City drops plan to buy golf course

Sito Negron

Thursday, May 27, 2004 | 9:41 a.m.

Las Vegas officials and developer Billy Walters have decided not to pursue Walters' proposal to sell the Desert Pines Golf Course to the city for $22 million, citing high interest rates and two studies that say the deal would not make sense.

After seeing two reports commissioned by the city to study the proposal, City Manager Doug Selby said "it just doesn't look like it makes sense for the city to buy the golf course.

An April study, by Economics Research Associates, supported a February report by Hobbs, Ong and Associates Inc., which stated that the proposal "faces significant challenges in the financial marketplace."

Walters said that rising interest rates between the initial proposal in July and the completion of the studies changed the picture, and for now he doesn't see the idea working.

"If interest rates went down again obviously we'd be interested in going back and talking about this, if the city was interested," Walters said.

"This was going to create an opportunity that was good for us and good for the city. It gave us the opportunity to refinance the property, and at the same time it gave the city an opportunity to earn a substantial amount of money."

Last summer Walters proposed selling the course to the city. Under the plan, Walters would receive an annual management fee of $300,000, adjusted each year through the Consumer Price Index, to manage the course and share revenue with the city after operating and other costs were paid.

Las Vegas Councilman Gary Reese, whose ward includes Desert Pines, said the studies were enough to convince him.

"Why have a feasibility study if you're not going to abide by it?" said Reese. "The staff tends to agree (with the study), so unless there are extenuating circumstances that prove otherwise, we have to follow the staff recommendation."

The golf course, on Bonanza near Pecos in East Las Vegas, was a preserve of sorts called Nature Park until 1996, when the city entered into an agreement with Walters to develop and run the golf course. The city owns the land and leases it to Walters.

According the Hobbs, Ong study, Walters started paying rent to the city in 1998 of $25,000, a sum that increased each year until it reached $100,000 in 2003. The rent in 2004 is to be either $100,000 or 1.25 percent of gross revenue, whichever is greater.