With Compass Pointe Golf Course in Pasadena hemorrhaging cash and facing criticism that taxpayers may have to cover future debt, county political leaders are considering taking over operation of the unfinished facility from a state agency.
Officials arranged a meeting for this afternoon after the county auditor determined that more than $3 million in public funds has been flowing into the golf course over the last four years.
That's in addition to a $1.1 million interest-free loan approved three months ago to cover shortfalls caused by bad weather delaying the course's opening.
Councilman Barbara D. Samorajczyk, D-Annapolis Roads, said county officials failed to disclose the spending County Auditor Theresa Sutherland had documented.
"Taxpayers didn't even get a chance," she said. "They didn't know what was going on."
County Council Chairman Ed Middlebrooks said a takeover will be a possibility discussed at the meeting in Annapolis with County Executive Janet S. Owens and Council Vice President Ron Dillon Jr., R-Pasadena.
"I think that's certainly the card that's on the table," said Mr. Middlebrooks, R-Severn.
Officials at the Maryland Economic Development Corp. - the quasi-public state agency that financed the project and leases the golf course from the county - said the course should be finished by next spring.
As long as that happens, county Budget Officer John Hammond said MEDCO will likely remain in charge of the project.
"There are a couple of rough spots there, but at the end of the day this is a financially viable project," he said.
But MEDCO Executive Director Bob Brennan said this morning he would not block any takeover.
"If the county wanted to take it over, that's fine," he said. "They invited MEDCO to come in and operate it for them, and we respond to requests from local governments."Money matters
MEDCO is in the middle of a $3.6 million contract dispute with the main landscaper on the project, but Mr. Brennan said any outstanding construction costs will not prompt another request for money from the county.
"My belief is that if we get this course opened and the bonds restructured and we have good operating conditions, we show on projections that there would not be a need to make another call for operating and maintenance funds," he said this morning.
In an interview yesterday, Mrs. Sutherland said MEDCO could ask for an additional loan from the county, and that contract language signed by Ms. Owens' administration ultimately makes the county responsible if the $17 million project fails.
"The county is at risk," Mrs. Sutherland said.
Mrs. Sutherland has been reviewing the contracts signed by the county for three months, since the council reluctantly approved the bailout loan with no guarantees it would be repaid.
Ms. Samorajczyk introduced resolutions last night calling for an audit of the Compass Pointe and Eisenhower golf courses and hiring an outside law firm to review the contracts. Eisenhower is the county's other public golf course in Crownsville.Long time coming
The first 18 holes of Compass Point opened in October, after months of delays due to bad weather and two decades of planning.
The county bought 160 acres of the site for $1.75 million in 1991, with the help of $777,000 in state aid.
Ms. Owens put the finishing touches on the contract with MEDCO in 2001.
About a year earlier, Dennis Callahan, director of the county Department of Recreation and Parks, told the council that the county was getting "a $17 million golf course without one cent of taxpayers' money."
But Ms. Samorajczyk said that statement gave the council the impression that the county wouldn't spend anything.
Instead, she said, money was spent for the golf course that could have been used for other things.
Mr. Hammond said the spending came from user fees and an admissions and amusement tax, not taxpayers.
As part of the agreement, the county provided the golf course land for free to get a second public course. The developers built the houses, and MEDCO floated tax-exempt junk bonds to pay for construction of 36 holes.
MEDCO holds a lease on the property for 30 years, and will pay a portion of profits to the county each year.
After the lease expires, the county pockets any profit the course makes. The county will also end up with 734 acres of protected open space, Parks Administrator Tom Donlin said.
But council members have complained that the structure of the deal changed over time without any legislative review.
The Owens administration signed 17 changes to the contracts, including one that says if an operating reserve account drops too low the county executive would be required to ask the council to make up the difference.
"All of this was done without the light of day," Ms. Samorajczyk said.
The deal, however, is not unique to Anne Arundel. Calvert County signed a similar deal for the Chesapeake Hills Golf Course in Lusby, and has approved $216,412 in the last year to cover losses.
David F. Hale, president of the Calvert County Board of Commissioners, said the county had to agree to the contract clause to protect open space.
Calvert officials were faced with a choice, Mr. Hale said.
"Either let the private course go on the market as a land sale, or try to string some financial package together that would save the golf course."Brighter future?
Compass Pointe and the surrounding neighborhoods are still under construction.
County officials say the tandem will bring property tax receipts and golfers when finished.
About 56 of 102 homes are still under construction or on the market at the Landover-based Washington Homes community on one side of the course.
Most of the 68 houses built by Grayson Homes of Ellicott City on the other side have been sold. Prices ranged from $600,000 to more than $1 million.
In exchange for providing hundreds of acres of open space, developers where allowed to build more lots than zoning allows. The county also waived $162,330 in grading permit fees and paid $521,746 for access to the site.
Those homes will bring in at least $800,000 in tax revenue each year, Mr. Hammond said.
Tracy and Chris Mills just bought their house on the course last month for $765,000. They had the trees cleared for a better view of a pond, and Mr. Mills has already purchased a set of golf clubs for the couple's 2-month-old son, Austin.
Mr. Mills, owner of a nearby Subway restaurant, plays about every two weeks. He has played since age 3.
"It has been his lifelong dream to live on a golf course," Mrs. Mills said.
Many of her neighbors have golf carts in their garages
The third nine-hole section of the golf course opened two months ago, complete with 12 bunkers and water hazards.
"The golf product at the end of the day is going to be premium, and will do extremely well," Mr. Brennan said.
The new holes opened in July add a third option for golfers on the expansive course that has received rave reviews.
Jim Flynn, editor of the golf magazine Pros N' Hackers, said Compass Pointe is attractive to golfers for its wealth of playing options.
"What you want are holes where you use all the clubs in your bag, holes where you use all kinds of shots," Mr. Flynn said.
---
The county owns the 734-acre Compass Point Golf Course in Pasadena. In exchange for hundreds of acres of open space, developers were granted permission to build 170 luxury homes on the course.
The Maryland Economic Development Corp. holds the lease on the course, and pays a management company to run it.
The county gets a portion of the profits, and will keep all of the profits when the lease runs out in 30 years. Here is a breakdown of county funds going to the course:
Revenues from Eisenhower Golf Course: $838,000.
Admission and amusement tax revenue (paid and budgeted): $544,388.
County loan: $1,123,900.
Grading permit fees waived: $162,330.
Road improvements: $521,746.
Purchase of lots on Belhaven Road: $12,290.
Original land purchase (not including state aid): $973,000.
Total: $4,175,654.
Source: The Capital (Annapolis, Md.)