Money and management questions for Superior National

A late evening meeting of the Cook County commissioners and members of the Cook County – Grand Marais Economic Development Authority (EDA) and the consultant hired to evaluate the Superior National at Lutsen golf course (SNL) on August 18, 2011, started with discussion of just who is managing the golf course.

Commissioner Sue Hakes noted that the report by John Wait of Sirius Golf Advisors identified a problem. She said, “The EDA owns the golf course. The county holds the purse strings. And then there is a golf course committee. Is the problem a lack of leadership— or too much leadership?” asked Hakes. Commissioner Jim Johnson, who chaired the joint meeting, said it is clear to him that the EDA is the management entity for SNL. EDA Board Chair Mike Littfin said the golf course committee is an advisory board to the EDA. Littfin said the golf course committee had been empowered by the EDA board to make recommendations to the EDA. “They are the people who live here, who golf, who know the golf course,” said Littfin.

Commissioner Hakes said she would like to revisit the mission statement of SNL. Littfin asked John Wait if the mission statement was still relevant and asked for an overview of his study. Wait said whether or not the mission statement is still relevant depends on what the group decides. “It boils down to the commitment you want to make to Superior National as an economic stimulus. It can be an economically profitable entity for the county. It could be something everyone could be proud of, whether they golf or not,” said Wait.

Wait acknowledged that the commitment and investment had to be balanced against the risk, but he stressed that it should not be done “halfway.”

Wait said 20 years ago when the golf course was being developed, there were concerns about the cost and plans were scaled back. “So you have a C-grade product on an A+ piece of property,” said Wait.

“If you are going to make the commitment and invest the money to make this a resort-caliber course, you need to really do it,” he said.

What needs to be done to make SNL a resort-caliber course was discussed, such as improvements to the course, changes to the clubhouse to create a “19th hole” sports bar and possible additional holes. Wait said the fact that additional land may be available would change the scope of his work as he proceeds with the business and marketing plan. He explained that there is a significant difference in an 18-hole, 27-hole and 36-hole golf course. A 36-hole course offers golfers three different courses to play. He said with 36 holes, a golf course is not just a “stop” but a “destination” where golfers will come to stay and play for two or three days.

Whatever the EDA/county decided, Wait said he needed to know as he moved ahead. Wait suggested hiring golf course architect Jeff Brower to assess the land and do some designs for 36 holes, to have it for the future. He estimated that it would cost about $3,000. George Nelson, who has donated land for the golf course, urged the EDA/county board and consultants to meet with the landowners immediately to get things rolling.

Wait agreed that time was critical as the analysis of the land should be conducted before snowfall or it would be another year before anything could be done. The problem was that he had a flight booked. He said he would be willing to stay if the county recouped his flight rescheduling fee and other expenses. The county board passed a motion authorizing up to $500 to reimburse John Wait for changes to travel so he is able to set up a meeting with SNL staff and the landowners.

$1.8 million earmarked for SNL

Funding of possible golf course improvements was discussed at length, with Golf Course Manager Bob Fenwick making an appeal to the county commissioners to earmark $1.8 million for SNL from the county’s 1 percent sales and use tax, as has been discussed. He said he has been talking to other funding sources. “I have to be able to tell the people that I am going to, to leverage our funds, that the county has committed to $1.8 million,” said Fenwick.

Commissioner Hakes said they would like to see the business plan completed by Sirius Golf Advisors first. She said she would like to see data on the economic benefit to area lodging facilities. “If we’re going to spend almost $2 million, are there beds to fill? We basically have golf in June, July and August—what is the opportunity here?”

Jim King of the EDA golf committee said that data is available and promised to get it to Hakes. After lengthy discussion a motion by Commissioner Fritz Sobanja passed to set aside $1.8 million for SNL— contingent on creation of a business plan and a construction proposal.

Some of $1.8 million released to SNL

Further discussion led to use of the $1.8 million for SNL as the EDA passed a motion to authorize up to $3,000 to hire Jeff Brower to complete the study of the additional land, with the caveat that the EDA/county is not committing to 36 holes at this time. County Auditor-Treasurer Braidy Powers said he believed that is an authorized use of the 1 percent funds.

Fenwick presented a funding request to replace outdated mowing and groundskeeping equipment and to repair the damaged roof on the clubhouse. He and Grounds Superintendent Mike Davies explained the need for the request, which totaled $229,764. Fenwick said the actual price may be more or less as they seek bids and negotiate with vendors. He asked for funds up to $250,000. Sobanja said requests normally go to the 1 percent committee and Hakes said this request, minus one piece of equipment, had been presented to that committee already. She made a motion to authorize the purchase of equipment and repairs, to be deducted from the $1.8 million earmarked for SNL from the 1 percent sales tax. The motion carried.

Some of the 1 percent money had already been potentially designated at the August 9 EDA meeting. At that meeting, Fenwick recommended that the EDA board hire Wait to work on the business plan for SNL. At that meeting, Wait proposed a one-year contract with a one-year option. The fee would be $2,500 for the first month, and $1,500 for each additional month. It would include the business and marketing plan, plus 15 hours per month for consulting. Wait estimated the oneyear total would be $19,000 plus travel expenses.

Moving forward at SNL

Looking at the preliminary report, Fenwick said, “I agree with John [Wait] 100 percent. If you’re going to do this, don’t just stick your toe in the water— jump in all the way.”

At the joint meeting, Fenwick urged Wait and the EDA to listen to the golf course staff. He said Grounds Superintendent Mike Davies and other staff have consistently worked to keep the golf course running during all the “backstabbing and bickering.” The group asked Mike Davies for his thoughts and he said, “When our budget began to drop off we viewed it as a challenge to operate. But as we met each challenge, the bar kept getting raised and it’s been hard to meet the challenges. I think the staff has done a phenomenal job. Earning the Minnesota Municipal Golf Course of the Year was a significant accomplishment.”

Wait acknowledged the hard work of Davies and his staff and said, “When I spoke of the lack of leadership, I was referring to the ownership of the course, not the staff.”

Wait added that it is not yet clear what the best management structure would be, but said, “Listening to the discussion in this room, you are making my case for me. You’re going to be best served by having an entity that is as far away from the political process as possible. Mark [Sandbo] made the statement ‘You can’t manage a golf course by committee.’ I agree—you end up with paralysis by analysis.

“Let me be the first to say Bob [Fenwick] has done a great job. Bob may be part of the management team. The current staff may be part of that team. But you need to have someone who is familiar with resort operations, with marketing, etc., apart from the politics.”

Equipment requested and approved for Superior National