Jacobs said. “So by some perspective, do we first figure out if the financial contribution is appropriate or does the council decide on the policy decision first? They’re tied together and I think the council is looking at not only the financials but obviously they have a lot of other criteria that they’re deliberating on which is appropriate.”

There are a couple of opportunities for public input on the golf courses coming up this month. On Tuesday, July 16 the town’s Budget and Finance Commission will hold a public meeting on golf finances at town hall. On Wednesday, July 24 the town council will hold another public study session on golf at the Oro Valley Church of the Nazarene, located at 500 W. Calle Concordia, to accommodate a larger crowd.

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