Huron Hills and the Miles of Golf proposal
Chris Mile
We see three options for Huron Hills:
1. Continue it as an 18-hole course with a subsidy from the city.
2. A city-Miles of Golf partnership making Huron Hills into a different golf experience.
3. Re-make Huron Hills into a different park experience (not golf).
Let’s look at the future of Huron Hills from strictly a financial perspective. The city’s Parks and Recreation department seems to feel that option #3 is the most costly option because switching to a different, non-golf, use would require a larger subsidy than the subsidy of approximately $250,000 that Huron Hills Golf Course currently receives. We realize that there is not a consensus on the size of the subsidy and that arguments can be made that it will be greater or less than $250,000 in the future, but to think there will be no subsidy is not realistic.
The Miles proposal will pay the city approximately $1 million over the course of a 20-year agreement. This is over and above paying off the debt on re-development that Miles would need to operate at Huron Hills. The exact amount the city receives depends upon the interest rate the city pays to borrow the money.
Comparing proposals, there is a $6 million difference between the Miles proposal versus the city continuing to operate Huron Hills as an 18-hole golf course. Over the 20-year period, the Miles proposal pays the city $1 million; continuing to operate it as an 18-hole golf course costs the city $5 million.
There is some question why the Miles of Golf proposal has the city, and not Miles of Golf, investing $3 million into the re-development of Huron Hills. The reason the city needs to make the investment is that the city will own the land and own the buildings. Because of this, it is almost impossible for Miles to finance the project. Miles is investing $250,000 upfront and is paying off the city’s entire investment including the interest so at the end of the 20-year agreement, the city owns the buildings and improvements free of any debt. For Miles to fund the re-development would be like you going to a bank trying to get a mortgage on a new house when you won’t, in fact, own the house or the land it is on.
The Huron Hills Golf Course sits on 116 acres of land.
File photo
It is also pretty clear from our experience at Carpenter and Packard that combining the Huron Hills golf course (9 holes) with a practice facility, teaching academy, and pro-shop will be something just about every golfer in the community would use and enjoy.
The Miles proposal also leaves land available for other uses such as community gardens and certainly winter sports activities. There would be no high perimeter fencing, pole lighting, domes, or topography changes. Any buildings erected would ultimately be approved by the city. Huron Hills would look very similar to the way it looks today, and we think we can make it even more beautiful than it is.
If the city chooses to enter into a partnership with Miles of Golf to re-make Huron Hills into a new golf experience, it would be a spectacular new golf center and allow the city to redirect $6 million into the city’s parks, or fire department, or police department, or something else.
Miles of Golf is committed to being a good partner to the city, a good neighbor to people living around Huron Hills, and to offer a great facility for golfers in our community.
Chris Mile is president of Miles of Golf, which operates a golf shop, teaching academy and driving range in Pittsfield Township.
Comments
lou glorie
Mon, Dec 20, 2010 : 11:09 p.m.
Huron Hills is not losing money, but if it were, the solution would be to suspend golf and let it go back to nature or find some other recreational use. The imperative to privatize this city park is ideological. Also, we, the voters of this city thought we were protecting parks from this kind of pillage when we passed the charter amendment forbidding sales of parks without voter approval. This is a constructive sale--change of rights of use, so the city is violating this provision in the charter as it was understood by the voters. But, our crafty mayor and council made sure the amendment only mentioned "sale" rather than the more protective "lease, gifting, sale or transfer of rights of use". This demonstrates the depth of their cynicism and bad faith.
PJS
Mon, Dec 20, 2010 : 8:30 p.m.
MOG offers to pay $1M over 20 years... that's $50K/yr?!... my guess is that's much less than the current property taxes on the Carpenter Road property, for land that is infinitely more valuable. The city needs to recognize that HH is either parkland (which comes with some cost, whether operated as a golf course or not), or it is to be commercialized. If it is to be commercialized, stop the charade of a 20-year lease that slow-boils the change, and get the real value for this land - many millions of dollars if not limited to use as a driving range. Oh, but that's right, voters would have to buy into a park sale! No wonder we have to go for the pre-negotiated back-room deal instead. MOG doesn't need to be subsidized with tax-free property. $50K per year doesn't even come close to offsetting the overhead for retirees and other city costs that actually create most of the book loss at HH - and don't go away if the course doesn't generate revenue. So I see this proposal not as a $6M swing over 20 years, but something much smaller - Mr. Mile is ignoring the fixed burdens the city would still bear, just no longer booked against HH.
Stephen Landes
Mon, Dec 20, 2010 : 9:34 a.m.
If the Miles of Golf proposal was being made in the city of Detroit I would suspect money passing under the table to someone -- why else give a business such a sweet deal which none of their competitors can touch? Maybe AnnArbor.com should put on its investigative reporting hat and start digging. On the commentary itself: There is no city subsidy to Huron Hills. The $250,000 "loss" is largely due to the city allocating overhead to its two golf courses which it does not similarly allocate to other recreational facilities. The city then pays this overhead. That says more about the silly management practices in Ann Arbor than it does about the financial stability of Huron Hills. Miles of Golf would return a million dollars to the City over 20 years -- maybe. That comes to $50k per year. A non-profit running Huron Hills could hold annual bake sales that could achieve almost as much with a lot less upset to this community and its parkland. Seriously, a non-profit that could attract bequests and donations could likely do far better than $50k per year. This proposal establishes a destructive precedent for parkland and even for the greenbelt lands outside the city. Once we go down the road of arranging long-term leases with commercial operators there is no land that is safe from this kind of abuse. Every city park in Ann Arbor will be a potential commercial operation. Why not write a similar lease for an ice cream stand, bicycle rental, or other commercial enterprise in any city park? The purpose of parkland in our city is not to provide a home for commercial operators, but to assure green space for residents and visitors -- period. A golf course is largely just that: green space with very limited structures (not much more than the lavatories and service buildings on other major parks). I don't play golf and I don't live next to Huron Hills -- it isn't my golf course or my backyard. However, I drive through the area nearly every day and I walk at Gallup Park. My choice as a taxpaying resident is to continue to see GREEN when I am near Huron Hills. I also drive past the current Miles of Golf operation on Carpenter Road and I would not want to see that blight on the landscape or anything like it along Huron Parkway. I think we can tell a lot about what someone will do with what they get by looking at what they have done what what they have. In this case I look at the existing Miles of Golf operation and see that they don't seem to care about what they have -- it looks awful. They can say, well, we don't own the land and our lease runs out in 20 years. The situation won't be any different if they are at Huron Hills: they won't own the land and the agreement as far as I can tell is for 20 years. When it comes right down to it the City of Ann Arbor carries all the burden and Miles of Golf gets all the benefit. If we don't like the way they run Huron Hills we will still be stuck with $3 million in bonds to pay, a building we don't want, and trying to find someone to operate it all at the smallest loss we can hope for. The Ann Arbor community is telling Miles of Golf "No". If they persist in pushing this destructive proposal I hope my golf-playing friends will tell Chris Mile "No" in a more concrete way: stop patronizing his store.
Rita Mitchell
Sun, Dec 19, 2010 : 10:32 p.m.
Yes, consider your favorite parks in town. Will you be able to use them in the future, given the kinds of deals under proposal for Huron Hills and Fuller Park? What will protect your favorite park from becoming a parking structure or from being leased to a private business? We voted in 2008 to have a ballot referendum on sale of park land. For the city to use leases and legal agreements to avoid the technicality of a sale is an affront to the 80% of voters who voted to have a say on the sale of park land. Protect our parks and reject both proposals.
George Gaston
Sun, Dec 19, 2010 : 8:46 p.m.
According to the official city of Ann Arbor website, there are 157 parks within our city. Two of these parks are currently being considered for development. This is occuring despite the overwhelming support, two years ago, of a measure requiring a public vote before the sale of city park property. If this transfer of park land is allowed to take place, then there will be no protection from development for our remaining Ann Arbor parks. Our public parks are low hanging fruit for developers. Their locations and availability make them ideal sites for uses that the private/nonprofit sector would not be able to accomplish without the gifting of our public park land. If this is what we want to do with our city parks, then fine, let's go ahead and put all of our parks up for development proposal and see what higher and better uses they can be put to; but please realize that once our city parks are given up for development, they will be gone forever.
charles mancherian
Sun, Dec 19, 2010 : 7:06 p.m.
You've got to be kidding me! The City's going to put up $3M of our money to finance a private driving range? And Let's see, the city has us paying taxes to preserve open space in the Townships of all things, and then they want to turn around and destroy one of the city's most beautiful open space vistas along the Huron River? Our Mayor and City Council are jilting us taxpayers. Shame on them!
NHolmes
Sun, Dec 19, 2010 : 4:36 p.m.
What about option 4? I suggest the city convert the course to 9 holes with a driving range on the east side, make holes 8 and 9 year-round parkland, and invite businesses to tender for the chance to run the shop, (currently rather under utilized,) driving range and remaining 9 hole course. This would be for a relatively brief term perhaps three years and with strict quality criteria. The winning bid would be the one that best met the dual criteria of a good financial return to the city and maintaining a public amenity for the residents. This wouldnt be privatization but a public-private partnership. It would be up to winner to figure out how to manage costs and maximize revenue within a framework established by the city. There would be no irreversible changes and no long-term commitment. Golfers would still get to play, the hills would be available for sledding, development would be prevented and the city would reap the benefit of private enterprise
burlington
Sun, Dec 19, 2010 : 2:03 p.m.
Treetowncartel, you won't be able to cross country ski on the flat front seven unless you want to dodge golf balls. Miles of Golf's current driving range is open year round with covered, heated tee boxes.
Speechless
Sun, Dec 19, 2010 : 1:57 p.m.
We're supposed to fork over a $3 million public subsidy for a private contractor at Huron Hills in order to resolve financial "losses" on operations, which were created through convenient application of an accounting trick?
AnnArBo
Sun, Dec 19, 2010 : 1:14 p.m.
I've got to chuckle over this one. A private business wants the city to build it, then let the private entity run it guaranteeing a profit and a pay back to the city. Where can I go to pitch a proposal that will let the city build a facility for my business, I'm sure I can promise the same rosy outlook regardless of the current economy.
treetowncartel
Sun, Dec 19, 2010 : 12:33 p.m.
Will cross country skiing and sledding stll be allowed to the same extent that it is currently?
Townie
Sun, Dec 19, 2010 : 9:08 a.m.
Funny how the city has $1.2 million to give to the wealthy University for a parking structure that will benefit the University. I guess a subsidy for the university is OK, but one for a city park isn't. Oh, and the mayor receives a teaching stipend from the university and his wife works for the university? If one looks at the finances of the golf course and removes the quite outlandish IT costs and 'administrative overhead' (city hall) the golf course is in the black.
SonnyDog09
Sun, Dec 19, 2010 : 9:08 a.m.
Regarding Option 3: I don't understand how ending the golf operations at Huron Hills can be more expensive than continuing to operate the facility as a golf course. Once you have torn down the buildings, how much can it cost to operate as an honest to goodness park and how on earth can that cost more than maintaining a golf course?
Chip Reed
Sun, Dec 19, 2010 : 7:41 a.m.
This seems like a pretty good deal. At least, compared to letting the U-M build their parking structure on the site of the 4th hole of the old course (the erstwhile "Rockpile"). Are there any golfers out there that don't like what Miles of Golf has done in the community (although I still miss Pat's Par 3)? Let's go back to fussing over Argo Dam.