By Raymond Monasterski
It’s open—for now.
The Vista Links, Buena Vista’s municipal golf course, remains open, even though the city defaulted on the course’s bond payments in December.
Buena Vista is expected to negotiate a settlement on the defaulted bond payments with bond insurer ACA Financial Guaranty Corp. in late April.
City Manager Jay Scudder told the Rockbridge Report in December that the city would have owed $30 million in interest over the life of the golf course loan. The golf course debt no longer exists because the city defaulted, but negotiations with ACA about the default remain.
Now, Scudder has identified three possible outcomes for the golf course’s operations — closing, selling or leasing the course, or remaining open.
Though unlikely, Scudder said the course, which opened in 2004, could close, either from infrastructure problems or ACA collecting collateral as part of the bond agreement.
“[ACA] would be paying taxes on everything…they’d become owners,” he said. “It’s not an ideal outcome.”
Along with the course itself, the city offered its municipal building and the police station as collateral for the debt.
Three phone calls to ACA requesting comment on the expected negotiations with the city were unreturned.
Scudder said he is concerned if the golf course were to experience a severe infrastructure problem, like a broken sprinkler system or dried water source. The course is currently watered through a retention pond and well system.
Water and infrastructure concerns would remain if the city were to sell the course or reach an operating agreement with an outside management company.
“It’s pretty hard to give free water to a private entity,” said Scudder.
Scudder said the city has researched management companies in the industry but has not entered agreements with any private entity.
But staying open under city management has its challenges. The city must still invest in the course, especially in maintenance equipment and materials, said Scudder.
Where did the golfers go?
The Vista Links suffers from a problem facing golf courses nationwide — lack of players.
According to Bloomberg Businessweek, the number of U.S. golfers dropped 23 percent from its peak in 2002 to 2013.
In 2014, Vista Links hosted 13,500 rounds of golf, substantially lower than the 21,000 rounds played on the course just a few years ago, said Vista Links general manager Edward Armentrout.
“We’re aware of the state of the industry,” said Armentrout. “Everyone is struggling to get the group of 18-34- year-old golfers, which is a significant amount of revenue.”
But the Rockbridge area’s other golf course, Lexington Golf and Country Club, is bucking the trend with 18,000-19,000 rounds played in 2014, up from 14,000 only five years ago, according to the club.
Going into the next budget year and beyond, Scudder said he expects the course to remain open, and is adjusting the budget so that the city can minimize its operating losses.
The Buena Vista golf course had slightly less than $450,000 in revenues in 2014, according to the city’s annual report, but the city lost $40,000 on golf course operations in 2014, not including further costs associated with building the golf course pavilion last year.
Scudder said he’d like to bring operating losses down to around $20,000, so that the course will not put an unaffordable strain on the city’s general fund.
“If the course is close to sustainable on the operating side, then why not keep it open …even if it limps along,” he said.