Source: The Capital (Annapolis, Md.)
The county could make a profit by taking over the beleaguered Compass Pointe Golf Course, but only if it's completed by June, according to a report released yesterday.
David Nissenson, principal of the Washington-based consulting firm Economics Research Associates, said the key indicator of potential success is the wealth of people who live within a 45-minute drive of the course.
The average income of households within 15 minutes of the course is $77,751, the draft report said.
The surrounding area also has a high proportion of households earning more than $100,000, and an increasing population of people well-established in their careers who can afford to spend their time teeing off.
"The national statistics are the more income you have, the more you tend to play golf," Mr. Nissenson said.
The county commissioned the $19,000 study as officials consider whether to take over the facility from the Maryland Economic Development Corp.
The report released yesterday notes that Compass Pointe faces no competition offering greens fees ranging from $50 to $79. The course will, however, have to compete with seven comparable 18-hole golf courses 45 minutes away or closer.
The consultant recommends offering two rate structures to draw golfers from other courses.
Construction at the course, which has completed 27 of 36 holes, has been delayed several times and the council in June approved a $1.1 million interest-free loan to cover cost overruns.
Net revenues are projected to grow from $745,000 this year to nearly $2.1 million in the fourth year of operation, the first time the course would reach its goal of 81,000 rounds of golf played, according to the report.
The council has two options:
It can take over operation of the course and issue about $26 million in debt, including $4 million to finish the remaining holes and fix other problems.
Or it could allow MEDCO to float its own debt of about $4 million and continue operating the course until the county takes it over in three decades.
Council Chairman Ron Dillon Jr., R-Pasadena, said the big question is whether paying for Compass Pointe will take away money for other projects, like roads and schools.
"The jury's still out ..." Mr. Dillon said. "We need to find out from the financial people whether the takeover would affect our bond capacity."
County Budget Officer John Hammond said unlike collecting lease payments as a landlord, a takeover would allow the county to monitor the course and reap all of the profits.
"The profits from the golf course will go to the county, and the interest cost will be reduced," he told council members at a work session yesterday in Annapolis.
Despite assurances from county officials that the $17.6-million course wouldn't cost taxpayers a penny, the tab is now at more than $3 million.
The report details another $4 million in "outstanding items," including a scaled-down clubhouse and parking lot, abandoned plans to build a food and drink stand on the course, narrower cart paths, an unfinished maintenance building, an uncovered cart barn, drainage problems and a scaled-back irrigation system.
Councilman Barbara D. Samorajczyk, a frequent critic of the handling of the course, said she won't approve any bill regarding Compass Pointe until she knows exactly how much it would cost to complete.
"Right now, we don't have all the information," the Annapolis Roads Democrat said last night. "We don't have any independent, firm numbers on the cost to complete."