More than 30 people, including the entire county board, the mayor of Grand Marais, three city councilors, and five out of seven Cook County/ Grand Marais Economic Development Authority (EDA) members (some in dual capacities) attended a 2½-hour meeting at the courthouse Thursday, September 9, 2010 to talk about what to do with Superior National at Lutsen golf course.
A group of interested businesspeople and golfers had previously proposed transferring ownership from the EDA to the county (which was voted down by the county board), turning management over to a new nonprofit, and dedicating county funds to rehabilitate and market the course. At the table with the elected officials were business people Charles Skinner, Scott Harrison, Mike Larson, and Mark Sandbo.
The proposal revised— and revised
Originally, the proposal had requested that the county dedicate $1.8 million of the county 1% sales and use tax for capital improvements, pay off a $460,000 bond, and fund golf course operations in the amount of $750,000 over 10 years. At this meeting, the golf course group brought an amended proposal that they amended even further during the course of the meeting.
Mark Sandbo stated that they were no longer asking for operating support directly from the county, rather they were asking for up to $375,000 in support from the EDA, which would get the funding by increasing its levy. They were also asking the county to loan rather than give Superior National $460,000 to pay off its bond, a move that would save $186,000 in interest, he said.
Charles Skinner said that if the county dedicated only $1.25 million of the 1% tax, they would hope to find funding from other sources for the rest of the course’s capital improvement needs or would ask for more several years down the road.
With the requested assistance, the group expects the golf course to be “completely self-sufficient” by 2020. They estimate that each dollar spent will bring a return of $15 to the community by that time. “We think this is a very sound investment,” Charles Skinner said. “This provides a longterm solution for the golf course so it can fulfill its original mission to bring more tourists to Cook County.”
The problem and the potential
Thegolf course advocates maintain that a lack of investment in marketing and capital improvements have resulted in fewer people coming to Cook County, financial demise, and the loss of Superior National’s original status as a premier, destination golf course.
The written proposal put together by the group states that since Superior National was built in 1992, both industry standards for high-end courses and customer expectations have increased. Planned improvements include upgrading the sand bunkers, replacement of a dilapidated irrigation system and installation of rest rooms along the course.
According to the proposal, the number of rounds being played in the U.S. each year has declined while the number of new golf courses has risen. Municipal golf courses have been closing across the nation, and more will close “if the national economy and consumer confidence does not begin to improve within the next several years,” the proposal states. “…Thesuccess the golf industry enjoyed during the 1980s through the 1990s is gone.”
The number of rounds played at Superior National in 2009 was 33% less than the number played in 2001. Commissioner Bruce Martinson said the EDA should perhaps have started working with the county in 2003 when the course started falling behind financially.
Friends of Superior National member Jim King shared a comment from one Superior National golfer: “Beautiful golf course, beautiful venue. With a few improvements, it could be the best course in northern Minnesota.”
Former Lutsen Resort owner George Nelson, who donated the land for Superior National, said that he used to have conventions cancel reservations at the resort when they found out that it was a nine-hold par-three course rather than an 18-hole championship course.
The course was eventually improved but then went downhill, Nelson said, “because bureaucrats can’t manage industry.” He believed the course would improve immediately with good management.
Many vacation homes and year-round residences have been built in Lutsen solely because of Superior National’s presence, Nelson said. “I think you have before you almost a no-brainer,” he said.
Nonprofit management board?
The proposal points out that many recreational facilities across the nation are owned by governmental entities but managed by separate organizations. It suggests that the EDA enter into a long-term management agreement with a newlyformed non-profit corporation to be called “Superior National Stewardship Corporation.”
Suggested for the seven-person board of directors are:
. Mark Sandbo (EDA board; EDA golf committee)
. Hal Greenwood (EDA board; EDA golf committee)
. Mike Prom (Gunflint Trail resident/Voyageur Canoe Outfitters owner)
. Scott Harrison (Lutsen Resort owner/director of management corporation that ran Superior National before the EDA took over)
. Jim King (Friends of Superior National/EDA golf committee)
. Charles Skinner (Lutsen Mountains owner/Cook County Visitors Bureau chair)
. one Cook County board representative
The golf course group believes these people have the “vision, focus, and skills” and are “highly motivated” to manage the course well. Jim King said, “These are people who are willing to do the work, and they work for cheap.”
According to the financial plan, “The long-term management agreement [with] the Superior National Stewardship Corporation will provide a stable long-term management structure for the golf course that will leverage private skills, networking ability, and commitment of private owner/operator marketing budgets and volunteer stewardship to realize the potential of Superior National to provide a quality recreational experience and substantial economic benefits for the citizens of Cook County.”
The financial plan puts marketing into the hands of the Cook County Visitors Bureau, a move that Commissioner Bob Fenwick believes many citizens would oppose because they want to see Superior National remain separate from the tourism associations.
More discussion, no decision
Commissioner Jim Johnson passed along some questions voiced by his constituents: How much confidence do we have that this plan will work? Would other investments serve the county better? Would we be throwing good money after bad? If the private sector doesn’t want to take on the risk, should we? How popular will golf be in the future?
Mark Sandbo pointed out that Superior National would not need to be subsidized forever, unlike other proposed 1% tax projects, such as a community center and pool. Scott Harrison concurred, saying this project is “the only one remotely self-financing.”
Jim King said, “We’re shovelready. The money is there, and it ain’t gonna get any better in three or four years.”
According to Sandbo and Skinner, the management organization that originally ran the golf course returned money to the EDA. Commissioner Jan Hall said the EDA stopped investing in the golf course because they thought other projects were more promising.
“Elected entities are notoriously bad at running a business,” said Commissioner Bob Fenwick. “In fact, it’s virtually impossible.”
Thegroup discussed the possibility of fixing up the course and then selling it or leasing it to a company that specializes in managing golf courses. Charles Skinner cautioned against selling or leasing it to someone who wouldn’t manage it with the entire county’s best interests in mind.
Lutsen Rec owner Paul Quinn suggested bringing in a consultant with expertise in golf courses.
The county commissioners made no decisions at this meeting. On the agenda for the September 14 county board meeting was a discussion regarding use of the 1% tax, payoff of the golf course’s bonds, and time-limited support for operating expenses. Since the board voted not to take over ownership, who manages Superior National remains in the hands of the EDA.
Leave a Reply