Proponents of a proposal to transfer ownership of Superior National at Lutsen golf course from the Cook County/Grand Marais Economic Development Authority (EDA) to the county left the August 24, 2010 county board meeting quite unsatisfied.
The discussion went on for over an hour and a half and ended with a rather heated discourse. Numerous people supporting the proposal were in attendance.
A pitch is made
Superior National Golf Course Committee chairman Mark Sandbo began the discussion with a PowerPoint presentation to the board, calling the course “a significant asset” to the county. Sandbo, also on the EDA board, said the EDA would be willing to turn the course over to the county if the county agreed to fund it in the amount of $100,000 each year for an estimated seven years.
Sandbo outlined a decline in the golf course’s financial state over the last decade as well as a need for equipment, repair, and improvements. In the last 10 years, the number of rounds played per year has declined from a high of 22,054 in 1999 to a low of 14,757 last year. Sandbo attributed this decline to a decrease in marketing expenditures from $75,000 a year to $23,000 a year since 2003 and a decrease in capital expenditures from $139,000 a year to $7,500 a year since 2004.
A golf course business plan written by Lutsen business owners Scott Harrison, Charles Skinner, and Mike Larson calls for $1.57-1.82 million in capital improvements.
One community member, Chris Steele of Seagull Lake, asked what had caused this decline: A failed business plan? Inadequate marketing? Poor management? “All of the above,” was Sandbo’s answer.
Golf course options considered
Sandbo offered three options for dealing with the situation: continue with the EDA’s oversight of the course, sell the course, or enter into a long-term management agreement with a nonprofit entity that, according to Sandbo, would allow the course to fulfill its purpose of drawing tourists to Cook County.
Sandbo did not recommend continuing the current management structure. “The golf course is a drain financially and mentally on the EDA,” he said. “They developed it, but they aren’t the best entity to manage it.”
“I believe something needs to be done,” Commissioner Bruce Martinson said. “Right now we’re keeping the EDA afloat.”
“Thisis a wasting asset that has not nearly the impact that it used to have or could have,” Scott Harrison said.
The course would not sell right now because of its liabilities, Charles Skinner said, but it could sell if they got it back into shape. He said it would be better to have the course run by people who have a real interest in making it work.
If a private enterprise couldn’t make the course profitable, Chris Steele said, how could a government entity? He asked what would qualify the county to successfully oversee a management corporation and what would make the golf course any different from the post office (on a federal level) or the Grand Marais Pool (on a local level), neither of which turn a profit.
Commissioner Fritz Sobanja said the nation is in an economic slump and golfing is on the decline. He cautioned against overinvesting and overbuilding. He said he opposes county ownership of the course, contending that taxpayers would be funding an endeavor that would primarily benefit business owners.
Jim King of Friends of Superior National addressed Steele’s questions, stating that the difference between the EDA and a management corporation overseeing the course would be the dedication, involvement, and passion of the managers. Not all of them are business owners standing to receive economic gain, he said. Mark Sandbo asked him to come up with a business plan, he said, but since he is not a businessperson, he asked Harrison, Skinner, and Larson to put one together.
Benefits weighed
When asked how school, hospital, county, or Border Patrol employees would benefit from their tax dollars subsidizing Superior National, Commissioner Bob Fenwick pointed out that the Grand Marais pool does not bring in enough income to support itself and that the tennis courts are only used by some community members. An entrepreneur would never buy the pool or the tennis courts, but they might buy the golf course, he said.
“Do we want to continue to have Superior National be a part of the county?” Fenwick asked. If the answer is yes, he said, then they have to ask who can make it work.
The key, Commissioner Bruce Martinson said, is to get people who are knowledgeable about golf courses run it, not just business owners.
Commissioner Jim Johnson had emailed a letter to constituents explaining the proposal. He received 47 replies, more than he usually gets when he requests feedback. “There was not a lot of public support for the county to take over operation of the golf course,” he said.
Scott Harrison suggested that Johnson take a leadership role in this case instead of automatically following the wishes of people who may not be as informed as he is. Jim King said he thought that if a survey had been taken among West End residents years ago regarding investing money in the Gunflint Trail when it was still gravel, it would never have been paved.
” Commissioner Johnson suggested that options might be possible beyond the three proposed by Sandbo. “You’re all good people,” he said. “You’re trying to solve a problem, and I appreciate that.”
Chris Steele pointed out that Cook County has numerous recreational opportunities that draw a variety of visitors. The question, he said, is how much to subsidize. “You guys have to figure that out,” he said, “but I’d advise you to be cautious.”
Mark Sandbo asked if the EDA could hire a management organization and use 1% sales and use tax income for capital improvements. Yes, Commissioner Johnson said, adding that the 1% tax committee had recommended designating almost a million dollars for Superior National.
As the discussion wound to a close, Harrison said the course needs $3 million in improvements and seven years of operating subsidy. It is worthless right now, he said.
Commissioner Fritz Sobanja disputed the statistics used in the business plan, calling it “children’s talk.” Commissioner Martinson took issue with Sobanja’s choice of words, and Sobanja called for order.
“I think you’re really not interested in what that facility brings to Cook County,” Lutsen resident Patty Nelson said. She estimated that 99% of Superior National golfers end up spending money in Grand Marais and touting the county’s attractions when they return home. She stated that the golf course brings the kind of business to the county that the county wants. “It’s a green footprint,” she said. “It isn’t a smokestack.”
“At this point, what’s needed is good management,” said Nelson’s husband, George. The couple donated to the county the land that now comprises the golf course. Nelson contended that the course was managed well until the EDA took it over from a management organization about 10 years ago. The course needs some funding it can rely on, he said, and if the county does not support the course, he said to the board, “you are not doing your job as commissioners.”
Proposal declined
Commissioner Martinson made a motion that they move toward county ownership, toward making a financial investment in the course, and toward hiring a management organization. Themotion died for lack of a second.
Commissioner Johnson made a motion to deny the request to turn ownership of the golf course over to Cook County, and Jan Hall seconded it. It passed with ayes from commissioners Sobanja, Johnson, and Hall. Voting nay were commissioners Fenwick and Martinson.
“We’ll work it out,” Sobanja said, “We’ll survive.”
The board scheduled a work session to which it will invite the EDA and the City Council to discuss the issues further. It will be held 9 a.m. Thursday, September 9 in the commissioners’ room in the courthouse.
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