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?
Screw that… let those that play, pay.
I would like an unsecured loan for 3/4 of a million for my business - is there a form I need to pick up at city hall? If the city isnt going to do this for EVERY LOCAL BUSINESS who is in a bad situation, then it cant do it for the golf course either.
So what will it be….?
scenario 1: We do not give the course the money, and the course eventually becomes a “City” Golf course. and the tax payers are on the line for a golf course and the taxpayers loose potentially millions.
scenario 2: We give the course the money, and “maybe” they make it out of this and become profitable, and we only loose $750,000
what is the lesser of evils?
whatever, giving out public loans to private business’s; good policy
/rolls eyes
Scenario 3: How about we plow it under and build some more badly needed housing that will benefit all in the the community. Heck, they could even set it up as a nice posh development that will rake in some decent property taxes.
I am not an economist.
But I do think things like gold courses, pools, rinks, parks, etc do bring an intangible value to the city they reside in, in addition to any tangible economic value.
I’m not saying we should definitely give this loan, I’m not sure….but it is something worth considering.
they are a private company.
I think that the city loses something when Mario’s closed, but I dont think the city should be handing out hundreds of thousands of dollars in unsecured loans to businesses.
pools, rinks parks are for all Medicine Hatters to enjoy, Connaught golf course is a PRIVATE CLUB.
I dont rejoice in them having a cash crises, I am just not very keen to have the city be in the hail Mary loans business.
Well to start with there are steveral things wrong with the original statement by Skeet. Get your facts straight before you open your BLOG!
The City of Medicine Hat is NOT loaning the Connaught Golf Club any money. The Connaught Golf Club is borrowing the money from a bank with a loan guarantee from the City. This allows the Club to get a better rate based and because the land is not owned by the Connaught Golf Club but the City, this is the only way the Club can borrow any substantial amount of money.
The only way the City would owe money is if Connaught should now pay the loan, which I doubt very much that the General Manager nor the Board of Directors nor the Membership would allow this to ever happen.
The City is not in the business of running a golf club. They couldn’t afford it. With union wages, etc. they would more than likely be bust within one year themselves.
Call the General Manager of Connaught if you want to get the facts straight. Don’t read between the lines when it comes to the financial well being of an organization that you are not a member of!!!!
if that last post is true, then i dont see a problem. but if the first post is true, then i think the money would be better spent on maintaining public parks and other things like that. i live in southridge and the pond-park is darn scary! the water is disgusting and stagnant (and has been whether we get good rain or not), there is graffitti, broken glass, sprinklers all around that spray only on the road instead of on the grass (for at least 3 summers straight despite calls to the city to let them know the exact location), etc etc etc. not to mention other areas around town that are falling to the wayside.
but if its a bank loan and the city is basically like a co-signer, i would imagine the club will make those payments and get things done right.
Let’s remember a few things: 1. A loan guarantee is as good as the loan itself. It has to be accounted for on the City’s debt limits and is an obligation which the City might have to pay out. Don’t make the guarantee unless you are prepared to pay off the loan. 2. The Club’s ability to pay off the $750,000 (which is for consolidation of exisitng debt) is contingent on their ability to install the rest of a new irrigation system for which they need an additional $1.4 Million. Where is that money going to come from? A grant from the City? 3. Calgary runs about 8 public golf courses with unionized labour and at no cost to taxpayers, they are self supporting.
These are just a few things to keep in mind as this request is being considered.
Do we need this golf course? As Desert Blume comes into operation should we just close Connaught and sell the land for residential purposed. There could be some real nice big lots for large houses in there which I hear the City doesn’t offer enough of, hence the demand for country estates in the County of Cypress - which does nothing for our tax base despite the fact that those residents are essentially urbanites who shop, work, play and do everything but sleep in the City….but I digress. What about that loan guarantee? What do you think the City should do for the Connaught Golf and Country Club.
K, how bout this then…
Screw that… let those that play, guarantee the loan.
Well to start with there are steveral things wrong with the original statement by Skeet. Get your facts straight before you open your BLOG!
The City of Medicine Hat is NOT loaning the Connaught Golf Club any money. The Connaught Golf Club is borrowing the money from a bank with a loan guarantee from the City
Ummm actually thats EXACTLY what the blog post said, looks like the facts were straight. In either case the city is on the hook for the money should the Golf Course default.
Is the city going to gurantee loans for other businesses that cant qualify to borrow from the bank? We dont have to be privy to the financial information of an organization just the fact they need a gurantee from the city is enough to know there is substantial risk - otherwise the banks would loan them money without the gurantee.
There are many places for the supposedly financially sound golf club to get financing. Several Charter banks and even the Business Development Bank. If none of those agencies think its reasonable or safe enough to loan money to the golf course as they are - why should the city step up and gurantee the loan?
You dont gurantee a loan you arent willing to step in and pay. The city has NO BUSINESS being in the guranteed loans business - unless this is a new city service availiable to all businesses - how does the city pick and choose which businesses are worthy of loan gurantees?
Whether taking the loan out directly or guaranteeing the loan it really comes down to the same thing. If the golf course can’t pay, the city is on the hook. While I certainly am not personally aware of the golf courses financial records it appears as though there is a question of their ability to pay the loan back, as such it seems a risky venture, especially since as a single income family with 4 children trying to make it in our tax heavy and rising utility costs world I don’t have any extra money which would allow me to afford to play on the course itself. I am not sure how anyone can justify taking additional funds from my family to prop up what should be a self functioning private business. If the course is really worth it to those who use it, let them assume the costs. If not, the land that they are using is an absolute gold mine for the city as prime real estate. Not only for housing but also for further develop of the College Campus itself. If the private business can’t stand on its own 2 feet, then it should fall down.