Ever since a group of golf course advocates approached the county board looking for money to upgrade Superior National Golf Course at Lutsen, there’s been a lot of attention and criticism focused on the course, and the EDA's management of it. This has the EDA board worried. They need money for the course, but it’s been a tough sell. At the recent EDA board meeting, Tuesday, October 12, there was discussion about Superior National, and about the perception among some in the community that it’s a drain on county finances, benefitting a select few West End businesses. Mike Littfin is the EDA board chair:
“There have been numerous city/county/EDA meetings regarding the golf course; who’s going to support it; 1 percent monies, so on and so forth. There is a perception out there that the EDA has not managed it properly…. there’s a lot of misinformation that people have.”
In recent years, the EDA has gone to the county board to borrow money to cover golf course bond payments and startup costs in the spring, when there’s no money coming in. Previously, the EDA had a line of credit with a local bank to cover these expenses, but the state auditor prohibited that practice and the EDA began going to the county. But, as EDA treasurer Jim Hall says, this is normal procedure and the loan, generally about $200,000, is always paid back.
“We’ve always done that before,” says Hall, “but this last year it got fouled up because of the dollars, the matching funds that were supposed to come from IRRB and they didn’t show up until way into February. That’s where it got a little late….but now we’ll be able to pay it and we’ll be even and the county won’t be paying anything. It’s just a loan. So far, there hasn’t been any county dollars put into the golf course. There’s none, and the public has to understand that we’re not being subsidized. The city is subsidizing, I believe, the city golf course, and that comes out of their levy, but that’s not been true of Superior National to this point.”
According to County Auditor-Treasurer Braidy Powers, Hall is correct in saying there’s been no direct county support for Superior National Golf Course over the years, but, he says, there has been indirect support.
“There’s a three percent lodging tax in the West End, and two percent of that, two thirds of that tax went to pay those bonds over the years. Then the additional nine holes that was built in 1998, that was a revenue bond, so, that was not a general obligation, and that was paid by the revenues of the golf course. So, there hasn’t been any direct county levy for either bonding or for the operations of it. That doesn’t mean the public hasn’t contributed, because they have, in lots of ways.”
One of the ways the county has supported the golf course, says Powers, is in funding the EDA.
“That was the primary purpose when it was created, is my understanding, was to create and operate the golf course. And, you can make your own judgment as to how much of their management has been for the golf course, but the levy, for the EDA is somewhere around $1.7 million since it started in 1989 to now.”
When asked if he thought the problems at Superior National were due to management decisions or economic conditions, Powers was diplomatic.
“It’s gotta be a combination….maybe missed opportunities? Certainly, it’s the fund balance. The EDA has a general fund just for the general EDA operations, and then they have a fund for the golf course, and that balance has been going down. Their operations are not adding cash. They’ve been using up the cash that had been built up in the early years. So at least in recent years, since the dot com bust, you know, in the late 90’s, early 2000, it started to hit the economy overall and golf went down in general. And then the recession, the recent one there, all those things have hit and have affected the cash there. So that cash is definitely down. I know you have to market, but if you don’t have the cash, it’s hard to do those things. And you have to put money back into your capital, at a minimum, just to keep things from deteriorating. And when you’re going down in cash, it’s hard to, you know, when your operations are hurt, I guess you need to come back to the county and make those requests, to keep your standards up at least to a minimum degree. Tough to do in a declining market.”
Superior National is one of the projects that’s eligible for 1% sales tax funding, and the EDA has submitted a request to the county board for 1.8 million dollars for capital improvements. Golf course advocates maintain that without financial help from the county, the course will continue its decline and a vital asset to the local economy will be diminished. The county board has made no decision regarding Superior National and recently expressed their intention to hire an independent golf course consultant to advise them. Braidy Powers:
"The county appointed four of us on a committee to look at what should be done there, because those aren’t easy to answer, to separate, you know, a management issue from the general economic issue and local economics. That’s one of the things that we’re hoping will come out of this is that a national consultant can sift through those issues and give us a good sense of what caused the decline specifically so that we’re not just speculating and we’ve got a little stronger basis on which to go forward.”