Phoenix's restoration of Papago Golf Course is out of bounds - Ahwatukee Foothills News: Opinion

Phoenix's restoration of Papago Golf Course is out of bounds

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Posted: Friday, July 8, 2011 2:00 pm

We have all read extensive coverage about the Fiesta Bowl, city of Phoenix's budget and food tax issues, and the city's procurement policies related to Phoenix Sky Harbor Airport food concession contract awards.

What these issues all seem to have in common is an unbridled hubris and a sense of entitlement/superiority on the part of public officials and/or private non-profit board members, coupled with processes that eventually prove to be far less than open and transparent, self serving and lacking in integrity, highly unprofessional (despite claims to the contrary), and end results that are clearly not in the best interests of the public.

Perhaps most distressing is when these events inevitably implode or get exposed to a "light of day" review, are the all-too-predictable efforts of those involved to either maintain a low profile on the issue, or feebly spin some disingenuous angle to the story.

One less-covered story that is a microcosm of all these failings is what has happened during the Arizona Golf Association/Foundation's (AGA/F) "restoration" of the Papago Golf Course, which is just the latest in this local string of predictable and avoidable travesties.

After only three years, the city of Phoenix recently (and very quietly) agreed to allow the AGA/F to simply withdraw from its Papago management contract obligations, without any further financial consequences despite the facts that:

• The outcome of the restoration is far less than what was proposed or promised by the AGA/F, as witnessed by an en masse exodus to the tune of $750,000-plus per year by the course's former regular customers.

• Overall financial performance at the course has declined by over 40 percent as compared to the proposed 120 percent increase.

• Proposed course improvements for re-vegetation, cart paths, a clubhouse/pro shop structure and other on-course improvements remain both largely uncompleted and, more importantly, unfunded for the foreseeable future.

In late 2007 over the strong objections of Papago's true stakeholders, the city of Phoenix awarded a 25-year contract for restoration and management of Papago Golf Course to a subsidiary of the Arizona Golf Association.

Despite the fact that a private philanthropist had proposed to donate $7 million toward the renovation and that two other private organizations had each proposed to make more than $6 million in capital investment infusions, the city of Phoenix evaluation team, which was led by the city's auditor, chose the proposal of the AGA, which only proposed a $500,000 capital investment, and relied almost entirely upon $12 million-plus in debt financing via Phoenix Industrial Development Authority Industrial Revenue Bonds.

Informed citizens and respected local industry experts pointed out on numerous occasions to the foundation and city leadership that the foundation's proposal was dangerously undercapitalized and that their revenue projections (a 120 percent increase in the first year of operation) were an impossibility, defying all industry logic.

Additionally, their proposal contained conflicting or amateurish representations on previous golf course management experience, plans for the clubhouse/pro shop building, paved cart paths, distribution of tee times, start-up funding, and even the name they planned to call the course.

Their most notable omission was that despite clear request-for-proposal instructions to the contrary, the foundation failed to include its past golf course management experience at Villa Monterey in Scottsdale, a true economic and ecological debacle. This nine-hole executive course was "donated" to the foundation and collapsed in similar timing and fashion to what has now again happened at Papago, eventually requiring Scottsdale to pay over $3 million to remediate the course back to simple open space.

So much for protecting the integrity of the game, by these "stewards of Arizona amateur golf."

In less than three years following a $10-plus-million restoration, the leadership and management of the foundation and their handpicked operations manager "The Golf Guys" (for whom we can't find any record of a competitive bid process) have delivered the following results:

• Annual rounds played declined from a pre-project 61,000 in 2006-07 to about 30,000 rounds today.

• Annual golf revenues declined from a pre-project $2 million to $1.2 million. The foundation's proposal absurdly projected first-year post-restoration revenues of $4.4 million.

• Year to date current spending per round is $36.07 vs. the wildly overly-optimistic $88 projection contained in the foundation's proposal.

• Debt at Papago has increased from 0 to $9 million-plus.

• There is no clubhouse, only a trailer.

• Despite repeated claims that no taxpayer funds would be used at Papago, the city has had to contribute at the very least $250,000 toward operation of the course, plus untold legal fees, and a still-to-be-determined amount for completion of required course improvements and ongoing operational deficits.

Perhaps most distressing about the foundation's recently aborted stewardship at Papago is that no one from its staff, board or committee of past presidents has apologized for their poor performance, much less suggested that the AGA will make a sincere effort to assist in the funding of a new clubhouse.

Finally, please don't listen to the excuse that Papago's demise was entirely or mainly a function of the Arizona housing bubble collapse:

• The final decision/approvals for the project weren't made until March 2008 when the Arizona real estate market was in full free fall. And, yet, no one thought to re-examine the economics of the project.

• While combined year over year results for fiscal year 2009-10 at the other city of Phoenix courses was down by 4.9 percent, year to date for 2010-11 results are actually up by 3 percent. At Papago ,performance under the leadership of the AGF and the Golf Guys, for the same time frames are a pathetic 28.3 percent decline for 2009-10 and another 21.4 percent decline for 2010-11.

In short, the local municipal golfer has clearly voted with their wallets about the aesthetic outcome, customer service, and overall value of the outcome of the Papago restoration.

This is what should happen next:

• Conduct a complete financial audit with full public review and comment of all construction and operational expenditures during the foundation's management.

• The city of Phoenix (with the help of true Papago stakeholders and real local industry professionals) should immediately create and publish both short- and long-term business plans for the rescue of Papago.

• Remove the Golf Guys as operations managers, and replace them with city golf enterprise staff on an interim basis.

• Get pricing back in line with the true value of Papago's current conditions, which today should be comparable to pricing at Dobson and other city courses.

• Repeatedly approach the "Lost Papago Regulars" in an effort to re-capture their $750,000 in annualized lost business.

• Conduct an open request-for-proposal process for the next operator, and seek and listen to valuable input from the true Papago stakeholders before making a final decision.

Based upon results to date, unless this type of open and transparent approach is taken by the city of Phoenix, I'm afraid they'll make another poor set of insider decisions that may doom this venerable course that once hosted a United States Golf Association major amateur event, multiple Phoenix Open qualifiers, and 100,000 fun and challenging rounds per year for local municipal golfers, once and for all.

• Ahwatukee Foothills resident Larry McLennan is a former member at Papago Golf Course and co-founder of "Save Papago Golf!"

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