Acquire the Assets and Lease it Back to OGC
Unfortunately, the wider community has been given virtually no information about the financial problems which the OGC faces. Conflicting information has been spread. Some say that the golf OGC is doing well enough, but lost money this year and last as a result of the fires and smoke filled air that reduced the number of players. More recently there have been rumors that bankruptcy is imminent and that immediate action must be taken by OVA.
Without financial data it is difficult to formulate a solution. How much could the OGC save if the East Course were closed and minimally maintained with grass cleared by a herd of sheep annually? We don’t know.
How much much could the OGC obtain through a membership drive offering low cost, voluntary “supporting memberships” to those who value the golf course most? Many of the hundreds of home owners who live adjacent to the golf course might be eager to provide some support to maintain their view of well manicured greens. Golfers, even those who live outside of Oakmont, who enjoy playing the East Course might be willing to become “supporting members” to keep both courses open. We don’t know how popular low cost “supporting memberships” would be because the OGC has not yet launched non golfing membership campaign.
The latest rumor is that bankruptcy is imminent, and that OVA must take immediate action. A suggestion was made that OVA buy the Quail Inn and both golf courses in return for taking over payments on the OGC’s loan. Or OVA might take out a new loan and pay off the OGCs existing loan.
OVA could then lease back the Quail Inn and West Course to the OGC for a nominal fee, perhaps a dollar a month? This would allow the OGC to remain as a separate, for profit corporation open to the general public. All profit obtained by the OGC should be invested in repairs to the facilities and keeping player fees low.
OVA would then be responsible for providing minimal maintenance for the East Course. The streets and roads of the East Course would become immediately available to the OVA membership for walking and running. Long range plans might include a dog park, a tot lot, a par course, basketball courts, an indoor swimming pool and a newer and larger auditorium. A master plan could be developed and new facilities built over time as allowed by financial constraints.
An alternative would be for OVA to lease back both golf courses to the OGC for a period of years enabling the OGC to do a trial run of voluntary low cost, non golfing memberships. If there were sufficient support in the community, both golf courses could remain open.
Could OVA make these loan payments without triggering a Davis Stirling requirement for a vote of the membership? Perhaps. I believe many Oakmont residents would prefer the OGC land remain under OVA control, rather than being sold, perhaps to a developer, in bankruptcy court.
If bankruptcy is imminent there is little point in forming yet another committee. It’s time for the OVA BOD to make a decision. If their decision requires a vote of the membership, then now is the time for a vote.
As I recall, the sheep costs $1,000/acre for a single “mowing” so the cost for using them on the east course would not be insignificant. I would make continued mowing at some reduced frequency part of the lease terms, unless/until OVA had other plans for it.
IMO, a “dollar per month” rental charge to OGC of OVA-owned land won’t stand. Such a sham transaction would clearly violate OVA BD’s fiduciary duties and it would place OVA’s tax-exempt status at risk. BD is not authorize to ‘give away’ leasehold rights to major OVA assets to such a non-OVA, open to the public, for-profit business like the private Golf Club
The monthly lease charge to OGC must be justifiable in view of the specific terms of the lease contract and in view of present market rates for comparable properties.
Whatever the monthly lease rate, OGC’s factual history indicates that OGC is likely to default on rental payments and/or other lease conditions.
It’s extremely difficult and expensive to evict a deadbeat tenant, as OVA will discover. Worse, OVA may end up just having wasted millions of the community’s funds on some buy-leaseback deal involving the Golf Clubb and yet the Oakmont community would continue to be forced to deal with and bailout this privately-owned business. The Golf Club’s behavior, IMO, might ‘qualify’ it for the “Neighbor From He–” television series.