Golf course decision looms in Columbia Council concerned with money issues

October 26, 1992|By Mark Guidera | Mark Guidera,Staff Writer

The sudden resignation of Columbia Councilman Joseph Merke may have put to rest the council's feud over whether he should be barred from voting on a proposed golf course because his home would abut the greens.

But last week's resignation didn't settle the central issue the council is faced with: Should it approve $5.5 million this year to build the proposed regulation size, 18-hole course?

Though the council is split on the issue, most agree on one point: A final decision must be made this year. The issue has been revisited by the council every year for several years. An answer could come as early as Nov. 5, when the council meets to make final a long-term plan.

"We're at a point where we have say, 'Let's do it or let's not do it. But let's make a decision,' " said Columbia Councilman John Hansen, echoing the sentiments of several other council members.

There are two key questions in the debate.

First, would the venture be a long-term money-maker or loser for the Columbia Association. The association, which would operate the facility, has a hefty deficit and is starved for cash.

Second, would borrowing $5.5 million to build the proposed Fairway Hills course be fiscally responsible?

To settle the issue, Mr. Hansen plans to propose that the council vote on two options for the land.

One option will call for approval of an 18-hole, regulation-size golf course. The other option would place a long-term easement on the land to bar any development. Approval of that proposal would put the issue to rest for years.

Mr. Hansen says his vote hinges on the question of whether the course would, in the long term, generate much-needed revenue.

In the short term, everyone agrees, Fairway Hills would generate more red ink.

The course is projected to lose money until the year 2001, when it would begin to turn a profit -- $167,000 that year, rising to $966,000 by 2004.

Mr. Hansen says that if it can be shown that those profitability projections are reliable, it would bolster his support for building the course.

The Columbia Association staff says the course could continue to lose money or produce a reduced profit margin if membership is lower than projected or if maintenance costs are unexpectedly high.

Residents and council members who oppose the 18-hole proposal argue that the profit and loss projections for Fairway Hills should be looked at with skepticism in light of the deficit the Hobbit's Glen Golf Course is running.

Hobbit's Glen -- the only course owned and operated by the Columbia Association -- has annual operating income of about $1.7 million and annual operating expenses of about $1.5 million.

But after figuring in the interest payments on capital expenses incurred to upgrade the course years ago, and other costs, Hobbit's Glen has a $270,000 annual loss. That's despite the fact it's considered to be overcrowded.

Mr. Hansen and others on the council think the fiscal problems at the 20-year-old Hobbit's Glen course stem from a poor original design and therefore it should not be considered in the debate over Fairway Hills.

Council Member Fran Wishnick says she will propose a third course of action.

Ms. Wishnick wants the council to consider a nine-hole course.

That would ease concerns about the environmental effects of the larger course and the bigger bond debt added to Columbia's books, she argues.

Cost and profit estimates completed this week on a nine-hole course show that it would require about $3.8 million to build. A nine-hole course would begin turning a modest profit by 1998 of $21,000 that year, it was estimated.

There are critics of the nine-hole course, too. "Eventually another council will be arguing over whether to expand it and spending money to study just that," Mr. Hansen predicts.

Still, skeptics of the 18-hole proposal argue that it may be fiscally irresponsible for the Columbia Association, with more than $84 million in bond debt and a $24 million deficit, to incur $5.5 million in new bond debt.

Mrs. Wishnick is among them. She and other critics are concerned that incurring more debt will give the council slim leeway in paring the annual lien Columbia charges all property owners.

Despite their bitter feud over Mr. Merke's situation, council members generally agree with the comments of residents who turned out at the council session Thursday. Most urged the council to set internal politics aside and treat the issue as a business decision.

Among them was Columbia resident Louis Buschbaum.

"As a businessman, I don't understand all this fighting," he said. "To me this issue boils down to a simple business decision. If your numbers show in the long term you'll make a profit then you have to incur costs in the early run to do that. If it's not clear you're going to make a decent profit, then you don't do it. Think of it that way."

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