Council members from three cities vote unanimously to help golf course

In a special joint meeting Thursday night, council members from Lehi, Pleasant Grove and American Fork voted unanimously to authorize the issue of $4.6 million in bonds to save the failing Tri-City Golf Course, jointly owned by the three municipalities.

The number of rounds played at the course has dropped by almost half over the past five years, said Jason Burningham, a consultant hired by the cities to study the economic feasibility of the course. The course lost $56,000 last year on revenue of $580,000 and could be losing as much as $600,000 a year by 2015 if nothing is done.

"We own this asset and it will deteriorate to no value if we continue to do nothing," said Pleasant Grove Mayor Mike Daniels. "We are not saying we are going to be completely profitable or self-sufficient. We are just trying to stop the bleeding."

The other option is to divest the golf course, but agreements made when the cities obtained the property from the state would likely preclude selling the land for development or any other purpose, Daniels said. The cities can try to make the golf course break even or turn the land back over to the state.

The $4.6 million investment will allow the cities to build a $2 million clubhouse, invest $2 million in an irrigation system, spend $500,000 on landscaping and fairway improvements, do a $50,000 advertising blitz and make other improvements to the grounds. The three cities would have to decide what kind of bonds to issue, but revenue bonds secured by sales tax would be the most likely option, Burningham said.

The three cities then hope to draw business away from golf courses in Cedar Hills, Eagle Mountain, Orem, Thanksgiving Point and south Salt Lake Valley.

If the plan is successful, the golf course would come out of the red in 2017, earning a profit of $85,000. When the bonds are paid off in 2026, Burningham projected a profit of $400,000 annually.

Any profit realized will need to be invested back into the golf course to keep it viable, Burningham said.

Daniels and Burningham said both Highland and Lindon have expressed interest in buying into the golf course in informal discussions, though no prices have been mentioned.

"They may think that for $200,000 they can come in, but we may think their share over time is maybe $1 million," Burningham said. "I don't think those discussions have been had."

He cautioned that his projection of profitability in 2017 is only as good as the assumptions made in his modeling and that investing in the golf course is a risk.

The mayors and Burningham also agreed the golf course should adopt a new, more marketable name for the course, though no options for the new name were discussed.

This story appeared in The Daily Herald on page D3.