Thursday, 11 September 2014 06:31

Elmwood Golf Course agreement should concern city taxpayers

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Recently the City announced an agreement with Elmwood Golf Course to loan them $2.4 million that will be used to do some overdue renovations on the course. 
The City owns the property upon which the golf course is located. The City leases the property to the golf course for $1 per year.
According to media reports that quoted the parties in question, it seems to be a win, win agreement that benefits the City as well as the golf course. 
However, as one looks at the actual wording of the agreement one can readily see why nobody is speaking too publicly about the details and as they say, the devil is in the details.
The agreement states the City will give Elmwood Golf Course a $2.4-million loan that does not have to be paid back for 45 years (2059).  This is an unheard of length of time for any kind of loan. 
In addition, the golf course does not have to start making payments for six years (2020). After the City develops the lots on the property, which we owned already, the first $20,000 the City receives for each lot sold will go to pay down the loan. We are told there will be 71 lots developed. If the golf course gets the first $20,000 for each lot, that amounts to $1.42 million. 
In addition, if the City, after selling all the lots makes a profit, all of that profit will also go to the golf course to pay down the loan. 
In effect, depending on how much the City prices the lots, the total amount of the loan could be paid with City dollars. In addition there has been no personal guarantee or collateral pledged in case of non-payment of the loan.
We have been told how many extra property tax dollars will be generated by the sale of these lots, but the sale of the same number of lots on any other City-owned property would generate the same revenue, so I fail to see any real revenue gain for the City. 
We have been told of the buzz in the community as a result of this agreement, and I am sure those who wish to build a house on the golf course and those who use the course are quite happy as they should be, but at what cost to the ratepayers of the rest of the city?
If the City were upfront with this transaction, they would call this a gift or a grant to the golf course, not a loan. Of course with our long-term debt already at historic and unprecedented levels, what is another $2.4 million?
Don Robinson, Swift Current

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