Discussions related to the fate of Squaw Valley Golf Club remain ongoing. County commissioners met in executive session for about five hours Wednesday, June 26, interviewing three companies with development proposals for the 469 acres of county-owned property.
Following the meeting, newfound business partners Mike Williams, a local entrepreneur, and Duff Cunningham, golf pro at Squaw Valley, and their recently formed MAD Golf, LLC, remained among the interested parties, which also included Evergreen Alliance Golf of Dallas and Acreage Acquisition Resources of Fort Worth.
“We’ve learned a lot about the needs of the county,” Williams said.
Two days later, the message from MAD Golf had changed. Williams announced the Glen Rose-based corporation was pulling out of discussions.
“It is with regret that we announce that MAD Golf has elected to withdraw from the RFP (proposal) process,” he said.
The appraised value spurred the cease in discussions.
“Our approach will not render a purchase price consistent with the appraisal which the county must honor according to statutory code,” Williams said.
Speaking on the appraisal, County Judge Mike Ford said Squaw Valley was appraised at what some community members might consider a “mind blowing” $2.5 million.
Ford said the two remaining players in the discussions are aware of the value.
“The sell or lease has to be based upon actual value,” he said. “We cannot discount the price due to the law.”
Determining the golf club’s value was an extensive effort.
“The appraiser looked at the property from three standpoints,” Ford said. “A cost approach, sales comparison and income capitalization approach.”
While some community members might expect the rolling, expansive property and its two 18-hole golf courses to be worth more, Ford said the courses actually hurt the value.
“The golf course is like a home with a swimming pool, you would think the pool would increase the home’s value, but that isn’t the case,” he said. “Having a dedicated golf course decreases the value.”
Still, the discussions are far from over. Ford said he expects the applicant pool will be narrowed to a lone finalist next week during a closed session discussion at the commissioners’ Monday, July 8 meeting. But selecting that finalist does not mean a deal will be signed in the immediate future.
“We still have to decide if this is the direction we want to go,” Ford said.
While six companies initially responded to the county’s request for proposals, officials decided to remove management offers from discussions and focus solely on development.
“Both of these (Evergreen Alliance Golf and Acreage Acquisition Resources) would develop around the golf course,” Ford said. “After studying the issue, I have found there are very few golf courses — rural or otherwise — that make enough money to stay open off of golf (revenue) alone. Development would allow for the sell of housing lots built around the course.”
He also said to attract potential homeowners, the developer would have to maintain a top-quality course, and the benefits would include the return of the entire course to tax roles. But the future for golfing in Somervell County is less certain without the proposed development offers, according to Ford.
“If we don’t do something like this, I cannot guarantee what would happen with golf locally,” he said.
While maintaining a local course and quality play is important to officials, the big issue according to Ford is the recent $500 million decrease in ad valorem taxes.
The decrease in revenue remains a major concern as commissioners continue to work on the budget for the coming fiscal year. Ford said he hopes an agreement relating to Squaw Valley will be made before the close of budgeting season.
“By the time we have to settle on the budget, we should know if a proposal will be accepted,” he said. “We have to know which way to go before we can settle the budget. It’s within the realm of possibility that this thing could be done by Oct. 1 (the beginning of the new fiscal year) or Nov. 1.”
Another concern is the cost of operating the golf club. Ford said since 2005, the county has supplemented the operation from $175,000 to almost $750,000 annually. That figure doesn’t include the more than $2.3 million spent remodeling the Apache Links course in 2008.
“As you look at this over the years, we have we have spent millions (of dollars) on the golf courses combined since 2008,” Ford said.
Meanwhile, the number of golfers teeing off at the course has remained static as the sport continues to experience a decrease in participation across the nation, Ford said.
“We have no choice but to look at everything,” he said. “We are trying to save golf, but the numbers show we cannot support it at the same level. If we are able to hang onto the course, it will have to operate differently. I think most of our local golfers are aware of that.”
Maintaining local, quality play and a position for the resident pro were major concerns fueling MAD Golf, and Williams said it appears the current consensus is that Cunningham should be a part of “any solution that may be achieved.”