Thursday, November 20, 2008

Cape Coral takeover of golf course carries risk

By Brian Liberatore • • November 20, 2008

The last group that tried to run the The Golf Club in Cape Coral lost $3 million in five years.

Now, the city government wants to take a swing at it.

While a public takeover may be the only hope for the defunct 175-acre course, such a move carries risks. And some question how much the government should risk to protect land.

"I'm not sure about how I feel about it," said Cape resident Ralph LePera. "I'm aware something needs to be done. I just don't know if it's the government's job to do it."

LePera joined hundreds of other residents Tuesday for a presentation from the Cape Coral Community Redevelopment Agency on a plan to buy the course from Florida Gulf Venture LLC, which closed the course two years ago after losing millions.

The CRA wants to rehabilitate the course either as a new course or a public park.

"In this case, the government is only providing the actual financial tool," said former Cape Coral mayor and current consultant Joe Mazurkiewicz. He represented a group of property owners lobbying to save the course.

"The CRA would immediately contract with the private sector to develop the course and make it an amenity," he said. "The reality with the banking industry where it is right now, this is the only option."

The course's owners have tried to convert the course into a multi-use property with condominiums, retail space and offices - a move that was shot down by nearby property owners and government officials. Attempts to sell the property have also failed. After two years of nothing, the CRA stepped in.

CRA must expand

The CRA's budget comes from a portion of property taxes paid by parcel owners in the CRA district, a one-half-square-mile in downtown Cape Coral. As property values increase in the district, the extra taxes from that value go to the CRA. The agency pulls about $2.3 million annually from downtown properties. The money can only be spent in the CRA district, so to purchase the golf course the CRA would need to expand its borders to include property around the course.

But if the property values don't go up, the CRA doesn't have any funding. While the CRA's income has stayed steady the past few years, plummeting property values elsewhere have some concerned.

CRA executive director John Jacobsen did his best to alleviate those fears Tuesday. The addition of a functioning golf course, he said, would surely boost property values.

The numbers support his claim.

The average value of property plummeted 11 percent among a random sampling of non-homesteaded property - property without tax exemptions - around the The Golf Club the year after the course closed. Around Coral Oaks Golf Club in the north Cape, non-homestead property rose an average of 28 percent during that same time period.

Between 2005 and 2008, the property around the functioning course only dropped an average of 11 percent while the property around the defunct course fell nearly 30 percent.

Success possible

Many are confident a public entity can succeed where a private group failed.

"It can be viable," said Joel Jackson, executive director for the Florida Golf Course Superintendents Association. "There's a dance that has to be negotiated between the operation costs and the greens fees."

Public courses, he added, also don't need to turn a profit.

Mazurkiewicz said Florida Gulf Venture was bound to fail after it paid too much for the course.

Lee County Clerk's office shows a $13.9 million amount on the property in the name of Florida Gulf Venture and signed by manager Kent Carlson of Rylan LLC.

The project's success may boil down to how much the CRA pays for the property.

The Trust for Public Land could help with those negotiations. The nonprofit acts as an intermediate buyer, purchasing property from private companies and selling it back to governments. The group was behind the Naples Zoo, the Southwest Community Park in Cape Coral and several other golf courses around the country.

As a nonprofit, the Trust can offer tax benefits and has access to federal and state grants to help with the purchase.

"It's going to boil down to three things," said William Nolan, a consultant representing Florida Gulf Venture. "An agreement on the price, an indication by the residents that they're interested in making this go forward, and the blessing of the City Council."