“Papago Golf Course, Phoenix in limbo” plus 1 more

Posted: 08 Jan 2011 09:12 PM PST

by Lynh Bui and Connie Cone Sexton - Jan. 9, 2011 12:00 AM
The Arizona Republic

When it opened nearly 50 years ago, Papago Golf Course was considered a jewel amid the red rocks of east Phoenix, its design a challenge for professionals but enjoyable for amateur duffers.

At its peak, golfers lined up to play more than 100,000 rounds a year.

Profile: Papago Golf Course | Papago Park

It was a course destined to remain a top draw for local and visiting golfers, city officials believed.

But the course deteriorated after the 1990s. The Phoenix Parks and Recreation Department, which oversees municipal golf courses, said major renovation was needed on the lakes, tees, greens and bunkers. Trees were dying, and the existing clubhouse needed to be replaced.

In 2007, the city had a plan. With no money to inject, Phoenix sought an outside course manager. From three proposals, Phoenix selected the non-profit Arizona Golf Foundation to restore the course to its original luster and run day-to-day operations. The foundation secured $12.5 million in financing through the Phoenix Industrial Development Authority, which issued bonds to renovate the course.

After pumping $10 million into Papago, the foundation filed for bankruptcy in October. Bankruptcy proceedings for the non-profit management arm of the Arizona Golf Association are expected to continue through February.

In the meantime, city officials are in limbo, waiting to hear from a judge if they can fire the foundation and hire a new company to run the course.

City officials insist no taxpayer dollars are in jeopardy despite the foundation's bankruptcy. Deputy Parks and Recreation Director Rob Harman has said that Compass Bank, which bought $9.5 million of the tax-free bonds, only has a right to golf revenue from Papago and cannot seize the property or its assets.

But that doesn't mean the city hasn't spent taxpayer money to take care of Papago since the bankruptcy filing.

The Parks and Recreation Department spent at least $100,000 to water and seed the course in 2009 and 2010.

"The payments were a bridge to enable the course to prepare for and stay open until the peak winter season arrived," city spokesman David Urbinato said.

Rick Naimark, the Phoenix deputy city manager who oversees the Parks and Recreation Department, said the city is disappointed to be at this juncture with the Arizona Golf Association.

He said the city has an investment in Papago and is eager to move on following the bankruptcy.

Ed Gowan, executive director of the Arizona Golf Association, said he couldn't comment until legal proceedings are complete. Gowan said the foundation's attorney, Jack Hebert, is the only spokesman for the foundation. Hebert did not return calls and e-mails requesting comment.

Foundation officials from the beginning, however, have blamed the poor economy for troubles at Papago. They also have said they want to keep managing the golf course and have come up with a plan to do it.

"We have the financial resources at our disposal now to give us a great shot of performing all the responsibilities we're supposed to perform," Hebert said during a December bankruptcy hearing.

Three bidders

On Jan. 12, 2007, Phoenix issued a request for proposals to outsource the management and restoration of Papago, located between Van Buren Street and McDowell Road, off 52nd Street, near the Phoenix-Tempe border. The work included restoration of the irrigation system, turf, driving range, restaurant and clubhouse. The goal of the partnership was to "return this facility to its status as a premier municipal golf course destination, while maintaining the integrity of the design concepts of the original architect," the request says.

Three bidders emerged as the top contenders: Lyon Golf, Papago Golf LLC and the Arizona Golf Association.

- Lyon Golf: Partnered with high-end real-estate company Lyon Realty, Lyon Golf runs the ASU Karsten Golf Course at Arizona State University in Tempe. According to its proposal, Lyon Golf had planned to work with noted golf architect Forrest Richardson to restore the Papago course. Richardson had been deeply involved in the city's prior efforts to restore Papago. Lyon also had some of the original plans from the course's designer, the famed William Bell of the family that designed Torrey Pines in San Diego.

Lyon Golf proposed investing about $12.2 million in the project, offering the cash up front from the Lyon family trust. Lyon had the most ambitious revenue projections of the three finalists, estimating a renovated Papago would make $4.9 million in 2008-09, growing to $6.7 million in 2011-12. Lyon also proposed some of the highest greens fees, $30 to $147 a round. It asked to run the course for 25 years.

- Papago Golf LLC: A partnership between Jim Bellows and Landscapes Unlimited. Bellows' company runs Rolling Hills Golf Course, a Tempe municipal facility in Papago Park, also home to the Papago course. Landscapes Unlimited did restoration at Torrey Pines for the 2008 U.S. Open. Papago Golf proposed spending about $6.4 million on the project, offering $4.4 million up-front cash. It proposed the most modest rates, $11 to $40 a round. The company also had the most modest revenue projections, estimating the course would generate $1.8 million in its first full year, growing to $3.3 million in 2011-12.

Randy Spenla, a city auditor who served on the selection committee, said the proposal didn't include enough funding for maintenance. He said the proposal to run the course under a 40-year lease was too long.

- Arizona Golf Association: The Arizona Golf Association's proposal fell in between the other bidders. The association's management experience was limited. It had managed Villa Monterey public golf course in Scottsdale, which shuttered after the association couldn't afford to operate it. Scottsdale had to spend at least $82,000 to maintain the nine-hole course. It eventually was closed and became an eyesore until the city turned it into a park in 2006. For its Phoenix proposal, the association called on the Golf Guys, a team that includes Marvin French, to manage Papago. French helped develop and design Pumpkin Ridge Golf Club in Oregon. The association proposed funding $200,000 in cash to start renovation at Papago, then planned to rely on loans from the city's Industrial Development Authority.

The association estimated Papago would make $4.5 million in 2008-09, with revenue growing to $4.9 million in 2011-12. The AGA created a separate non-profit to operate Papago for 25 years.

Arizona Golf Association won the bid.

Surprise selection

Mike Conner, a general partner in Lyon Golf, said many were surprised when Phoenix selected the Arizona Golf Association and its foundation as the winning bidder, considering the Villa Monterey failure in Scottsdale.

Conner also said he was surprised that a proposal using public bonds won over Lyon Golf's plans to fund the project through private money from the Lyon family.

"It's hard to lose a deal when you're totally at risk, the city has no risk, and you still lose," Conner said.

Spenla, the city auditor, said the three proposals were similar and none would have provided a windfall to the city.

The association's plan was attractive, he said, because of the development-authority bonds. "That made their cost of borrowing the same as the city," Spenla said.

Another positive for the association was its presentation. "Each firm had a 90-minute or two-hour interview and there is a subjective element of who did the best job in the interview," Spenla said. "AGA did that."

Some wondered, however, whether the association had a foot in the door that gave it unfair advantage over other companies. The association's Gowan sat on the city's golf-advisory committee and had access to city discussions on what to do with Papago.

Joe Hume, a founder of Save Our Papago, a group formed specifically to keep the association from running the course, closely followed the course improvements. He raised questions about the ability of the foundation to deliver its promises, but his questions have fallen on deaf ears.

"Why wouldn't you do business with the people who have the money and the expertise?" Hume said.

Unkept promises

In April 2008, Papago shut down for eight months as the $9.75 million overhaul began. The foundation replaced turf, expanded the driving range and replaced the irrigation system.

But there were some promises that weren't kept.

The foundation didn't complete re-vegetation throughout the course or make its rent payments to the city.

But the biggest disappointment was the failure to build a clubhouse after razing the existing one. The clubhouse is in a trailer until a permanent structure can be built.

Hume said he and others are disappointed with the renovation, which destroyed more than 250 of the course's iconic palm and eucalyptus trees and functional clubhouse. He said a core group of golfers who supported Papago even when the course was falling apart have stopped playing.

The foundation had support from several high-profile organizations, including the Arizona Women's Golf Association, the Junior Golf Association of Arizona and the United States Golf Association. A year after the renovation, Golfweek named Papago one of the top 50 municipal courses in the nation.

Bellows said it would be hard to find a replacement to manage the course.

"The sad part is they missed a big opportunity, because now the industry is totally different than it was three years ago," Bellows said. "The lenders aren't out there. Equity isn't out there."

Greg Stanton was the councilman who represented the district that includes Papago when the decision was made to go with the foundation. He said the city wanted to restore the golf course to its "former grandeur" without using money from the general fund, which pays for core city functions such as police and fire services.

The foundation wasn't successful because the economy took a dive, Stanton said, and fewer people were spending time and money playing golf.

"There were some folks who felt AGF was the very best and others didn't," Stanton said. "Anytime you have a competitive RFP process, you'll get strong sides on both issues."

The Golf Guys is still running Papago during the bankruptcy proceedings.

Regardless of what happens, Naimark, the deputy city manager, said he was determined to see a clubhouse built.

Where the funding will come from isn't known.

Naimark won't join those who question the choice of the foundation, but said, "We didn't achieve what we set out to achieve."

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Golf-McDowell bucks the Kapalua trend of first-time struggle

Posted: 08 Jan 2011 10:01 PM PST

By Mark Lamport-Stokes

KAPALUA, Hawaii, Jan 8 (Reuters) - First-time players often struggle in the PGA Tour's season-opening event at the Kapalua Resort but U.S. Open champion Graeme McDowell has flourished this week.

Despite launching his 2011 campaign with new clubs in his bag, the Northern Irishman will go into Sunday's final round of the Tournament of Champions in a tie for sixth, just six shots off the lead.

"All in all, I'm very happy the way I've played this week coming out here with some new stuff in the bag," McDowell told Reuters after carding a five-under-par 68 in tricky winds on Saturday.

"I was just anxious to come here for the first time and see what was going on really. I've struck the ball very well, especially my iron play."

McDowell, who has switched his golf club manufacturer from Callaway to Srixon, felt the large greens on Kapalua's Plantation Course posed the biggest problem for first-time players.

"These greens will definitely leave you scratching your head a few times," he said after taking 29 putts on Saturday. "A lot of first-timers can kind of go: 'This is a bit weird this place.' It just takes a bit of knowing.

"I can see why guys continue to play well here, guys who have played well in the past—the (Stuart) Applebys, the (Jim) Furyks and the (Geoff) Ogilvys.

"Once you get your head around the slopes, the grain and the tendencies of this golf course, I can understand that you can continue to come back and play well here."

BACK-NINE FRUSTRATION

McDowell's one frustration over the last two days has been his failure to shoot lower scores on the back nine.

"I have played the front nine pretty well but I haven't played these last five or six holes all that well," he said after coming home in two-under 35.

"There are two par-fives coming in and a couple of short par fours and I haven't taken advantage. Today I missed a short one on 14, three-putted 15, had a chance of 16 which I didn't take and birdied the hardest hole on the way in—17."

McDowell ended last year with a hectic flourish, criss-crossing several time zones as he played seven tournaments in as many weeks—the last of them the Chevron World Challenge where he beat host Tiger Woods in a playoff.

He will next play in the European Tour's Abu Dhabi Golf Championship in two weeks' time before taking a month off to recharge his batteries.

"In many ways, I am seeing this as putting an end to the end of last year," he said. "I just feel like I am continuing on. Abu Dhabi will signal the end of something for me.

"I will then try to re-set and re-charge, put the feet up and rest, get into the gym and prepare myself for the season because Christmas was over in a flash and I was back on the horse again before I knew it. I am looking forward to some time off."

(Editing by Alastair Himmer; To comment on this story email sportsfeedback@thomsonreuters.com)

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