Vote on golf course possible

County Council considers buying Compass Pointe

`It would clean the slate'

Some worry purchase might hurt bond rating

February 06, 2005|By Childs Walker | Childs Walker,SUN STAFF

The Anne Arundel County Council may vote tomorrow night to take over the financially troubled Compass Pointe Golf Course in Pasadena from a quasi-state agency that has developed and operated it since 2001.

The council will consider whether to issue $26 million in bonds to buy out the Maryland Economic Development Corp. The move is favored by County Executive Janet S. Owens, a Millersville Democrat.

Alternatively, council members could opt to leave the golf course under MEDCO control, with the county offering possible financial support if the course continues to lose money. Or the council could choose a middle road, possibly paying $3 million in estimated construction overruns but not taking over the course.

Council Chairman Ronald C. Dillon Jr. also said he is leaning toward taking over the course, which has 27 of 36 planned holes.

"It would clean the slate, end the surprises and allow us to move on," said Dillon, a Pasadena Republican whose district includes the course.

But critics, led by Councilwoman Barbara D. Samorajczyk, say a takeover would further entangle the county in a bad deal that is unlikely to provide significant long-term profits. The Annapolis-area Democrat argues that MEDCO should be left to succeed or fail on its own.

"Then, there are three or four of us in the middle who could be swayed one way or another," said Councilman Edward R. Reilly, a Crofton Republican.

Reilly said he is not sure the council has enough information - about dangers to the county bond rating if MEDCO defaults on its obligations or about the marketability of the course - to make an informed decision. That could mean a long discussion tomorrow night or could mean the council won't vote until a future meeting.

Under county rules, a takeover would require the support of five of seven council members because it would involve adding a capital project in the middle of the county's budget year.

County leaders have debated what to do about the course since they made a $1.1 million loan to MEDCO last year to make up for revenue shortfalls. Council members said they were frustrated that the county's contract with MEDCO made the $1.1 million loan a virtual obligation, although the county plays little role in supervising the course.

Robert Brennan, executive director of MEDCO, said he would welcome a county takeover of the course.

Such a move would be preferable, some county officials say, because it would lower interest costs and reduce uncertainty.

John Hammond, the county finance chief, has said a takeover would have no impact on the county's bond rating and would be the best way to ensure the course is complete and profitable as soon as possible.

Dillon said he is also eager to see the county's relationship with MEDCO end.

Council members have approached such a move with little enthusiasm, but several outside advisers have told them that the county's bond rating could drop if the golf course is left under MEDCO control and the agency cannot meet its financial obligations.

Samorajczyk said there is little hard proof that the county's bond rating would be hurt if MEDCO continues to struggle.

She also questioned a study of the golf course's financial prospects, performed by a county-hired consultant, Economic Research Associates. The study says the course could make $5 million a year in revenue by 2008. But Samorajczyk said her research shows that national demand for golf courses is stagnating and that the Baltimore-Washington area is saturated with mid- to high-price courses. Owens noted three years ago that the county had only one other public course, Eisenhower Golf Course near Crownsville, to serve about 500,000 residents.

The county bought land for Compass Pointe in the 1980s and later persuaded developers to donate additional property. Its decision to have MEDCO develop the course prompted legal threats from private developers, who said the nonprofit was designed to promote projects in economically depressed areas, not in thriving markets.

State legislators then expanded the corporation's charge, allowing it to move forward on Compass Pointe in 2001.

MEDCO officials blamed revenue shortfalls and cost overruns on a delayed opening caused by persistent wet weather last year.

The original budget called for the course to be self-sufficient by now. The county is supposed to take over the golf course when MEDCO's bonds are paid off in 25 to 30 years.

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