In the first six months of operation, Oro Valley officials are finding themselves preparing for larger-than-expected financial losses at The Overlook, the town’s new golf course and restaurant.
The Oro Valley Town Council learned this week the town was preparing to write off about $1.95 million for the Troon-managed operations. The city had budgeted for a loss of a $1.5 million.
The town has made some expense reductions in operations and maintenance, including closing the golf course on Mondays and the lap pool through May. Hours at The Overlook restaurant and tennis facilities were reduced, and staffing levels in the golf-maintenance and restaurant operations were reduced.
Town officials say the numbers could be misleading, noting tax receipts lag by about six weeks. One staffer said the city does not have sales tax data for the last half of November or the month of December.
The announcement of greater-than-anticipated losses for the controversial golf course, which were part of a financial update to the council, colored discussions later in the meeting after Councilmembers Brendan Burns and William Garner asked for a discussion about the possibility of awarding the golf course management to a third party.
A staff report hinted at a specific company interested in managing the course, but the name was then crossed out in copies of the agenda.
Mayor Satish Hiremath said he had no interest in looking for alternate contractors. He noted Troon has been managing the property for only six months in the yearlong contract.
“I think it is way too premature to even look at it,” Hiremath said.
Councilman Lou Waters has called the continued criticism of the purchase of the golf course “political grandstanding.”
“It would be a great pleasure to me to have this council, which has made its decision and made its commitment, to get on board and make this successful rather than nipping away at it at every opportunity,” he said. “If we all got on board, it could be successful.”
Burns described the proposal as a “triple net lease,” arguing the town could avoid some financial risk by at least investigating the possibility of leasing the facility in a different way.
“Right now, with Troon, the risk is on us. If we lose, we are the ones paying out-of-pocket,” Burns said. “With something like a triple net lease, we put that on a third party. If they go bankrupt, they lose money, but we still have the course and we get it back.”
Councilwoman Mary Snider said she is willing to discuss options, but not until after she knows how well the first fiscal cycle goes under Troon. The council eventually voted 4 to 3 against the measure, with Councilmembers Joe Hornat, Waters, Snider and Mayor Hiremath killing the proposal.
The Overlook restaurant, which was part of the $1 million agreement to buy El Conquistador Country Club including the golf courses and tennis facilities, opened in October.
The council voted 4-3 last year to buy the country club and increased the town’s sales tax by a half-cent to pay for renovations to turn the facility into a community center.
