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Beavercreek pays $1M to get out of contract

Beavercreek used $1M from its general fund to pay for its mistake.

The Beavercreek Golf Club typically earns enough money to cover operating expenses, but not enough to cover capital and debt costs. In 2008, nearly $1 million of the city's general fund went toward repaying the $9.5 million construction debt from 1997. File photo

Bill Reinke The Beavercreek Golf Club typically earns enough money to cover operating expenses, but not enough to cover capital and debt costs. In 2008, nearly $1 million of the city's general fund went toward repaying the $9.5 million construction debt from 1997. File photo

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By Christopher Magan, Staff Writer Updated 3:32 PM Sunday, November 29, 2009

BEAVERCREEK — When city leaders hired Vintage Golf Properties in 1997 to manage the Beavercreek Golf Club, they were convinced the firm could turn the newly built public course into a money-maker.

In an unprecedented 15-year deal, Vintage representatives promised city officials course income would grow annually from a minimum of $18,000 to nearly $6 million by 2023, after expenses and debts were paid, according to court records.

The revenues never materialized, and five years after inking the deal city lawyers filed a lawsuit against Vintage alleging fraud and breach of contract. A criminal probe was also launched, and then abandoned when the city abruptly settled the lawsuit by agreeing to pay $1 million to Vintage to end their relationship. In October, city council voted to borrow money from its general fund to pay the settlement.

“Obviously the lesson learned is you don’t get into a 10- or 15-year contract,” said Councilman Scott Hadley, who was on the board when the agreement was approved. “We tightened the noose around our own necks. I didn’t like it then, and I don’t like it now.”

Beavercreek’s high hopes for its municipal golf course’s earning potential was a common scenario across the Miami Valley as other municipalities got into the golf business by either purchasing or constructing courses in the 1990s.

“There is no question that municipalities are very much the biggest players in public golf,” said Steve Jurick, executive director of the Miami Valley Golf Association. The number of courses rose steadily into the late 1990s, but the number of players has not kept up. “Golf is a loss leader. It will never be able to bring in the revenue to produce a surplus to pay for other amenities.”

Now, more than a dozen of the Dayton area’s public courses are owned by municipalities and the majority of those are propped up with taxpayer money — more than $4 million was spent last year. Public courses in private hands are struggling, Jurick said, as they are forced to compete with taxpayer subsidized facilities.

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