Hotel could be Boulder City’s ticket out of the rough

Monday, June 26, 2006 | 7:11 a.m.

Strapped for cash because a city golf course has lost millions of dollars, Boulder City officials want a hotel developer to help the city hack its way out of the financial rough.

To offset heavy losses on the Boulder Creek Golf Club, officials are considering leasing four acres east of the course's clubhouse to Hawthorn Suites Golf Resorts to build a 70-room hotel. The project would make a huge dent in the city's payments on the $22 million, 27-hole golf course, which opened nearly four years ago.

But not everyone in Boulder City embraces the idea. The Coalition to Save the Future of Boulder City views the city's pursuit of a long-term lease instead of selling the land as a scheme to skirt a city charter provision requiring voters' approval of any land sale of one acre or more. Leases, however, are exempt from that requirement.

"They are using leases to circumvent the will of the people," said Sherman Rattner, the coalition's co-founder.

"They are so desperate for money because of their gross mismanagement that they will make any deal to sell out the future of Boulder City. They go for any scheme that comes along."

If the Hawthorn Suites deal is approved, it is expected to generate an additional 6,000 rounds of golf a year, producing $500,000 annually in greens fees, merchandise and restaurant sales, city officials said. Boulder City also would receive lease revenue, to be determined by an appraisal.

Since the golf course opened in January 2003, Boulder Creek has not produced enough revenue to cover its operating expenses and annual payments on the $10 million in revenue bonds and an $8.7 million loan from the city's utility fund used to build the course.

The ongoing losses have forced the city to reduce its budget to cover the costs.

Boulder City officials estimate that, through the end of May, the course has lost $245,000 in fiscal 2006 - even after the city transferred $1.48 million to help pay its bills.

The hotel proposal, Mayor Robert Ferraro said, would provide financial help, "which the golf course desperately needs."

"It will help immensely, but it will not solve everything," Ferraro said.

This is not the first time that Boulder City has looked for outside help to solve its golf course's financial woes. In April 2005, the city rejected two offers to lease the course, proposals that would have netted the city no more than $250,000 a year.

And last June, city voters, for the second time in seven months, rejected a ballot measure to sell 46.5 acres on the northeast side of the golf course for a subdivision. That proposed sale, city officials said, could have fetched nearly $17 million, eliminating most of the golf course's debt.

California-based Hawthorn Suites, a Hyatt brand, which operates a golf resort hotel outside Atlanta, is eyeing several golf resorts around the country , said Morgan Burkett, the company's president.

Burkett, who will appear Tuesday before the Boulder City Council, said his company has long been attracted to the Las Vegas market because of its high occupancy rate and its quality golf. Boulder City is a perfect match for the company's plans, he added.

"Some people would rather stay in Boulder City and commute to Las Vegas so they are not in the thick of things," Burkett said. "It is a quiet setting, and it has beautiful views that go on forever."

To Rattner and others, however, the view of the proposed lease is considerably less beautiful.

Rattner suggested that the city close nine holes at Boulder Creek or shut down the city's older course, the Boulder City Golf Course, to save money. And if city officials do not like either of those options, they should at least be straight with voters by giving them a say on the development plan, he said.

Boulder City Manager Vicki Mayes, though, called it impractical for the city to place a ballot measure before voters whenever it wants to enter a long-term lease. In this case, the city could not put the issue before voters until June 2007, and developers are unwilling to wait that long for a green light, she said.

Through existing leases, Boulder City earns $2.1 million annually, more than 10 percent of its general fund revenues, Mayes said. The additional revenue generated by the hotel plan would enable the city to use its general fund money for wage increases and other projects, she added.

Boulder City took over Boulder Creek in March 2004 after it bought out the contract of Triad Golf Management, which managed it on the city's behalf at a loss of more than $2 million over the first year-plus of operation.

Although not calling the decision to build the course a mistake, Councilwoman Andrea Anderson said the city should have done more to reduce its $22 million price tag.

"If I had to do it over again, I wouldn't do it that way," Anderson said.

But the councilwoman said she likes the resort project.

"It would be a good addition to the golf course, and it can remedy the drain on the city's coffers," she said. "If we keep plugging away, we can get this turned around."