SOUTH HADLEY — Town officials have decided to enter contract negotiations with International Golf Maintenance for full management of the Ledges Golf Club.
In a 3-2 vote Tuesday, the Select Board chose to begin negotiations with the Florida company for a five-year contract that would see the town give up management of the golf course, which has been maintained by IGM since 2005. Chairman Ira Brezinsky, Jefferey Cyr and Bruce C. Forcier voted yes, while Andrea Miles and Sarah Etelman voted no.
“We outlined in a really long conversation the parameters we are looking for in terms of negotiations,” Brezinsky said of the meeting. “If IGM is able to work with us, that will allow us to move forward and have reasonable expectations of success for all parties.”
In February the Select Board hired Colliers Golf Advisory Services of Philadelphia to find a business partner to take over maintenance and management at Ledges in an attempt to mitigate the financial burden on the town. At the June 5 Select Board meeting, Allen DePuy, vice president of Colliers, delivered a report on the consultant firm’s analysis of bids by Billy Casper Golf of Virginia and International Golf Maintenance of Florida.
Thirty-seven firms had shown interest in the bidding process, but only two of those firms actually submitted proposals, which Brezinsky said “speaks volumes.”
IGM stated that it wants to keep its current maintenance contract with the town intact as part of a full management deal. That maintenance cost will be part of contract negotiations as the town looks to bring the price down.
According to Collier’s report, IGM’s management fee would amount to $72,000, which would include the cost of maintenance for the golf course.
IGM’s “aggressive and positive” projections would require until year three to achieve positive profitability, according to Collier’s report.
The board also wants to include language that would give the town the opportunity to exit the contract if revenue projections are not met by IGM, according to Brezinsky.
Additionally, “we want to see language in the contract specifically that provides additional recreational opportunities for women and children, golf or otherwise,” Brezinsky said.
The 244-acre Ledges Golf Club was funded entirely by a general obligation bond approved by a special Town Meeting in October 1997. It cost around $5.6 million to build.
The town pays $347,000 a year on the bond. It has another 10 years left to pay it off.
Operational losses have amounted to $8.5 million over 15 years. In 2014, losses were over $300,000, but in the past three years the losses have been reduced to less than $100,000.
As for this year Town Administrator Mike Sullivan said Wednesday the Ledges could actually see a slight surplus with up to $13,000 in revenue for the first time.
Brezinsky said he hopes to find a way to address taxpayers’ concerns as well as the best way forward for both sides of the negotiating table so that “IGM can be financially successful and for the town to sustain the facility.”
Select Board member Miles, however, has her concerns for the golf course.
“This has been a 19-year project so far and it has yet to yield any positive financial results for the town,” Miles said. “I feel in a small town with a budget like ours, it’s imperative to make wise financial decisions and at this point I do not think it’s a wise financial decision.”
Miles mentioned that at the June 5 Select Board meeting, DePuy of Colliers highlighted an important fact: the golf industry as a whole is on the decline. She said that the problem of a profitable golf course is not unique to South Hadley and the potential for a golf course to make money, let alone break even, are slim.
“As the contract stands right now, before any further negotiations, we would have to pay out for capital expenditures and losses,” she said. “I am not comfortable with that option. I feel like the Select Board has done what it said it would do in the fall of exploring the idea of a management company coming in, and if that is the best offer, I don’t feel comfortable moving forward.”
She said she has received 50 to 60 emails from residents concerned over the Ledges operational losses and said she has talked about it with constituents almost everywhere she goes.
“If we are taking taxpayer money and putting it into something we know is declining, I feel it is irresponsible when we know it could be going to health care, police, and education, areas that need consistent attention and are not dependent on marketing swings,” Miles said.
Select Board members hope to conclude contract negotiations in time for the July 10 meeting.
Luis Fieldman can be reached at lfieldman@gazettenet.com