Suit over golf course to be settled

Dan Kulin

Wednesday, Feb. 11, 2004 | 11:11 a.m.

Boulder City is close to settling a lawsuit with the company that built the Boulder Creek Golf Club, and is negotiating an end to the management contract with the group that runs the course, the City Council learned Tuesday.

Phoenix-based Wadsworth Golf Construction, which had a $12 million contract to build the course, is suing the city for $842,933 the city has withheld claiming the company left the course with, among other unfinished work, leaking lakes.

City Attorney Dave Olsen said the company and city have agreed to a settlement under which Wadsworth would fix the lakes and any other outstanding work in return for the city giving the company the final payment.

"A formal agreement is being prepared," Olsen said.

Olsen said he is also negotiating with Triad Golf Management, which runs the course for the city, to end its contract.

Triad is about 18 months into a 10-year management contract to run the course for $650,000 a year.

"We've made offers and counter offers," Olsen said about talks with Triad.

Olsen's remarks came after Tom Frost, a consultant for Triad, told the council that the course ran an operating deficit of about $2.2 million during its first 12 months open. That figure does not include the cost of depreciation or debt payments.

Frost said the course ran an operating loss of $50,000 in January, which city officials said is probably the lowest monthly loss for the course since it opened a year ago.

Frost also told the council on Tuesday that he is working to create a membership-type program for the course. Golfers would pay $189-a-month for special benefits such as reduced golf fees, guest passes, and free practice time.

Olsen said the city's negotiations with Triad do not include talks with a group of city investors who been negotiating with Triad hoping to take over the management contract.

Boulder Creek opened in January 2003 to glowing predictions of profits in its first six months, but instead has turned into a financial and political liability.

The losses at the course have been cited by by leaders of an effort to recall Mayor Bob Ferraro and Councilman Mike Pacini.

Many, led by Ferraro's political rival former Councilman Bill Smith say they believe Ferraro either knew or should have known the course was losing money before May. The mayor said he realized the true financial health of the course when the rest of the public did, during a presentation from an independent auditor a week before the June election.

The poor financial performance of the course also contributed to the council's recent ouster of City Manager John Sullard.