As Superior National at Lutsen golf course finances are debated, planning continues for course improvements. If the planned infrastructure improvements come to fruition there will be more cart paths like this one at the course, as well as deeper tee-off areas, wider play corridors, better turf, and better sand traps.
As it has done annually, the Cook County/Grand Marais Economic Development Authority (EDA) requested operating funds from county coffers to help Superior National at Lutsen golf course get its summer season in full swing. On May 22, 2012, Superior National General Manager Bob Fenwick and EDA Chair Mark Sandbo went before the county board to request a short-term loan of $75,000.
The EDA, which owns Superior National, had expected to restructure longterm debt this last winter such that this loan would not be necessary. They are still working on that goal, which they expect will save about $30,000 in interest and produce extra cash flow of $15,000 a month.
“Based on that expectation,” Sandbo and Fenwick wrote in a letter to the board, “important spending decisions were made regarding the course conditions, hard goods and marketing….” These expenditures included paying Sirius Golf Advisors $1,500 a month for consulting services; sending Consultant John Wait, General Manager Fenwick, and golf pro Greg Leland to a PGA merchandise conference to look at equipment options; purchasing a new “point-of-sale” system to track sales; purchasing a new range ball dispenser; improving the nine-hole Mountain course in preparation for closure of the other courses during the upcoming renovation, and marketing initiatives.
At the conference, Fenwick said, they looked at point-of-sale equipment, range ball dispensers, and golf simulation machines. “I think it’s something the golf course should look at,” Fenwick said of the simulation machine, “especially with our close proximity to the ski hill.” People look for other things to do besides ski when they are here, he said.
Planned marketing efforts include a billboard on I-35 between Duluth and the Twin Cities, a new brochure, social networking, and improvement of Superior National’s website.
The EDA failed to acquire one bond because some tasks related to the title had not been done in 1999 when the last nine holes were built. They were also impeded by a 25-year non-money-related mortgage held by the U.S. Economic Development Administration that takes precedence over other mortgages. “It’s very, very complex,” Fenwick said. “This process has been very much two steps forward and one step back.”
The best 18 holes possible
Commissioner Sue Hakes said that when they granted the golf course $3.1 million from the county’s 1 Percent Recreation and Infrastructure Tax revenues, they were told it would pay for “the best 18 holes” possible. At a meeting with the consultant and the architect the week before, they were told the county’s money would only fix up nine holes, although the cost would be more like $2.9 million. Hakes said she was uncomfortable handing over the $3.1 million without knowing how the EDA would fund the other nine holes. (See related story on proposed course improvements in article to the left.)
Hakes recommended that the county pay half of the $3.1 million and require the EDA to come up with the other half before the first nine holes are renovated and then pay the rest of the $3.1 million when funding for the rest of the renovation has been secured.
General Manager Fenwick suggested that they go out for bids on the whole project, which he said is not less of a project than what had been previously proposed. The initial concept, he said, called for building new holes without necessarily upgrading existing ones. “I think we’ll be pleased with the end result of this project,” he said.
EDA owes the city
Commissioner Hakes also said she had a problem with the EDA seeking bonds for the golf course when it owes the city $1.6 million plus interest for costs incurred building Cedar Grove Business Park in Grand Marais. Very few of the lots that were built several years ago have sold. She also said she didn’t like the fact that responsibility for the bonds could fall back on the county.
Fenwick said they would be using equity in the golf course to fund the cost of building the business. The bonds they are seeking are revenue bonds, which would be paid back from proceeds from the business.
Commissioner Bruce Martinson made a motion, seconded by Commissioner Jim Johnson, to loan the EDA $75,000 for the expenses outlined at 3 percent interest over a 90-day period.
Commissioner Hakes said she would not support the motion if part of the money would go to changes to the Mountain course in preparation for renovations to the other holes because she doesn’t support the overall renovation without funding being completely in place.
“I have to fix that nine whether it’s on this piece of paper or not,” Fenwick replied. He said his goal is to solidify the funding needed for the entire renovation. “You’re venturing into the point where you’re telling me how to run the business,” he said.
Commissioner Fritz Sobanja agreed, saying this should be a loan for the course to use as needed.
The motion passed 4-1, with Commissioner Hakes voting no.
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