Golf course operator discusses smaller fee

Dan Kulin

Monday, Nov. 24, 2003 | 8:57 a.m.

The private company running Boulder City's financially troubled Boulder Creek Golf Club offered to cut $125,000 from its $650,000 annual management fee in return for several city concessions, City Councilman Roger Tobler said Friday.

But Tobler and City Attorney Dave Olsen said the concessions requested were so unacceptable that the offer has been taken back by course operator Triad Golf Management.

Triad President Scott Jones, also general manager at the course, and Tobler said they consider the unsuccessful offer a starting point for negotiations about reducing Triad's management fee.

Jones and Tobler said it is important that Triad decrease the management fee to show city residents that Triad is willing to take some of the brunt of the financial losses at the course and to ease the financial drain the course is on the city.

The course opened in January to projections it would turn a profit in as soon as six months, but instead the course has lost about $3 million in operating expenses, depreciation, plus interest on the $22 million borrowed to build the course. The course continues running monthly operating losses, and in October the course posted an operating deficit of about $128,000, Tobler said.

Last month the council was presented with $1.2 million in city budget changes to cover debt payments and operating shortfalls.

"This golf course is their business plan, and it's not working," Tobler said. "Why should we be the only ones suffering?"

Jones said the offer to reduce the management fee is more than symbolic.

"It's entirely necessary to show our continued seriousness to lower costs and maintain the course," Jones said.

Jones would not discuss the specific concessions requested in Triad's offer. Triad has a 10-year contract to run the course.

Olsen said the offer asked the council for a two-year waiver of a $60,000-a-year lease payment for land where Triad is planning to build a par 3 course; to eliminate a contractual obligation to begin construction of the par 3 course; and to reduce the number of hours Triad partners are required to spend at Boulder Creek from 24 hours a week to 36 hours a month.

Olsen said that when taking into account the value of the concessions, he didn't see the offer as one that would truly lessen the management fee.

"It's just shifting dollars from the management fee to other agreements," Olsen said.

Tobler said he was also unhappy that the offer called for the city to pay Triad about $51,000, which represents the current balance due on the management fee.

"But I say forget it. We're all losing," Tobler said.

Tobler said he thinks a new fee arrangement should wait until after an independent audit of the golf course is completed.