August 2006 “Fore!” Sight Plans for public ownership of a local golf course fail to hold water By Nancy Tujaque
Post 9-11, in an effort to stimulate the nation’s rural economy, President Bush expanded a program offered through the U.S. Department of Agriculture (USDA) that loaned money to governmental entities and nonprofits in rural areas for the purchase and construction of community facilities like fire stations and recreational centers. As a result, other recreational developments, including golf courses, became loan-eligible projects. Facilitated by a security bank, the loans are guaranteed to up to 90% of their value.
Earlier this year, the Gibson County Water Projects Authority Board (GCWPAB), a quasi-governmental agency originally created to handle the funding and formation of the new lake in Trenton, began tinkering with the idea of using the USDA program to buy the Diamond Oaks Golf Club, which abuts the lake. Board member Njana Coleman says the board simply thought the golf course, if community-owned in conjunction with the lake, “would add to Gibson County, to the industry in the county and to the taxes. And if the money is available, why not take advantage of it?”
Many in Gibson County were skeptical as to the true liability of the county should it default on its payments. Others questioned the veracity of a prospectus composed by Spear Consultants, a golf course consulting firm hired by the course’s current owner, Carrol Rea, in accordance with USDA specifications. In the end, a majority of county commissioners who were not “totally enthused” by the proposed purchase squelched the deal, says Cary, N.C.-based consultant Doug Spear, who has worked on numerous UDSA golf course projects nationwide. “The Water Authority is not doing the loan now,” he reports.
Undeterred, Rea assisted in the formation of a new nonprofit group, the Gibson County Recreational Foundation, to qualify for the USDA loan instead. Why not just find a private market buyer? Rea, who built the course himself in 1999, says he’s concerned that a buyer found outside the USDA program might convert Diamond Oaks—Gibson County’s only public golf course—into a private course. (Rea’s total investment in Diamond Oaks is $2.5 million. He intends to sell it for $1.2 million and has already sold to an investment group numerous parcels of land surrounding the course for planned residential offerings.)
Will it fly? USDA Public Affairs Specialist David Glasgow says the application faces an uphill climb. Given the relatively recent inclusion of golf courses (and money for them) into the pot of eligible projects, approval of Rea’s project will be “more difficult,” he says. Spear agrees. “This is a program that works,” he says, “but not in every case.”
Despite the obstacles, board member Coleman remains hopeful of a successful outcome. The situation, she says, reminds her of a previous struggle the county faced (and overcame) battling naysayers who doubted the community’s ability to site a lake in Trenton.
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