Home Opinion Editorials SELL SHARES IN BUFFALO PEAK
SELL SHARES IN BUFFALO PEAK
Across Oregon, communities are contemplating building new golf courses. Following the success experienced by Bandon Dunes, which racked up 37,000 rounds of golf in its inaugural year of 1999, the ports of Astoria and Tillamook are proposing courses.
Less than an hour and a half west of La Grande, the Port of Morrow at Boardman has cleared land for a new 18-hole public golf course. The difference between that course and those proposed for the north coast is that the port itself is paying the cost of development and will not be dependent on making money right out of the blocks.
THE WAVE OF NEW golf courses around the state will not help Buffalo Peak Golf course in Union. The course is suffering from a lack of capital resources. The course was a great idea but is suffering from problems that will be difficult to overcome, the biggest of which is a short golf season. Another problem created by the weather is the number of retirees who leave the region for several months out of the year. Lack of population growth is another issue. There just aren't a lot of golfers in the region.
It won't do any good to start pointing fingers at anyone concerning the financial crunch at Buffalo Peak. The course's revenues fell almost $48,000 short of operational costs in April and May, not including payments on the principal owed to Eaton Vance, the bondholder. Union County has spent $110,000 on the course and borrowed $150,000 from the state to pay for additional costs. The county has been considering borrowing money from the state to purchase the course from Eaton Vance for $2.5 million. That amount could increase to $3 million if interest capitalization is accrued.
THE COST OF OPERATING Buffalo Peak can range from $500,000 to $700,000 annually depending on what improvements are made to the course. The $2.5 million to $3 million debt is what puts the course in jeopardy.
The county and the City of Union should consider a public offering of stock in Buffalo Peak. Shares could be sold to retire the debt. Thirty-thousand shares could be offered at $100 each. Any additional revenue raised could be used to create a more permanent clubhouse and improve the cart paths. Shareholders could then sell their shares back into a pool, but not for at least five years. No dividends would be paid until at least five years had passed and shares could not be sold for the first five years.
THOSE WHO PURCHASE shares would become the primary pool for year-round memberships and could be a reduced fee. A different annual membership rate could be created for non-shareholders.
Buffalo Peak was a wonderful idea and should be kept solvent and operational. Being creative in how to pay off the debt and creating enough operating revenues should be the focus of local people who believe strongly in the future of Union County and Northeast Oregon. No one should expect taxpayers who don't care about golf to make the course financially viable.