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AN UPHILL CLIMB FOR BUFFALO PEAK
By Alice Perry Linker
Observer Staff Writer
The view of Buffalo Peak Golf Course from spring 2002 is dim, but Union County officials are looking for ways to brighten the picture.
During a work session Wednesday between the county commissioners and the Union City Council, Dennis Spray, the county's general services director, said the county is intensifying its efforts to find programs to help pay the construction debt now owed to Eaton Vance, a bonding company.
Revenues from the course for April and May reached $85,127, while operational costs hit $133,426. The total bonded debt is now $2.85 million and there is no way to pay any part of the principal, said Marlene Perkins, the county's administrative officer. Payments to Eaton Vance, under a normal schedule, would be $250,000 annually.
The bond holder has agreed to defer any interest payment until June 30 to allow the county time to reorganize a payment package or refinance. The bond holder has reserves of $293,000 that will pay interest through July 2003.
Perkins said Wednesday that the county had hoped to borrow from the state's Economic Development Department under a deferred payment plan at an interest rate of less than 5 percent, but she said she recently learned that while the state plan defers the principal payments for three years, it requires a capitalization of interest, which increases the amount owed to more than $3 million. The rate of interest is 5.5 percent over 25 years.
There may be other types of repayment plans available through the state that will allow lower payments in early years and require higher payments in the last years of the debt, she said.
Eaton Vance has tentatively agreed to reduce the price of the golf course to $2.5 million should the county decide to buy the property with state support. The reduction would mean a loss of $57,000 for the bonding company.
"I don't think I'm willing to borrow $2.5 million," Perkins said.
A state team known as the Community Solutions Team has been meeting with Spray and Perkins. The team includes representatives from the economic development department, the Department of Environmental Quality, the governor's office, the Department of Transportation and the Land Conservation and Development Commission.
The City of Union originally negotiated the bond and built the golf course, partly as a way to use treated effluent from the city's sewage treatment plant.
City Councilor Barbara James said Wednesday that the city cannot release effluent into Catherine Creek. Should the golf course close, other methods of distributing the effluent would have to be developed.
County Commissioner Colleen MacLeod, who said she supports the golf course, also said that she does "not feel prepared to go into negotiations right away."
County officials have said they believe the golf course can be in a position to begin making debt payments in three or four years. The county has also said that it cannot continue to subsidize the golf course as it has in the past.
Spray said the county spent about $60,000 on the two golf course buildings, and Perkins said about $50,000 has been spent for salaries and other operational needs. The county borrowed $150,000 from the state last fall to help meet these expenses.
"The county has spent a lot of money at the golf course," Perkins said during the meeting. "What is the city willing to spend?"
Union City Councilor Dick Alexander said, "The golf course is a source of pride for Union. We all want it to succeed, but it is out of our