To get the cash-strapped Bethlehem Golf Club into better playing condition, the city wants to take out loans that would be paid back over 20 years, to make improvements to the course’s bunkers, cart paths and irrigation system, as well as the parking lots and clubhouse. A new pavilion would also be built. The city opted to retain management of the course after reaching a deal with union workers to reduce staffing, and it is also attempting to secure more revenues from the leasing rights to operate the club’s restaurant.
Robert Donchez, the Mayor of Bethlehem, Pa., is pitching a $1.75 million proposal to get the city’s cash-strapped golf course into better playing condition, The Morning Call of Allentown, Pa. reported.
The loans, which would be paid back over 20 years, would be for improvements to the sand traps, cart paths, irrigation system, parking lots, clubhouse and a new pavilion, The Morning Call reported.
Officials hope the projects would lead to an increase in play and provide more amenities that will attract old and new golfers to the 62-year-old public course, The Morning Call reported.
Bethlehem Golf Club operates a nine-hole executive course and the 18-hole Monocacy course, a par 71 offering five sets of tees ranging from 5,175 to 7,017 yards.
City Council could approve the borrowing as early as September, putting the financing on pace to close by October 29, The Morning Call reported.
If approved, Business Administrator Eric Evans said he would hope to begin some of the construction work this year and finish up in spring.
The city’s administration says that the course, which hasn’t made a profit in a decade, can sustain the debt because of strategic staffing changes that will reduce operating costs and from additional revenue that will be generated, in part because of changes in the lease for its restaurant, The Morning Call reported.
In April, the city struck an agreement with its union over staffing that will allow the city to replace four full-time workers with seasonal workers. Those union workers are bidding into other city departments as openings become available through attrition, The Morning Call reported.
The labor agreement with the union prompted the administration to end its search of a private operator to run the golf course.
Meanwhile, the city is pursuing changes to the lease with the operators of its golf course restaurant, the Clubhouse Grille, to bring more revenue into the city’s nearly $1.4 million-a-year golf operation, The Morning Call reported.
The lease, which council committee backed, would increase from a monthly payment of $1,623 this year up to $5,500 next year, bringing it up to market value. The city payments would total $66,000 next year—about $50,000 more than this year. Factoring in 2 percent annual increases, the operator would pay $74,300 by 2024, The Morning Call reported.
That, combined with the labor savings, would give the city enough money to pay back the $1.75 million in borrowing with golf revenue and not impact city taxpayers, who ultimately back the bond if the golf course falls short, said Evans.
City Council’s committees voted to recommend the borrowing and the new lease at separate meetings on August 29th, scuttling a year-long discussion on the possibility of leasing the money-losing golf course to a private operator, The Morning Call reported.
Councilman J. William Reynolds said he thought leasing assets like the golf course is something distressed cities do, and Bethlehem is not. A lease would be the right thing to do as an intermediary step to eventually sell the course or the land, Reynolds said, adding that he is happy with the city’s plan to right the finances of the golf course business and make it better for golfers.
Councilwoman Dr. Paige Van Wirt raised the question of whether the course can support the debt payments over 20 years when studies suggest that fewer people are picking up the sport, The Morning Call reported. Van Wirt asked whether leasing the course would be a better option, noting a study in Massachusetts that showed that 53 of the state’s 63 courses are leased.
Leases can be structured to be short, holding operators accountable for the condition of the course and other city priorities, Van Wirt added.
Evans, who was a councilman last year before his appointment as a business administrator, and Councilman Bryan Callahan had raised the condition of the golf course and its finances as a priority last year and called for public meetings to discuss the possibility of a lease, The Morning Call reported.
Revenue for the Bethlehem Golf Club remained flat over the last decade, city records show, with minor fluctuations during years of bad weather. The golf course covered its direct expenses last year, but paid only $15,000 of a budgeted $150,000 to the city’s $74 million General Fund, city officials said. That left no money left to improve the golf course, The Morning Call reported.
Callahan said he has done a “180” on the lease over the last year, thanks in large part to the union agreeing to labor changes.
In the past year, city officials had reached out to consultants from the United States Golf Association and hired a General Manager, Larry Kelchner, to help the administration plot out a plan for the golf course, The Morning Call reported.
Tell Us What You Think!
You must be logged in to post a comment.