Another potential buyer has walked away from Club West Golf Course, but owner Wilson Gee said there’s a slender hope that he might have it ready for play this coming season.
And in both cases, the cost of city potable water looms large.
The buyer, whose identity was not disclosed, reached the end of a due diligence period last week but opted not to close the $850,000 deal on the beleaguered course.
It has been barren desert since spring 2018 after the city shut off water service over previous owner Richard Breuninger’s failure to pay $160,000 in delinquent bills.
“Same concerns — water,” Gee told AFN as the reason the potential buyer became the second in four months to walk away.
A foursome of local businessmen who were interested in buying the course several months ago bailed out after completing their due diligence inspection of the course, claiming that it was worth only $450,000 because of the extensive infrastructure work needed to make the course playable.
Gee said there is still a possibility that he may be able to save the day in time for seeding that would make the course playable before the end of the year.
“There’s a 50-50 chance we might be able to open the course,” he said, saying he had the possibility of cheaper water. “It may be doable.”
“There are a lot of moving parts and I’m doing the financials right now,” he said, declining to provide specifics except to say “it doesn’t involve well water.”
Cheap water has been an issued for the course since about 2015, when the Phoenix Water Services Department abruptly terminated an agreement that would have given Gee a somewhat cheaper rate on potable water for another year or two.
That agreement was put in place after the city backed out of a deal Phoenix signed in the mid 1980s with the former Del Webb Development Company, when it was building Club West, to provide reclaimed water from a plant that the developer would build.
After 12 years, the city demolished the plant, citing high operating costs. But it never told Club West homeowners about the water-sourcing problems from 2002 to 2013, or that it was substituting more expensive potable water for reclaimed water for the golf course.
The water problem has only grown worse with the imposition of rate increases this year and next, Gee said, adding that the annual water bill for the course is rising from $700,000 to $850,000-$900,000.
The long-term solution to the water problem is still out there, though that is part of what Gee is figuring out.
Ahwatukee businessman Rande Leonard has drafted a plan to build a pipeline from the Gila River Indian Community, where he can draw on cheaper water through a complex water credit arrangement with SRP.
The pipeline would run beneath the South Mountain Freeway through concrete sleeves already installed by the Arizona Department of Transportation and eventually tied into an existing pipe that connects to Club West.
“Rande has done 90 percent of the technical work,” Gee said. “We still would need some easements from the City of Phoenix, but a lot of the pipeline planning is done.”
Still, it would cost between $750,000 and $1 million to build the pipeline. Putting up that money was part of the requirement for anyone buying the course.
As of Monday, Gee had not put the Club West course back on the block. He has put up the Ahwatukee Country Club at 48th Street and Warner Road up for sale at $3.2 million, hoping to find a boutique hotel developer willing to buy even part of that site.
“We’re regrouping” on Club West, Gee said. “We’re putting together a budget to see if we can reopen. But we need to solve the water issue. It doesn’t make sense to spend thousands of dollars reseeding unless we can get cheaper water. We’d get killed the first time out by the water bills. We’d be throwing money away on just one season”
Even with Leonard’s pipeline, he said, “we have to figure out if we can amortize the project cost.”
There may be other issues as well.
When Club West resident Jim Lindstrom mounted an elaborate and well-researched plan in late 2016 to have homeowners buy and operate the course, the professionals he hired noted that replacing the 30-year-old irrigation system alone would significantly cut water costs.
Those consultants also noted that xeriscaping some of the site would further reduce water costs. In all the consultants said it could cost more than $4 million in improvements.
Even if he doesn’t replace the irrigation system, Gee said additional work is needed before he could open.
He said hundreds of sprinkler heads had been broken off before he regained ownership of the course last fall after he foreclosed on the $1 million note Breuninger had signed in December 2017 to buy the course on behalf of his Inter Tribal Golf Association.
Breuninger had reseeded the course in the fall of 2017 and by late November it had been restored to a lush green.
But within less than four months, grass began giving way to dirt as the course dried up without water.
Gee said he would likely know within two weeks whether he can turn the course around this year.