Source: Duluth News-Tribune (Minnesota)
A tentative agreement for the management of the Nemadji Golf Course has been reached.
The Superior City Council reviewed the proposal Tuesday night. The council will consider adopting the five-year lease agreement after a Dec. 7 public hearing.
The agreement's goal is to place management in the private sector so taxpayers don't end up subsidizing golf for those who use the course. Flat revenue and increasing costs have created deficits in recent years.
Money earned by the city would be used to reduce the deficit and pay off debt incurred to make golf-course improvements, said Jean Vito, the city's finance director.
Under the proposal, current managers Mark Carlson and Steve Flagstad, operating as Nemadji Public Golf Course Inc., would lease the course for whichever is the greater amount -- a $140,000 minimum annual payment or 10 percent of the gross revenue generated. The percent of gross revenue the city could collect would increase by 0.5 percent annually over the life of the agreement.
In the first two years of the agreement, $31,000 annually would come from an existing contract for concession operations at the Club House.
At the end of the Club House agreement in 2006, Public Works director Jeff Vito said, Carlson could choose to extend that agreement or find another option for the Club House. The golf course management would be responsible for the full lease payments, regardless of which route they take, he said.
It's cleaner to roll the management into one agreement, Councilor Kevin Norbie said.
The lease payments to the city are not weather-dependent, Vito said. But the better the golf course does financially, the better the city does.
The proposed contract also outlines payments to be made for improvements and maintenance of the golf course facilities and establishes lease payments for city-owned equipment.
But the proposed contract raised some concerns.
Councilor Ed Anderson questioned the wisdom of locking the managers into a contract that prohibits membership fees and requires advance notice of rate changes.
Vito said terms of the agreement are to ensure the public course remains open to the public because a number of concerns have been expressed about the course becoming a private club.
It's a risk Carlson and Flagstad are willing to take, said Steve Bick, the attorney who represented them.
Councilor Jackie Stenberg said that when the idea of leasing the golf course was proposed, she consulted with an independent golf club to learn what to expect. She said the agreement between the city and Carlson and Flagstad is in line with what she heard from a different party.
"I have total confidence in Mark and Steve," Councilor Dan O'Neill said. "This will be a windfall for taxpayers eventually."
