It is with surprise that many of the financial facts pertinent to Superior National continue to be misunderstood. Last week’s letter to the editor dramatically reminded me of this. A summary of some facts regarding Superior National from someone who was in the middle of the course’s development and management might be helpful:
Thevision for the golf course came from the landowner, George Nelson, who eventually donated the land for the course.
The Lutsen Tofte Tourism Association (LTTA) was successful in getting a new state statute allowing our lodging properties to impose a 3% tax on all West End lodging.
LTTA negotiated an agreement with the county whereby the county would issue general obligation (GO) Bonds to fund course construction which would be repaid by having the county retain 2% of the LTTA’s 3% lodging tax proceeds. Lodging properties, through LTTA, contributed approximately $5,000,000 of their
marketing
dollars to fully pay for the construction and purchase the capital equipment needed for Superior National.
TheCook County – Grand Marais Joint Economic Development Authority (EDA) was created by the county as a vehicle to own the golf course. TheEDA did not have a role in development or payment for the golf course. The total county levies since the creation of the EDA exceed $1,700,000 of taxpayer dollars for the staffing and administration of the EDA office.
LTTA created a sister corporation, Recreation Management Company, (RMC) which negotiated with the county to develop, construct and operate the golf course. Thisentity was responsible for all aspects of the construction of both the original 18 holes; the 9-hole expansion; the preparation and implementation of an annual business plan; and the major hiring decisions and supervision of operations. RMC submitted the business plan for approval by the EDA and reported on operations each month during the golf season. During RMC’s management, the course generated about $950,000 in positive cash flow in addition
to making investments in marketing and capital improvements each year.
Theprincipals of RMC decided to disengage from the contractual agreement to manage the golf course in 2002. TheEDA has had management responsibility since that date.
Theletter asserts that the golf course is “failing.” It is true that the fiscal performance of the course has not generated adequate revenues either to maintain marketing expenditures and capital reinvestment needs or to provide positive operational cash flow.
However, given that the golf course provides employment for approximately 40 of our citizens, helps fill beds for our lodging properties and helps many of our food, beverage and other retail operations throughout the county, “failing” is not the proper term. Thisasset is a critical amenity in attracting guests to our county and supporting our economy.
Scott Harrison
Lutsen
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