The Connaught Golf and Country Club would like the City of Medicine Hat to guarantee a $750,000 loan to install a new irrigation system. In total, it is going to take close to 2 million dollars for the improvements and to keep the club solvent (ie. pay off old debts). I don’t mind loan guarantees where the City has a reasonable expectation of payment but a $2 million loan is not feasible, and from what I understand, they want an outright grant of the next installment.
There is precedent. About 15 years ago the Medicine Hat Golf course borrowed $750,000 to upgrade there irrigation system. But they had a plan. The members matched the $750,000 the City borrowed them, and paid back the loan with interest. The City actually made money off of the deal, and everyone was happy. But from what I can tell, there is no plan here. Remember that both Clubs lease their land from the City for $1 per year so the taxpayer is already making a significant contribution annually.
If/When the Golf club can not pay off the loan, and they are at a point when the hole is too deep to get out, does this become a City golf course at the expense of the taxpayers? Is this just another public service like the Arena, the Leisure Centre, the Esplanade or should the City expect the Club to operate like a business and pay their own way.
And Connaught is losing members right now with Desert Blume opening up next year. It certainly is not going to get any easier. Don’t get me wrong, I like the Connaught Golf Club, and they have one of the best pro’s around (Glen Carr). I want them to be successful. But is this something feasible? Do they have a solid plan for repayment? Should any business be entitled to ask the City for loan with no real expectations? What do you think?