Tom Walsh, who owns the hamburger chain’s restaurants in Sioux Falls, S.D., as well as other golf courses, has proposed that he lease the city-owned course in Brandon, S.D., with an option to buy.
A Sioux Falls, S.D. man with a longtime background in the hospitality industry has offered to lease – with a future option to buy –the city-owned golf course in Brandon, S.D., the Sioux Falls Argus-Leader reported.
Tom Walsh, owner of Burger King restaurants in Sioux Falls and most recently the Willow Run Golf Course, submitted a written proposal to the Brandon City Council, which was addressed at the Council’s November 4 session, the Argus-Leader reported.
“If you Council members and Mayor are willing to take a chance, I’m willing to take one too,” Walsh said.
Beginning Janurary 1, 2014, Walsh requested a three-year lease, with two options to renew for three additional years with each option. He suggested an annual lease price of $140,000, which, he said, “will more than cover your debt service,” and offered $1.2 million to purchase the course.
In his proposal, Walsh asked that all lease payments and other payments to the city of Brandon be applied to the purchase price, as well as 50 percent of any capital improvement up to $250,000, the Argus-Leader reported.
Other conditions of Walsh’s offer stated that the proposal would include some form of guarantee that it remain an 18-hole golf course, and membership rates would not increase for the first term of the lease, the Argus-Leader reported.
Walsh also offered to assume the city’s 2014 golf cart lease payment, and included consideration of purchasing salable pro shop and food and beverage inventory, both at cost, the Argus-Leader reported. He would also interview and consider hiring current employees of the BMGC.
In his written proposal, Walsh stated, “The bottom line is that the golf course continues to be a large cash drain and faces continued losses, [and] over $500,000 in capital improvements [is needed] if the Brandon course is to compete with the likes of Grand Falls Casino, Prairie Green, Bakker’s Crossing, Willow Run and others.
“As Mark [Amundson] said, the decision is if it is an amenity or a business,” Walsh’s proposal continued. “Either way, as long as it is run as it is, it will continue to be a cash drain.”
Last fall, the City Council hired golf course consultant Mark Amundson to review the full operation of Brandon’s municipal golf course (BMGC), the Argus-Leader explained. The study was initiated to help improve revenue at the BMGC. Amundson has given two updates to the Council, with the third report expected at its November 18 meeting.
“Zane’s [Swenson, BMGC manager] comments of annual fixed costs of $1,160,000-plus and that the golf industry has lost more than 5 million golfers in the last four years is eye-opening and even more of a challenge, especially with the Grand Falls Casino golf course opening next year,” Walsh said, the Argus-Leader reported.
Alderman Bob Bruning said he wasn’t comfortable making such a quick decision, citing that Amundson’s full review of the BMGC has not been fulfilled at this time, the Argus-Leader reported.
“Once we have the information, we’ll be in a better position to decide,” Bruning said. “And being a public asset, if we were going to put it up for sale, I don’t know if we would have to put it for bids.”
Bruning said the BMGC would also need to be appraised before moving forward.
“As Bob said, we have some thought process to do,” Mayor Larry Beesley said, “Is it an amenity or a business? That’s one of the first things we have to decide.”
Alderwoman Mindy Hansen said she does not favor to lease and/or sell the BMGC, the Argus-Leader reported.
“I believe it is an amenity,” she said. “Even with changes, we may not be able to run it with a profit, but I think we can run it efficiently, … as I just don’t believe it’s in the best interest of the city or its taxpayers on selling the golf course at this time.”
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