Wednesday, Oct. 6, 2004 | 9:21 a.m.
The Henderson City Council on Tuesday cleared the way for residents to begin playing at the Wildhorse Golf Course in early November, approving a management contract with a firm to run the course, a special golf course budget with money for start-up costs and an interim lease that allows the city to use the golf course until a proposed land swap for the course is formally approved.
Meanwhile, a majority of council members said they think the proposed transaction, which goes before the council for final approval on Nov. 2, is a good deal that will give Henderson its first city-owned golf course.
The proposed transaction would have the city give Wildhorse Enterprises 126.5 acres of vacant land in two parcels, at Sunset Road and Arroyo Grande Boulevard and at Horizon Ridge Parkway and Gibson Road, appraised at $40.2 million. In exchange Wildhorse Enterprises would give the city the golf course at 2100 W. Warm Springs Road plus $5.8 million.
The firm PricewaterhouseCoopers appraised the 137.8-acre Wildhorse Golf Course at $34.4 million. Wildhorse Enterprises purchased the golf course in January for $9.35 million, according to Clark County Assessor's Office records.
Wildhorse Enterprises is a partnership of The Walters Group, headed by Las Vegas golf course owner Billy Walters, and American Nevada Co., which is owned by the Greenspun family, who are also publishers of the Las Vegas Sun.
The wide gap between the purchase price in January and appraised value of the golf course prompted Councilman Andy Hafen to ask that PricewaterhouseCoopers representatives attend the Nov. 2 council meeting, before the council takes its final vote, to explain how they determined the course was worth $34.4 million.
But others on the council, including the mayor, said they thought the proposed land swap was a good deal for the city, and any profit the private group will make is thanks to their good timing and willingness to take a risk on the property.
Wildhorse Enterprises has also spent millions improving the golf course, which added to its value, although a group representative wouldn't say exactly how much has been spent there.
"I think everything is a matter of timing, plus we don't have cash so we couldn't have bought the golf course ourselves," Mayor Jim Gibson said. "And we cannot pay more than the appraised value, so they took the risk."
Gibson also said that the deal does more than just get the city its own golf course, which has been a goal for years.
"The alternative was that the golf course would die and sit fallow in the heart of that neighborhood, and that was not a viable alternative," Gibson said.
John Rinaldi, manager of the city Office of Property Management and Redevelopment, said the development plans call for building approximately 570 homes on the 126 acres.
Councilman Jack Clark said, "Any controversy because somebody's making a profit, well the city's making a profit."
In 1999 the city paid roughly $90,000 an acre for a large parcel that included the 60 acres off Sunset and Arroyo Grande. The city purchased the other parcel from the federal government in 1969 for about $30,000.
Councilman Steven Kirk said that while some people might say the city should have purchased Wildhorse Golf Course last year, he wishes he could go back in time and purchase land all over Henderson.
What's important is the land now, he said.
"If that golf course dies, we have an unregulated sand lot and dirt pit with beautiful homes around it," Kirk said. "This is more about quality of life and saving a neighborhood."
Walters Group President Michael Luce said the reported sale price does not include what Wildhorse Enterprises paid for the equipment, such as golf carts, when it bought the course.
And although Luce would not say how much the group has spent to improve the course, he said it was in the millions of dollars, and includes at least $3 million spent on a new water line, which will connect the course to the city's reclaimed water system.
The appraisal of the golf course includes the value of all of the improvements, plus the equipment that will come with the course, Luce said, adding that the city will be handed a turnkey operation.
With the golf-course related items approved by 4-0 votes, the city can begin work at the course at any time, said John Rinaldi, manager of the city Office of Property Management and Redevelopment. with Councilwoman Amanda Cyphers was absent.
The lease with Wildhorse Enterprises has the city paying $1 a month for access to the golf course until the land swap is finalized.
The management contract with Henderson-based Wright Golf Management will pay the firm $100,000 a year. In addition, if the golf course meets 95 percent of its projected revenue, the firm will receive 25 percent of that money, Rinaldi said.
Firm owner Andy Wright said the golf course is expected to lose about $176,000 on operations through June 30, then turn a profit of $215,000 during the following 12 months. The city's contract with Wright is for three years, with an option for another three years.
Wright was general manager at the Desert Pines Club from July 1998 until he took over at the Stallion Mountain Country Club in January 2003, where he was for a year. Both golf clubs are operated by the Walters Group.
The council also established a Municipal Golf Course Enterprise Fund, which will keep golf course funds separate from general city funds. The golf course fund was established with $533,000, which is enough to cover the first two months of operations, Rinaldi said.
Rinaldi said the course, which has been closed since February, should open in November.
The top rate for Henderson residents will be $40, which will be charged during weekends in peak season, Clark County residents will be charged no more than $45 a round.
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