Cary Park Board memo
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Cary Park District Board Memo To: Board of Commissioners From: Dan Jones, Executive Director Date: July 28, 2011 RE: Golfvisions Letter of Request Providing exceptional, recreation, parks and open space opportunities. Introduction The Park District and Golfvisions are in the midst of a three year contract that will expire in January 2013. Section 1.8, Restrictive Management Contract Services restricts Golfvisions from managing any other golf course within a 5 mile radius of Foxford Hills. Research Chalet Hills Golf Club has recently gone through foreclosure proceedings and has been moved into receivership. The receiver has contacted Golfvisions about managing Chalet Hills for the remainder of the golf season (month to month basis). It is expected that attempts to sell Chalet Hills will begin sooner than later. As noted in the introduction, Golfvisions is restricted from managing a course such as Chalet Hills due to its location proximity to Foxford Hills. Tim Miles has interest in managing Chalet Hills and has sent a letter to the Park District requesting permission to do so. Management would offer the following perspectives regarding Golfvisions request: 1) there is great instability in the golf market at large (and locally) in the area of discount pricing and a competitive marketplace for greens fees. During portions of the last several years Chalet Hills has underpriced their product and this has affected Foxford Hills ability to maintain solid pricing levels. If Golfvisions managed Chalet Hills they may be able to bring some stability regarding pricing into the local marketplace; 2) the converse to item 1 is that Golfvisions may be given direction by the receiver to improve the image of the golf course via increased sales and one way to do this would be through discount of fees to increase round numbers. This would likely have a negative effect on Foxford Hills; 3) how would Golfvisions manage to navigate their commitment to the Park District simultaneously with their commitment to the receiver of Chalet Hills?; 4) the Park District has a 7 year relationship with Golfvisions and there is a certain amount of trust born from that relationship. There must be trust to allow Golfvisions to manage the chief competition of Foxford Hills. On Friday, July 22 Golfvisions entered into a management agreement with Chalet Hills. Doing so without prior Park District approval has placed them in breach of their contract. Tim Miles will be present at the Board meeting and will answer questions the Board has of Golfvisions regarding this matter and their request. Committee Recommendation There is no Committee recommendation with this item. It is being brought straight the Board for consideration. Management Recommendations In recent years Kemper Golf Management was brought in to operate Chalet Hills Golf Club. During this time their approach to pricing was to cut their prices dramatically and undervalue their product. This Page 1 of 2
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Transcript of Cary Park Board memo
Cary Park District
Board Memo To: Board of Commissioners From: Dan Jones, Executive Director Date: July 28, 2011 RE: Golfvisions Letter of Request
Providing exceptional, recreation, parks and open space opportunities. Introduction The Park District and Golfvisions are in the midst of a three year contract that will expire in January 2013. Section 1.8, Restrictive Management Contract Services restricts Golfvisions from managing any other golf course within a 5 mile radius of Foxford Hills. Research Chalet Hills Golf Club has recently gone through foreclosure proceedings and has been moved into receivership. The receiver has contacted Golfvisions about managing Chalet Hills for the remainder of the golf season (month to month basis). It is expected that attempts to sell Chalet Hills will begin sooner than later. As noted in the introduction, Golfvisions is restricted from managing a course such as Chalet Hills due to its location proximity to Foxford Hills. Tim Miles has interest in managing Chalet Hills and has sent a letter to the Park District requesting permission to do so. Management would offer the following perspectives regarding Golfvisions request: 1) there is great instability in the golf market at large (and locally) in the area of discount pricing and a competitive marketplace for greens fees. During portions of the last several years Chalet Hills has underpriced their product and this has affected Foxford Hills ability to maintain solid pricing levels. If Golfvisions managed Chalet Hills they may be able to bring some stability regarding pricing into the local marketplace; 2) the converse to item 1 is that Golfvisions may be given direction by the receiver to improve the image of the golf course via increased sales and one way to do this would be through discount of fees to increase round numbers. This would likely have a negative effect on Foxford Hills; 3) how would Golfvisions manage to navigate their commitment to the Park District simultaneously with their commitment to the receiver of Chalet Hills?; 4) the Park District has a 7 year relationship with Golfvisions and there is a certain amount of trust born from that relationship. There must be trust to allow Golfvisions to manage the chief competition of Foxford Hills. On Friday, July 22 Golfvisions entered into a management agreement with Chalet Hills. Doing so without prior Park District approval has placed them in breach of their contract. Tim Miles will be present at the Board meeting and will answer questions the Board has of Golfvisions regarding this matter and their request. Committee Recommendation There is no Committee recommendation with this item. It is being brought straight the Board for consideration. Management Recommendations In recent years Kemper Golf Management was brought in to operate Chalet Hills Golf Club. During this time their approach to pricing was to cut their prices dramatically and undervalue their product. This
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Cary Park District
Board Memo
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hurt not only Chalet Hills but also Foxford Hills as Foxford Hills was forced to drop prices in order to stay competitive in the marketplace. Should another management company such as Billy Casper Golf enter the marketplace it is possible the same instability in pricing would show itself again. There are pros and cons with Golfvisions request. ED Jones is disappointed that Golfvisions chose to enter into an agreement with Chalet Hills without first allowing the Park District an opportunity to discuss their request before taking an action that puts them in breach of their current contract with the Park District. Looking beyond the last statement, Management would make the following recommendation. If the Board is comfortable with Tim Miles answers to the items discussed in 2 and 3 above, Management would recommend granting Golfvisions permission to continue a management agreement with Chalet Hills. The simple reason for this recommendation is that Management is of the opinion that having Golfvisions manage Chalet Hills as opposed to another management company presents the best opportunity to serve the best interests of Foxford Hills. Management would add that if the Board chooses to grant Golfvisions permission to manage Chalet Hills for a short term, the Board should consider also retaining an option to review this permission again should Golfvisions be offered the opportunity to manage Chalet Hills for a period extending beyond the current golf season. Motion To Consider
1. Move to grant Golfvisions permission to continue a management agreement with Chalet Hills Golf Club and direct the Executive Director to amend the current contract between Golfvisions and the Park District to reflect this.
Alternatives
1. Modify recommendation or provide other Board suggested alternatives. 2. Table item for action and disposition at a future meeting. 3. Take no action on this item.
