|SPECIAL MEETING OF THE COUNCIL OF THE CITY OF NOVI
MONDAY, OCTOBER 26, 1998 AT 7:30 P.M.
NOVI CIVIC CENTER COUNCIL CHAMBERS - 45175 W. TEN MILE ROAD
Mayor McLallen called the meeting to order at 7:35 p.m.
ROLL CALL: Mayor McLallen, Mayor ProTem Crawford, Council Members DeRoche, Kramer, Lorenzo, Mutch, Schmid
PURPOSE OF SPECIAL MEETING: To review the Golf Course Feasibility Study prepared by Don Childs and Associates
1. Review of the Golf Course Feasibility Study prepared by Don Childs and Associates
Mayor McLallen advised the primary purpose of this meeting is to disseminate further information to the public about the golf course proposal. She continued by stating that the meeting’s format will be a presentation of a feasibility study. The Mayor noted there is further information on their table tonight, a set of questions from Bob Shaw, and that the audience and Council will have the opportunity to raise questions.
Dan Davis began by providing a brief history of the golf course proposal. He advised that the City of Novi and its residents passed a recreation $9.9M bond issue that allowed the city to purchase and develop property in 1993. Mr. Davis reported that the city began the task of acquisition in 1993 and 1994, and started development that focused on the Community Sports Park. Following that, Mr. Davis advised that the Parks & Recreation Commission began the Master Plan process regarding the north Novi property which was an assemblage of property in the Novi Road and Twelve Mile Road area. Mr. Davis recalled that the city assembled approximately seven parcels of different sizes of acreage. He continued by stating that the Parks Commission embarked on the task of looking at the master planning of that site in January 1999 with a goal in mind. He explained the goal was to look for uses that this site could offer the community that they were not currently offering at other sites within the area. Further, the Commission was looking for creative ways to provide these facilities at no additional costs to the taxpayers of Novi. With that goal in mind, Mr. Davis advised that the Commission set out on a lengthy, eighteen month task of studying the proposal and site, looking at the Capital Improvement Plan and looking at the Parks & Recreation Master Plan to determine what facilities they could consider from a long range build out of the community. In September 1995, Mr. Davis reported that the Parks & Recreation Commission came before Council and asked for funding to hire a professional design team to assist them to further the master plan process. Mr. Davis advised the Commission continued that process with the professional consultants through September 1996. At the conclusion of the process, Mr. Davis reported that the Parks & Recreation Commission and the consultants provided four recommendations for Council’s consideration, with the recommendation of moving one of those proposals forward. Mr. Davis reported that two of the proposals had a golf course as a component of the entire site, and the other two featured passive recreation and active recreation uses on the site. Mr. Davis advised that the recommendation offered in September 1996 was then taken under advisement by Council and not too much happened during the next twelve months. Mr. Davis recalled that they had many matters before them at that time and there was no time frame of necessity to move the issue forward. Mr. Davis noted that in January 1997 they thought it was time to move the issue forward, get the proposal before the public and have additional study done on the process. At that time, Mr. Davis advised that the Park’s Commission and staff administratively recommended to Council that the city get professional consulting to determine whether a golf course was feasible on this particular site and whether the city should proceed. At that time, Mr. Davis reported the city contracted Don Childs and Associates to assist with this task.
Mr. Davis then introduced the various consultants attending tonight’s meeting.
Mayor McLallen believes the question before them tonight is whether a golf course is an amenity that this community wants to have and if so, where do they want to have it and what type of financial commitment does the city wish to undertake for this. Further, the Mayor reminded everyone that the proposal should be looked at in preliminary way and noted that they have not approved a golf course. She explained this is the point from which they are going to start the conversation. Mayor McLallen then asked whether there is a consensus of Council to continue this conversation further?
Councilwoman Lorenzo recalled that they gave the approval for a proposal in March and that the proposal was not completed until September. She further recalled that the proposal indicated that the finished product would be completed in eight weeks and wondered why it took so long. Mr. Childs replied that there was a period before they were told to go ahead with the proposal and he cannot recall exactly how long that period was. He noted that once they got started on the proposal, they proceeded in a forthright manner and produced the final product fairly quickly.
Mr. Davis added that it was a matter of getting the consultants on board and coordinating some start up meetings. He explained that part of the process was to meet with Administration to review all of the data that was available (i.e., woodlands, wetlands, mapping, etc.). He noted that it was difficult to coordinate schedules and reminded Council that they spent the past year on the development of the ice arena project. Consequently, Mr. Davis reported that they did not complete the process of contracting the golf course consultants until approximately May.
Councilwoman Lorenzo is concerned when approved contracts are not within the period of time allotted. Secondly, Councilwoman Lorenzo believes if this had been completed in June, they could have brought forth the issue as a ballot question in the upcoming election. Councilwoman Lorenzo is disappointed that they were unable to move this forward and receive this information in a more timely fashion.
Mayor McLallen interjected, that the question is whether Council wishes to proceed with the concept of golf courses in the city’s recreation program at all. She continued by stating that if the answer to that question is supported by a majority Council, then the next question is going to be how is the city going to go through the process.
Councilwoman Lorenzo understood that tonight’s meeting was going to be a question and answer session, and thought Council was at the point where they can ask questions and gather more information. She continued by stating that she personally believes this whole issue is premature. She explained that the public has not indicated that they want a golf course, the city has a lot of debt backed by the full faith and credit of the city (i.e., ice arena) and she believes the city has many other priorities that they have not yet met (i.e., building improvements, Civic Center parking lot improvements, undeveloped parks, etc.).
Councilman Kramer believes parks and recreation is a city priority for families and for citizens, and further believes it is a manner in which most families have the greatest contact with the city. Councilman Kramer recalled that the purpose of the bond issue was to purchase park land for park and recreation use, and that the development would be addressed at a later time. Councilman Kramer believes they are now at that point and they are addressing the use of the land. Further, Councilman Kramer believes the use of the land should be a balanced use. He explained if they are considering a golf course in this particular area, it should be a part of the master plan for the area. As part of this process, Councilman Kramer would like the master plan to be thoroughly reviewed to get a better understanding about how the various elements will come together. Councilman Kramer recalled that when Council reviewed the parks and recreation overall program that it was determined that the need to implement a golf course wherever it may be, was a "C" priority. Councilman Kramer believes it is still a "C" priority, although he also believes they need to discuss the priority and at what kind of rate this project should move along. With appropriate study, Councilman Kramer believes that a golf course may be appropriate somewhere, but noted they need to take it one step at a time. Councilman Kramer added he believes a thorough study about whether a golf could can be counted on to make money should be conducted and if that is true, then they need determine how they are going to use that revenue. He noted that there could be a potential public benefit by reducing some parks and recreation fees, although there he realizes there is also a public liability to pay off the bonds. Further, Councilman Kramer believes they have to decide what should come first after they agree on the master plan for the North Novi Park and what is the right order to do things. Councilman Kramer is uncertain about what is the correct order in terms of engineering or in terms of benefits. Councilman Kramer believes they need to pursue this process to answer the question about whether a public golf course is right for Novi, is there an appropriate place to put it, how are they going to fund it and what are they going to do with the proceeds.
Councilman DeRoche is an avid golfer, but he has some serious conceptual and philosophical problems with the city seeking to own a golf course. He noted that the city does not have much open space and although someone argued that a golf course preserves green space, he believes it depletes a valuable resource. Councilman DeRoche continued by stating that he does not like the idea of the city owning a golf course that the citizens did not bring forth. He added that he also does not believe a golf course is a good idea just because it was master planned by a Master Plan Committee that was part of the Parks & Recreation Commission in 1995. Councilman DeRoche also believes another problem will be the income and philosophically believes that a city should not be operating a golf course. He asked would they construct a golf course to make money and to subsidize golf or is the city trying to raise money to subsidize other parks and recreation programs. Councilman DeRoche believes they need to determine what their motivation is. Further, Councilman DeRoche had the understanding that the 1993 Road Bond was for parks and when he says he is going golfing, he does not say he is going to the park. Although Council has it within their discretion to make this decision, Councilman DeRoche has a real problem when they make a decision of this nature at a Council level. He explained decisions like this should not be made about land acquired by a vote of the citizens when the perception is that they bought it for something different. Therefore, Councilman DeRoche hopes their discussion includes that issue and whether this is an issue that the voters should seize.
Mayor ProTem Crawford is a strong advocate of a municipal golf course. He continued by stating that it should not be managed by the city, but managed by a management company. He agrees that the city should not be in the business of operating golf courses or ice arenas. Mayor ProTem Crawford believes there are competent professionals that can operate those kinds of facilities for the city and still return handsome profits. Further, mayor ProTem Crawford is an advocate of a course on the north Novi parcel. He explained that parklands were purchased in 1993 and they purchased them for a variety of reasons. Mayor ProTem Crawford noted that they did not mention all of the uses at that time. Mayor ProTem Crawford recalled that there was discussion about a potential ice arena or an aquatic facility on that property at one time. Mayor ProTem Crawford does not believe those uses are unlike a golf facility and he added that he believes a golf facility is more similar to a park setting than the other two uses. Mayor ProTem Crawford stated he believes this is a first step and added that this type of facility could provide hundreds of thousands of dollars in future additional revenues that he would expect to be earmarked for park improvements. He also believes a golf facility would provide a quality of life found in all fine cities. Mayor ProTem Crawford continued by stating that from all preliminary indications, a golf course is not going to be an additional burden on the taxpayers. Therefore, he believes the city needs to continue this process, and get the opinions of the experts and Council members.
Councilman Schmid advised he has always been a proponent of a golf course. He stated that since the early seventies, the Novi’s Parks & Recreation Master Plan has included a golf course and he recalled that they proposed the original plan for the site that now surrounds the Civic Center. Councilman Schmid further recalled that the city became close to purchasing a golf course in 1984 where Providence Hospital is located. Councilman Schmid believes there are many reasons to have a golf course, but believes the main reason is for the improvement of the quality of life. A golf course denotes quality of life for a community to Councilman Schmid. As a proponent, he added that he has studied golf courses for many years in other cities. He advised that they are very successful and moneymakers. He also agrees that the revenue can be used to make improvements to the city’s parkland. Councilman Schmid agrees with the statement that they did not propose a golf course for the parkland purchased in northern Novi. However, he added that it also did not exclude a golf course. Councilman Schmid restated it is a money generator and reminded Council that they have preached to the Park & Recreations Department to develop some ideas to generate some dollars to subsidize their programs for the last fifteen years. Concerning the financing, Councilman Schmid advised there are professionals present this evening and he is certain that they will give answers. In addition, Councilman Schmid believes they should utilize the 500 acres in a way to benefit the greatest number of people in the City of Novi and noted that a golf course will generate three to five hundred people a day during the summer. He also understands that a golf course will only use approximately a third of the acreage. Further, he urged the residents to state their opinions.
Councilwoman Mutch advised that she is not a golfer. She explained she made that statement because if she were to vote for the golf course proposal, it is not because she is a golfer. However, if she were to vote against it, she also wants to assure the public that it is for reasons other than her personal lack of interest in golf. Councilwoman Mutch believes there are many services that the city provides that she and her family do not necessarily need or take advantage of, but they do see the benefit to the community in having those services available. Councilwoman Mutch is willing to consider the golf course as a municipal undertaking because she believes it is reasonably within the range of services that any municipality can provide. However, she added whether the city should offer this service or not is another question that has little to do with whether being involved in those activities is legal or appropriate for a city. Councilwoman Mutch also stated she will also consider the appropriateness of any proposed site. She explained that they happen to be focused on this site because this is the proposal that has come forward. Further, she would be interested knowing whether anyone has any suggestions for an alternate site. Councilwoman Mutch understands the Parks & Recreation Commission has studied the idea of a golf course and as Councilman Schmid pointed out, many different configurations of the Commission have considered this and maintained it as part of the Parks & Recreation Master Plan. Councilwoman Mutch added that she believes the term "master plan" gets tossed around a lot and they are not always talking about the same document. She explained there is a master plan for parks and recreation services meeting all of the city parks and services that are proposed to be provided. She continued by stating that within the scope of activities, the Parks & Recreation Commission master plans are developed as sites come on line. She explained there were plans prepared for the development of the Community Sports Park and there are several plans proposed for the North Novi Park. Therefore, Councilwoman Mutch noted that a golf course did not originate at the Council table. She restated that the Parks & Recreation Commission has repeatedly studied this particular idea and has reconfirmed the idea of having a golf course in this area. Additionally, Councilwoman Mutch would agree in general that when people say they are going golfing that they do not say they are going to a park. She explained that in general, golf courses are very often set up to be just that. However, she noted if someone were to golf at Kensington Park, they would not say they are going to the Kensington Golf Course. She believes they would say they are going to Kensington to golf. She believes people would say that because of the size of the park and because Kensington is more than just a golf course. The important thing to Councilwoman Mutch is determining whether a golf course is within the range of acceptable services. She continued by stating that she believes if a golf course can be justified in terms of the investment the city must make and the risk that the city must undertake, and if the site makes sense, then she would not have any problem with considering it. However, she added that a specific proposal would have to provide much more than that to get her vote.
Mayor McLallen shares many of the concerns and comments raised by the other members. However, she added she looks at the golf course as part of an overall plan of asset management. She explained by the vote of the citizens the city has acquired nearly one thousand acres of parkland. She added that the particular language said the land purchase was for the equipping of programs and facilities for that land. She then reminded Council that the money from that bond has almost all been spent on the acquiring and on the equipping to this point, and now they are short money. Mayor McLallen believes that issue is her bottom line. Further, the Mayor advised that the citizens have voted for a park millage. However, because of Headlee and how it affects the city’s finances, that milage is collected at approximately 50% of a half mil because Novi is a growing community. Therefore, Mayor McLallen stated Novi is always running behind in finding funding for the city’s park services. Mayor McLallen restated that Novi is a growing community and the demand on the city’s recreational services increases dramatically. Therefore, the city is always looking for ways to generate revenues without raising fees on existing programs or going back to the voters to ask them to revote for a parks and recreation millage. Consequently, the Mayor sees the golf course as a way of generating that additional revenue. Mayor McLallen advised that she visited the site last week on a phenomenal day when Novi schools were closed and only ran into three citizens. Further, she also discovered that tree stands were constructed in the park for deer hunting. The Mayor reminded Council that shooting is illegal in Novi, but they still found shells on the ground and the park staff informed her that they regularly dismantle tree stands. Mayor McLallen does not believe the city has enough staff to regulate those kinds of things every day and that is what she means by asset management. She explained the city has a great asset, but the city cannot facilitate all of its citizens using it. She restated the site is currently being used by a few (i.e., bicyclists) and she believes they can still enjoy the site with a golf course. Mayor McLallen agrees a golf course may generate a revenue stream and that is why she wants to pursue this discussion. The Mayor believes the question is about why is a golf course proposed for this site versus anywhere else in the city. Mayor McLallen asked where in the City of Novi could someone assemble one hundred and fifty or more acres of land that they do not want removed from OST or Industrial Districts. The Mayor then asked whether the citizens would prefer to purchase more land that costs approximately $40,000 an acre. Mayor McLallen does not believe that makes sense. Further, in all reality the Mayor believes there are only two areas in the city that actually have land that they can assemble. She advised that land is located in the northeastern section that the city recently rezoned as OST or the southwest which is RA zoning found adjacent to Mayberry State Park. Because the city already owns the land in the north, she suggested that they can probably have both; a recreational opportunity and a revenue stream. Further, the Mayor believes they may also have a way to manage an environmentally sensitive area. She explained if they leave the property as it is and there is no funding to maintain it, the land will ultimately degrade.
Mayor McLallen asked Council to limit their finance and environmental design questions to one hour to allow an hours worth of participation from the citizens.
Councilwoman Lorenzo would have been more comfortable if the report were as convincing as other members that a golf course would be a good financial investment. Councilwoman Lorenzo stated Section 10, Page 1 in the Financial Analysis indicates that revenue and expense estimates in the report should not be construed as a definitive assessment of the proposed facilities economic viability.
Mark Fruehan of Don Childs and Associates advised that the economics of a golf course will depend on the philosophy as it relates to the city and the parks and recreation regarding how a property is going to be operated. He explained that a municipality may look at the way this facility is going to be operated differently than someone that is out in the private sector. He advised that municipalities often will consciously operate their golf facilities in a manner so that they can afford the best fee structure to their residents. He explained they are making conscious decisions about how it is going to be staffed, how they will pay the staff, how they will maintain and operate the facility, and at what standard and quality level. Mr. Fruehan believes the biggest issue is the pricing structure. He explained the importance there is to afford a beneficial pricing structure to their specific community residents. From that standpoint, Mr. Fruehan advised it is difficult for him to assume at this preliminary stage what the true philosophy is of the city and how it intends to operate the golf course.
In place of knowing what the city’s philosophy is, Councilwoman Lorenzo stated it seems as though they have developed this study by using some philosophy. Mr. Fruehan agreed and advised that there are some basic assumptions made as it relates to both the development and the financial operation of a golf course facility.
Councilwoman Lorenzo asked Mr. Fruehan to explain the particular philosophy that he used for this study (i.e., green fees, rounds of golf, etc.). Councilwoman Lorenzo is questioning Section 2, Page 13 where they made projections about the first full year (year two) for golf course operations that indicates to have annual gross operating revenues of $1.54M, 32,712 golfing rounds are required, average green fees amount to $23.25 and would result in a net operating profit after debt service of $283,000.00.
In speaking with the individuals from parks and recreation, Mr. Fruehan advised that they wanted to be competitively priced as it relates to golf facilities that currently exist within what they defined as the primary market (facilities existing within a fifteen mile radius of this site). Mr. Fruehan advised that the $23.25 green fee represents an average green fee. He explained if they looked more specifically at the financial assumptions of the study, a weekend green fee is approximately $35.00 and $10.00 per person for a cart. Mr. Fruehan advised that the majority of rounds played at a public golf course are not eighteen hole rounds. He explained most rounds that are being accumulated at golf facilities are nine hole rounds which make up roughly 60% as an average within southeast Michigan of rounds played. He continued by stating that the other 40% plays eighteen holes and that results from heavy league activity, and senior and women play. He reported midweek and midday play is generally nine hole rounds, afternoon leagues play nine hold rounds and the majority of eighteen hole rounds occur on the weekends. Based on that, Mr. Fruehan advised that the $23.25 fee is an average. Regarding number of rounds, Mr. Fruehan reported he is very specific in the study about how those rounds are determined. He explained the assumptions are calculated by preseason (summer or peak time) and post season as it relates to number of days of golf that are available, number of days that are weekday versus weekend play, number of hours available and number of rounds played. He added that the assumptions are conservative because he does not want to overstate his studies just to sell golf. He explained his purpose in providing feasibility studies is to be objective. Therefore, he is objective from the moment they are retained in the way he addresses their studies and in the work that follows. Mr. Fruehan added that he tries to be as accurate as he can, but added there are assumptions made for the purpose for determining and giving some insight to the client about whether golf makes sense. Mr. Fruehan continued by stating that the major focus of this market and feasibility study is to determine whether golf will be supported, how will it be supported by the demographics as they exist currently and as they are projected to exist within the City of Novi and what is the defined primary market.
Then Councilwoman Lorenzo understands that 32,712 golfing rounds a year is not ambitious and that Mr. Fruehan is confident that number is achievable. Mr. Fruehan agreed.
Councilwoman Lorenzo asked whether Mr. Fruehan is confident that the projected annual revenue is accurate if that formula is used? Mr. Fruehan believes if they look at the entire budget as it is put together and they use it as a guideline, then his estimates would be accurate. He added that there are outside substantial influences that are uncontrolled variables and number one would be mother nature. He explained the weather they have been experiencing for the past two years and this weekend (mid-sixties, clear and sunshine) is conducive for golf courses as they exist within Michigan. However, he noted usage will be affected if they experience long wet springs and summers, and that will ultimately impact gross revenues. He continued by stating that the other influences are philosophical and operating questions that the city must address in terms of what they want to achieve.
Councilwoman Lorenzo understands this is somewhat of a risky proposition and there are no guarantees that the city will earn the revenues that are projected. Mr. Fruehan replied that he cannot guarantee that those are the exact dollars. However, he is comfortable in the projections that are made. Concerning the industry as it relates to the State of Michigan, Mr. Fruehan reported that the state has been the number one state in the nation five years in a row in the construction and the opening of golf courses. He then asked Council to consider how many golf courses have failed in Michigan? He continued by stating that for those who are active golfers, can attest to the current supply and demand as it relates to the ability to get on a golf course whenever they wish. He explained if a golfer does not make tee time reservations from five to seven days in advance of playing, the chances are that the golfer would not be able to play. Mr. Fruehan believes any business is a risky proposition, but the important thing is how they manage and effectively plan for the risks that they can best identify.
Councilwoman Lorenzo understands that the $788,750 is a financial assumption that the city is going to contribute for preliminary development and start up costs. She then asked how was that amount determined and why wasn’t it included in the bond issue. Mr. Fruehan replied that when the financial assumption was prepared they first evaluated development cost as it relates to construction. Mr. Fruehan explained they conducted what is known as a routing plan. He continued by stating that within that plan they are able roughly to estimate quantities of earth that will be moved, the amount of potential clearing that would need to take place and how they would construct the golf course based upon their understanding of what parks and recreation would like to see as a quality level. From that, Mr. Fruehan reported they prepare a construction budget. As it relates to operational, Mr. Fruehan advised that the numbers that are within the operational pro forma are very specific. He explained that he and Martin Fuchs followed a line item basis within their pro forma as it relates to golf course operation (i.e., seed, labor equipment, repairs). Mr. Fruehan stated they are very comfortable with those numbers as they relate to operational costs in terms of the objective of the quality level that the city would like to see. He added this also includes the staffing levels for the pro shop, and for food and beverage. In regard to the financing, Mr. Fruehan reported that he worked with a bonding company for a project in Indiana, and asked that they provide some numbers based upon knowing their operational costs and the net profit. With that, Mr. Fruehan reported that the numbers represented for financing are preliminary and he added that they were not aware of any specific details as it relates to the city’s bonding capability or who the city works with as a bonding agent for municipal bonds. Mr. Fruehan advised that the number represents a cash break even point. He continued by stating that there are things that can be done as it relates to either taking on additional debt in bonding to cover that, they could adjust things as they relate to development costs or they could make adjustments relating to operational (i.e., fee setting and/or staffing). Mr. Fruehan advised that the financial portion was presented to give the city an idea of some general assumptions of what they could expect to see. In addition, Mr. Fruehan advised that many times when they move from a feasibility and a market study, if the city makes the determination to go forward, now is the time that they would get into in depth projection studies as it relates to a specific project. He continued by stating if the city wishes to move forward then the next step would be to retain a professional architectural firm. At that point, Mr. Fruehan reported they could then develop more specific construction costs. In addition, at the same time that the city and the parks and recreation can define their philosophies, their goals and objectives as it relates to operation, Mr. Fruehan advised that they would then work with the financial aspect.
Councilwoman Lorenzo is concerned that if the city contributed $800,000, the city would not actually be netting a profit until the fourth full year of golf or the sixth year from construction. Mr. Fruehan believes that is the biggest problem that many people (municipalities, corporations, entrepreneurs) who get involved with golf experience. He explained they tend to overlook being able to service the debt that they have assembled to start a golf course project. Mr. Fruehan reported that it takes approximately a year and a half to two years to build a course, and then another nine months to grow it in and owners must still service the debt during that time. He added that they not only have to service their debt, but they also are acquiring operational costs for staff to provide maintenance. He continued by stating after the seed is in the ground and begins to germinate, they would need a maintenance facility ready and staffed in order to care for the grounds. Mr. Fruehan advised they attempted to represent the bonding in their study as a revenue bond that front loads the interest only as payments until the golf course comes on line. He added since it is a revenue bond and backed by the revenues of the operation, the city would accumulate revenues and would not only start paying their interest, but also their principal amount. Therefore, Mr. Fruehan advised that the $700,000 is nothing more than a plug number representation to show the city that this is what the potential exposure could be. He noted that amount is a minimum and it could be closer to $1.0M.
Councilwoman Lorenzo understands that it takes several years before they will actually net a profit. Mr. Fruehan asked whether she is talking about netting a profit on a yearly basis or on a cumulative basis? Councilwoman Lorenzo is talking about a yearly basis. She restated that she understands that the $788,000 figure would mean that the city would not net a profit until the end of year four of golf. Mr. Fruehan disagreed; he explained that number is included in the cash flow analysis.
When looking at the profits, Councilwoman Lorenzo advised that year two amounts to $283,765; year three amounts to $346,697; and year four amounts to $413,290. Councilwoman Lorenzo stated if the city has already paid $788,000.00 then they would have to back those amounts out before they actually see a profit. Mr. Fruehan conceded that they must back those amounts out before seeing a profit. Councilwoman Lorenzo asked whether it is possible to roll that amount into the bond?
Dennis Neiman of Miller Canfield advised that he has not seen these numbers until tonight and therefore, he did not have any input. He continued by stating that they were developed in a way that is different from how he would have calculated them. Mr. Neiman reminded Council that they spent a lot of time on the ice arena and he would view this proposal in a similar manner. Mr. Neiman reported their job is not to convince Council to do something. He believes their job is to try to figure out the best way for a project to be funded and try to minimize the risk. Mr. Neiman advised that they would have focused in a different way. He explained that they would have built it the other way up because they prefer to back into numbers. For example, Mr. Neiman advised if it were a one year construction, one year grow out with a third year play, they would capitalize two years interest from the day they would issue the debt and roll it into the cost of financing. He explained they would do it this way for a couple of reasons. He reported that the cost capital is incredibly low and the city can borrow at rates that amount to four and three quarters for twenty five years. Consequently, he believes the city could find better uses for their money and he would recommend that they capitalize the interest. Further, Mr. Neiman reported that they would back off investment income. He explained that they make some assumptions about how long they would have that money, invest it and deduct that to give them an idea of what the bond issue should be. Because they would want the project to be self-supporting, Mr. Neiman would recommend that they borrow the start up money. Further, in order to determine whether the golf course would produce profits, he reported it does not make sense to pay themselves back. Of all the golf courses they have worked on, Mr. Neiman reported that they all do make money and therefore, he would agree with Mr. Fruehan on that assumption.
Mr. Neiman believes additional income is largely a function of philosophy and how much the city wants to subsidize is a philosophy behind running the golf course. He continued by stating that if they have one philosophy they would produce a lot of additional revenue for other programs and if they have the opposite philosophy, it will pay for itself. Mr. Neiman would put the money into the transaction so that the city would not contribute at all; he believes a golf course will either pay for itself or not.
Councilwoman Lorenzo understands that they could philosophize themselves right out of the market. Mr. Neiman stated the price points compared with the numbers Mr. Fruehan alluded to are substantially higher. Mr. Neiman believes the question of how much the city subsidizes various groups within the city, whether they will require carts and at what times are philosophical and should not be answered tonight. However, his point in raising those issues is to evaluate how much income they can produce will be a function of that philosophy. Mr. Neiman added that he does not believe they will price themselves out of the market, and that the supply and demand for golf is there.
Councilman Schmid asked Mr. Neiman to explain how revenue bonds affect the city from a solvency and borrowing potential. Mr. Neiman advised there are three basic ways of financing. He explained the first is to finance through Building Authority bonds and noted that is the way they have financed every municipal golf course in Michigan. He advised that the bonds pledge the community’s general fund as a back up security and added that he does not know of a situation when a Building Authority has ever had to go into the taxing power for this kind of project.
Mr. Neiman reported a second source is to vote for GO Bonds and use the revenues of the facility to pay it off. Finally, Mr. Neiman reported the city could issue revenue bonds. He advised revenue bonds are similar to what the city issues for water and sewer. He explained it is a bond which is payable solely from the operations of that particular facility or utility. He added that the bonds do not pledge the faith and credit of the community as additional security, and as a result they will sell at a much higher interest rate. In addition to the higher interest rate, Mr. Neiman advised that the city will have to fund a bond reserve account because the market requires that and it will require the bond issue to be approximately 10% higher than it would be otherwise. Further, because it is a revenue bond payable from the revenues of the facility only, Mr. Neiman advised that the holder of the bond will want dollar twenty, dollar thirty coverage. He explained for every dollar of debt service, they will have to show a $1.30 of net revenues at the end of the year. Mr. Neiman advised it is a much more expensive way of financing. Mr. Neiman asked what does Mr. Bendzinski think the difference in the rates between a Building Authority LTGO and a Revenue Bond?
Mr. Bendzinski is uncertain about whether there has ever been a golf course Building Authority Revenue Bond in Michigan and he would hesitate to give an answer as to the difference at this time. He advised if they took a pure revenue bond versus a limited tax bond for water and sewer, he believes they would be looking at twenty five or one quarter of one percent to perhaps as high as a half percent interest rate differential. Mr. Bendzinski is uncertain about whether they could finance a golf course under a pure revenue bond approach and added he would have to research that question. Mr. Bendzinski would say that there would be some marketability questions that would arise because a golf course would be defined as a nonessential service of the city.
Councilman Schmid asked how would a Building Authority Bond affect the city’s ability to borrow money? Mr. Neiman believes that it should have a minimal impact, if any. He explained as long as the project is self-supporting, it has no impact. However, if the project is not self-supporting, it will impact operations and the way people view the city.
Mr. Bendzinski added that Novi currently has excellent bond ratings and one reason for that is because the city’s debt burdens are at manageable levels. Therefore, he advised that an $8.0M bond issue is not going to put the city in the category of unmanageable debt limits. Mr. Bendzinski reminded Council that the city has the capacity to borrow up to 10% of its state equalized evaluation under its legal debt margins. Mr. Bendzinski does not have those numbers, but he can provide them at another time. He then noted that the City of Novi is far below those limits.
In the past, Mr. Neiman advised that Novi has issued debt in three different ways. He explained the revenue debt is payable from revenues and is self-liquidating. Mr. Neiman reported the second is specific kinds of debt. He explained the city has issued some MTF bonds which are payable from Act 51 monies and the city has issued a number of voted bond issues which are payable from mileages levied because of the vote. Mr. Neiman advised that the third kind of debt that the city has issued is debt supported by specific sources such as the ice arena. Mr. Neiman reported there is very little debt that is really "general fund debt." In fact, Mr. Neiman cannot recall a debt issue where the city has issued debt that is a yearly budget obligation. Further, Mr. Neiman advised that there is no category in the city’s budget that is debt, except that debt which is payable from specific sources for which the city has funded.
Councilman DeRoche understands that a revenue bond is dedicated to the revenues of the project and if the project fails, the bond holders do not get paid; Mr. Neiman agreed. Mr. Neiman added that if the bond holders do not get paid, they can petition the court to take over the project under the Revenue Bond Act.
Councilman DeRoche understands that the other type of bond is one backed by the full faith and credit of the city; Mr. Neiman agreed.
Mr. Bendzinski reported there are two types of full faith and credit. He explained one has a dedicated millage such as the road bonds or fire bonds which have an unlimited millage behind them and the other has a limited tax with full faith and credit of the city in which they would have to pay from the city’s existing charter’s taxing powers. Mr. Bendzinski added that a city cannot raise their taxes over and above the charter limitations.
Councilman DeRoche understands that when the ice arena concept was brought forward, they were called Limited Obligation Bonds; Mr. Neiman agreed.
Councilman DeRoche further understands that a Limited Obligation Bond is backed eventually by the full faith and credit of Novi’s citizens. Mr. Neiman disagreed and explained that full faith and credit is a concept under Michigan’s constitution which states that a city’s resources are available to pay the debt. He advised there are two categories; unlimited tax and limited tax. Mr. Neiman explained that unlimited tax means voted debt (i.e., road bonds, fire bonds) is payable from taxes without limitation to either rate or amount. He added that a city is only authorized to levy what is necessary each year to cover the debt, but it is an unlimited tax. Mr. Neiman advised the second is what is known as a limited tax and the Building Authority debt would fall into this category. Mr. Neiman explained when they say full faith and credit, they are really talking about the general fund and no other source.
Councilman DeRoche understands that the ice arena was backed by Novi’s taxpayers and that every municipal golf course in Michigan was backed with the taxpayers of that municipality; Mr. Neiman agreed. Mr. Neiman explained the reason for that is they were comfortable that the numbers would work and they would get a much lower interest rate. He added that their capital cost was a big component of how much they could generate each year in income.
Councilman DeRoche did not really want to discuss this tonight because they do not have an answer about whether this is feasible at the higher rate of what a revenue bond would be. Mr. Neiman replied that it is not his place to say whether it is feasible or not.
Councilman DeRoche asked whether Don Childs and Associates consulted both private and public courses as to feasibility? Mr. Fruehan advised they did consult both. He added that he has prepared approximately five private feasibility studies and has prepared an equal amount of municipal feasibility studies in Ohio, Arkansas, Michigan and Indiana.
Councilman DeRoche asked how many golf courses did Mr. Fruehan recommend as feasible in the private studies? Mr. Fruehan recalled that he recommended approximately three and the other two were marginal.
Councilman DeRoche asked whether a private or a public course makes more money? Mr. Fruehan replied that a private owner would be more aggressive in their pricing structure. However, he added that they do not have the same capability as it relates to municipalities in the ability to finance debt.
Councilman DeRoche asked whether it would be a similar scenario if the city managed Twelve Oaks Mall. Councilman DeRoche stated that the city could have purchased the land for less would also not have to pay as much tax as Taubman. Mr. Fruehan stated municipalities tend to be less aggressive as it relates to pricing structure and as it relates to continuing price adjustments to cover operational costs because of the fact that the people who set the fee structures tend to be more conservative as it relates to input that they get back from the community. However, Mr. Fruehan also believes that nobody likes to see their fee structures raised.
Councilman DeRoche understands that Mr. Fruehan is saying that the city’s administration and Council will be involved in decisions in the future about who drives a cart and what the fee structure will be; Mr. Fruehan agreed. He explained that the Parks & Recreation Commission will prepare a fiscal budget and with that budget they would recommend fee increases or budget increases as it relates to operation for Council approval.
Councilman DeRoche understands that the course will be operated with a little bit of politics and not what is just good business; Mr. Fruehan agreed that is often what occurs.
Councilman DeRoche asked whether the feasibility study considered the fact that the city already owned the property? Mr. Fruehan said they did consider that fact and that it was significant because they do not have land acquisition costs or the need to fund the cost of land acquisition.
Councilman DeRoche asked whether they appraised the land? Mr. Fruehan advised that they did not have the land appraised because it was not a part of their contract. He added that they are also not land appraisers.
Councilman DeRoche understands that the feasibility of this course would be significantly different if the land had to be acquired in this bond issue; Mr. Fruehan agreed. He explained if they considered the acreage for golf alone at this site and from what the Mayor had mentioned earlier about raw land costs within Novi, and the cost of construction, it would be significantly different. He added that how they would have to service debt through the fee structure would also be significantly different.
Councilman DeRoche understands that the purchase of the property made a significant contribution to the feasibility of this golf course. Mr. Fruehan agreed that it was wonderful foresight to have acquired that land because land is a limited commodity and he agreed with the Mayor that they should not give up an asset.
Councilman DeRoche understands that they used fifteen miles as the parameter of the primary market for the feasibility study. Mr. Fruehan agreed and added that 75-80% of the city’s play will be drawn from that. Further, Mr. Fruehan advised that golfers tend to return to golf courses that they like.
Councilman DeRoche asked how many golf courses are within fifteen miles of Novi? Mr. Fruehan advised that the report includes four counties and there are seventy one golf courses within a fifteen mile radius of the proposed site.
Mayor McLallen interjected, the courses vary between nine hole and eighteen hole public and private courses.
Councilman DeRoche asked what kind of new industry does a golf course attract? Mr. Fruehan advised there is a lot of business conducted on a golf course and people use golf as a legitimate form of entertaining and a place of doing business. Mr. Fruehan added there is also a perceived value as it relates to golf as an amenity within a community. He advised a golf course increases home values and land pricing.
Councilman DeRoche restated he is interested knowing about what industries would be interested in being located in a municipality with a golf course. Mr. Fruehan believes they would view it as a full circle of amenities that is available to their employees, particularly if their employees reside within the community. Mr. Fruehan believes industries look at locating in positions within communities for a number of reasons and there is a value of having a golf course.
Councilman DeRoche understands the fact that there are seventy one golf courses within fifteen miles would not be as much of a selling point if there were a city-owned course; Mr. Fruehan agreed. He added that they also must look at a lot of the existing areas where there is no longer a strong development capability.
Councilman DeRoche asked what other new businesses are created by a golf course? Mr. Fruehan replied companies that supply equipment or machinery for golf courses may be attracted to the area. Mr. Fruehan reminded Council that the golf industry in Michigan is a major industry.
Councilman Kramer noted that the report did not include a prototypical course design. Mr. Fruehan advised the board depicts a routing plan and explained that it represents that of the available acreage on the site that golf can effectively be placed with no safety liability issues from design, it can be designed to a regulation length and it will work within the area so that it does not impact wetlands from the standpoint that they will not need to fill or require mitigation.
Councilman Kramer asked whether they have considered any plan compatible with staying out of the quality woodlands? Further, Councilman Kramer asked if they have studied whether a golf course can be engineered to be compatible with walking and bicycle trails or other passive uses. Mr. Fruehan reported that Don Childs has worked on a number of golf projects that included passive uses.
Councilman Kramer asked if they have considered such plans, does the proposed concept include that consideration on this site or is it something that needs further study? In reality, Mr. Childs advised the study is a feasibility study and to design this golf course with that consideration would require more time on the site.
Councilman Kramer stated he is talking about combining compatible uses. Mr. Childs advised that one can only mix compatible uses to a certain extent because of liability factors on a golf course. He added that there are many courses that have peripheral hiking/biking trails around the courses.
Councilman Kramer asked whether the proposed layout is compatible with those kinds of ideas? Mr. Childs advised it is and they have attempted to avoid the trail system shown on the Master Plan so that it could still function.
Councilman Kramer asked whether they considered the quality woodlands? Mr. Childs advised that there is enough land in that general area that he believes that they could avoid that major woodland area. However, he noted that they did not have a good mapping of that area and may have infringed on it somewhat in this study.
Councilman Kramer understands that the consultants feel fairly confident in making these statements; Mr. Childs agreed and noted that they have walked the site, and are confident that this will fit the site as stated.
Councilman Kramer understands that they could work with the community to configure a course that could meet multiple objectives; Mr. Childs agreed.
Councilman Kramer believes it would be important to have additional studies conducted by the Parks & Recreation Commission that considers this piece of property and the various uses that are considered on the comprehensive plan to determine which uses should come when. Councilman Kramer would like the other uses to be in place before the golf course and ready for use as the course is constructed.
Councilman Schmid asked what impact would a golf course have on this environmentally sensitive area? Mr. Childs advised that every course they have built has wildlife integrated into it by its very nature. Mr. Childs continued by stating that the Audubon Sanctuary Program is an extremely beneficial program in setting up a golf course and working toward keeping the bird and small animal populations and their habitats viable.
Councilman Schmid asked whether golf courses use pesticides or fertilizers? Mr. Fruehan introduced Martin Fuchs and advised that he was responsible for bringing Oakland Hills Country Club to the standards of the USGA and the PGA for both the Seniors Open and US Open. Mr. Fruehan added that Mr. Fuchs was a superintendent for a number of years and has a wonderful background as it relates to this kind of question because he has a strong working knowledge about how golf courses work with the environment.
Martin Fuchs advised that the use of pesticides is declining in today’s golf course management industry. He explained that they are using natural biological controls that are available to control the turf grass diseases that commonly occur on golf courses. In regard to fertilizers, Mr. Fuchs advised that the Audubon Sanctuary Program with Michigan State have set specific guidelines that fertilizers, weed killers, insecticides and so forth cannot be applied within a buffer area that would surround the wetlands where they allow the turf to grow tall and natural. Consequently, Mr. Fuchs reported that concern is minimal.
Councilwoman Lorenzo is glad that they are discussing the environmental issues because the report did not provide much detail about what impact a golf course would have to the environment. She added that the study also did not include any commitment to become certified under the sanctuary program or in this case, she believes a better program would be the Signature Program because they are still at ground zero. Mr. Childs advised that issue would be a part of the city’s philosophy.
Councilwoman Lorenzo is hopeful with the city’s commitment to natural resources and the environment that if they are considering any course, that it would uphold environmental protection. She suggested the Signature Program because it involves the Audubon Society with the design of the entire course.
Mayor McLallen believes before Council can move forward that they have two major issues of philosophy to resolve. She explained one is the economics of the course and the other is the environmental management of the course, and those issues will be discussed in the next step.
Mr. Childs reminded Council that they conducted a feasibility study about whether the golf course is physically feasible on the site and whether it is economically feasible on the site.
Councilwoman Lorenzo noted that the report included certain assumptions and provided a philosophy of its own in the report, and now they are talking about the environmental philosophy or the lack thereof. She continued by stating that she does not believe there was enough emphasis on the environment.
Mr. Childs would be happy to redo that section now that he knows how important the environmental aspect is.
Councilwoman Lorenzo asked what is the total acreage of North Novi Park? Mr. Davis advised they took into account all the property under ownership of the city and that amount also included property to be assembled as part of the storm water management program. Further, Mr. Davis stated that there is property in the northwestern section that is currently being used for mitigation purposes (59 acres) and there is property to the south of that area that is parallel to the Oakland County treatment plant access road. He noted that there has been discussion about a site for DPW and things of that nature that will also impact some of the areas. Mr. Davis reported the overall site for the golf course was comprised of approximately seven properties and a part of the bond acquisition was about 440 acres. Of that amount, Mr. Davis advised 19 acres is Shawood Lake. He continued by stating that open space area, meadows and buildable areas amounts to approximately 185 acres. He added that the wetland areas amount 165 acres and the woodland areas amount to 69 acres. Mr. Davis reminded Council that this is a routing plan and those things are very preliminary as far as how they will actually be in place when the course is developed. Mr. Davis stated the areas to the north that are outlined with trails, nature centers, boardwalks and overlooks are usable areas, but some may be considered to be in wetland areas. Therefore, to specifically say there is fifty acres of uplands that is not a part of the golf course would be difficult to determine until they have prepared a detailed site plan.
Using the study as an example, Councilwoman Lorenzo asked how many acres of the park were used for the proposed course. Mr. Childs believes there is approximately 160 to 180 acres in actual golf area, but it evolves around wetlands and forested areas.
Councilwoman Lorenzo is talking about the actual greens. Mr. Davis believes that amounts to approximately 160 acres.
In terms of the overall acreage of the park, Councilwoman Lorenzo asked how much more buildable, non wetland areas would there be for other types of park development. Based on this initial layout, Mr. Davis stated that could vary anywhere from 30 to 75 acres.
Councilwoman Lorenzo asked whether they know how much of the land included in the 30 to 75 acres would be regulated. Mr. Davis does not have a definitive answer on that based on where things would go and the actual mapping of those regulated woodlands.
Councilwoman Lorenzo asked whether they are using what is now known as the mitigation area on West Road as part of the park? Mr. Davis replied that until they know what the other city projects are, it is on their board. However, he added that they have to revisit it when they develop a more defined planning of the park.
Councilwoman Lorenzo asked whether it is included at this point? Mr. Davis advised that they are currently including it and once the mitigation site is done, that will determine what is usable and for what purpose.
Councilman Kramer understands that the mitigation property will be used for mitigation purposes. He then asked whether there is a way they can creatively construct it to be an amenity and a part of the park? Mr. Davis replied that was a part of the process when they included it in the overall site layout and master planning.
Councilman Kramer would hope that they would design that mitigation area as a city amenity and not just as an area to put wetlands. He explained he would like to see them configured in way that would lend for other enjoyment. Mr. Davis agreed and added that they believe it is an asset where it would be developed as a passive recreation facility (i.e., viewing area).
BREAK - 9:30 p.m. until 9:40 p.m.
Sarah Gray - 133 Maudlin, thanked Council for having this meeting. She believes the meeting has been informative and asked that Council continue to keep them informed and part of the process. Ms. Gray is speaking on behalf of the combined LARA and SES Homeowner’s Associations that is now known as Lakes Area Homeowner’s Association and advised they are demanding an environmental impact statement. She explained they have major concerns about what is going on with this area and added for this study not to include all of the golf courses in the area is to ask Council to make a decision without having all the facts. Although Ms. Gray believes it makes sense to use the best of the property for the golf course, she is concerned that the rest of the property is under water. She reminded Council that the citizens understood that the land was for a park in 1993 and added that she is not against or for a golf course. However, she is concerned because the citizens are not being asked to approve this by a vote. She believes the city is spending the taxpayer’s money like they did for the ice arena. She said if they had asked her about the ice arena she would have said yes, but she firmly believes the city has to ask the citizens. She believes it is called taxation with representation.
Ms. Gray also has a major concern about the wetland area. She explained the North Novi Retention basin has been cited for every project proposed in the past five years. Ms. Gray understood they were going to put a dam at Twelve Mile and that would increase the water depth by five feet. She asked how much more of this prime land will be under water? Further, she asked if those that need the water basins will now be cut off for the benefit of a golf course. She then asked where on the map is Shawood Lake now shown as a lake? Ms. Gray wants to know which plan are they using. She asked whether they are going to show the amphitheater or the banquet facility?
Ms. Gray restated whatever they do, they must have an environmental impact statement. She believes thirty million gallons of water is a lot of water when they consider that the wells in that area are going bad. She asked what is this going to do to the aquifer and the people downstream in the aquifer. However, Ms. Gray believes EIA will address that.
Bob Willkins - 23803 Ripple Creek Rd., advised he has been a Novi resident for thirty six years. He advised that when the citizens were asked to vote on parks in 1993, it was implied that the land would be developed as a passive park. Mr. Wilkins continued by stating that he and his wife spent four and a half years touring the country and the recurring theme is once the land is gone, it is no longer obtainable ever again. Mr. Wilkins has listened to the various explanations about dollar costs and understands they are very preliminary. However, he restated that the citizens voted for one thing and now the city is talking about financing something that was not voted upon. Mr. Wilkins can appreciate the problems of finances and having to have enough revenue to provide the sources, the facilities and the programs that the city wants. Mr. Wilkins believes quality of life is a major part of amenities, but quality of life is also sometimes peaceful quality of life. Mr. Willkins believes the city needs to decide whether they are in business for profit and that some people believe philosophically that government is not meant to be in business for profit.
Brooks Decker - 46130 West Rd., has been a Novi resident since 1985. He stated he is an avid golfer, but he firmly opposes the construction of this course by the city. He explained he philosophically believes that there is absolutely no place for government to be in any profit driven business. He believes the city is there to provide services that the public is not capable of providing for themselves through the private sector. Mr. Decker does not care what municipality owns a golf course or how much money they make at it. Mr. Decker continued by stating if they want a golf course they should buy the property and pay for their own feasibility study by using their own risk capital. He added if the city wants to use his capital, then they need to put the issue on the ballot so he has the opportunity to say no.
Chuck Tindall - 2453 Shawood, believes tonight’s meeting raised a lot more questions for him than he will get answers to. Mr. Tindall agrees with Mayor McLallen that this study session should be a time for Council to ask questions about the feasibility study. However, Mr. Tindall reminded Council that all of Novi paid for this study and asked when will the citizens get their turn. He continued by stating that based upon what is said tonight, he believes that would be the next logical step. Mr. Tindall further believes before they do any more fact finding that this issue should come before the citizens. Although Mr. Tindall personally believes that the North Novi Park should be a nature park, he would never be so selfish or arrogant as to force his opinion on others. Mr. Tindall asked when will they have a public hearing on this issue? He continued by stating that although he opposes a golf course on this site, he is more than willing to let the citizens decide.
Rawland Storm - 48114 Rushwood, is concerned about taking usable parkland because there is not much vacant land left other than the land geared toward sports recreation. Mr. Storm also believes the signs for parks are inadequate and the parks are not easily assessable. Mr. Storm continued by stating that the current sign that has probably been there since 1993 states, "Purchased with Municipal Funds to enhance our quality of life." Mr. Storm believes some may think that quality of life means having a golf course. However, he does not believe that is what quality of life means and is satisfied with what they have. He continued by stating that he believes that area has the potential to be a very unique property that is worth preserving and he does not believe a golf course is unique.
Elaine Gasaway - 44669 Kerri Ct., advised she has lived in Novi for sixteen years and there has been talk of a golf course ever since she moved here. Ms. Gasaway agreed that the ballot for the 1993 bond issue did not specifically state that the park would not be used for a golf course. However, Ms. Gasaway wishes that she had saved the campaign literature in favor of that proposal because it did indicate that a golf course would not be constructed on that site. Ms. Gasaway does not believe golf is a family activity. Further, this park land cannot be replaced and she believes it should not be used to put in a golf course because they may find other uses for it in the future. She also believes the city disregarded the citizens’ wishes with the ice arena. She explained that there were a lot of people who wanted the opportunity to vote on that issue. She continued by stating if they give the citizens the opportunity to vote on the golf course, those who are opposed will accept the will of the city, but they need the chance to say yes or no.
Todd Gerhart - advised he is a Novi resident, and general manager and golf professional for the Maples Country Club. He added he is also a 1998 National Sectional Qualifier to the US Open. Mr. Gerhart advised that golf is an expensive hobby, but the Maples permits children to play for free. Mr. Gerhart added there is no junior golf program in Novi and he sends young golfers to a golf course owned by the City of Dearborn. In regard to a municipal golf course, Mr. Gerhart believes the property should be leased from the city and in return for a flat fee in order to take the risk away from the city. In terms of construction costs, Mr. Gerhart stated they recently had asphalt cart paths installed and the cost has doubled since the quotation they received two years ago. Further, Mr. Gerhart believes there is a good reason why Farmington Hills recently spent $8.0M to add nine more holes to one of their courses.
Peter Hoadley - 31084 Arlington Circle, advised he has lived in the Maples for more than eight years and has seen the progress that their community has made since the golf course was constructed. He explained when he first moved in the wetlands and woodlands were a disaster area. However, since the golf course has been constructed, the woodlands have regenerated themselves and the animal habitat has tripled. He reported they have a world class bird sanctuary with hundreds of thousands of birds including a colony of egrets. Mr. Hoadley added that they also have deer on the site. Mr. Hoadley reported he is a member of the Board of Directors for the Maples and advised that 256 of the residents support the proposal because they believe a golf course would be another amenity for the city. Although he believes golf courses are environmentally friendly, he still believes an environmental impact statement is a necessity. Further, Mr. Hoadley believes golf is family recreational facility. He advised that he plays with his grandchildren, husbands and wives play together, brothers and sisters play together and so forth.
Debbie Bundoff - Novi and Twelve Mile Rd., stated the city had a great deal of time and money put into what she believes was known as the Rhythms Linear Parkway that made this area a nature type park. Ms. Bundoff would hate to think that the majority of that site plan which was put forth could not somehow be incorporated if this city decides that it must have that golf course there. Further, Ms. Bundoff recently had the opportunity to take an out of town guest to the park and he was amazed that people cannot drive through there because a gate blocks the road.
Mike Haynes - 112 Maudlin, favors saving the last natural area in Novi. He believes some of the elected officials are not comprehending the importance and value that this last area gives Novi. Further, to deny the future citizens this precious land is the worse judgement Council could possibly exercise and asked that they please put the issue before the citizens.
Mark Adams - E. Lake Dr., understands that there are 185 buildable acres and of that, between 160 to 180 acres will be used for a golf course. Mr. Adams does not believe that leaves much park. In terms of revenue, although Mr. Adams understands that the city will net more than $400,000 over a seven year period, he stated if each citizen were to contribute $10.00 over that same period of time, they would have that same amount.
Councilwoman Mutch asked whether Council could have additional information about similar mixed use park operations (i.e., Kensington). Councilwoman Mutch is looking for information about compatibility of uses. She explained that she would like to know whether the golf course takes up a well defined area and the other amenities are located elsewhere or are the amenities somehow integrated within the golf course area. Councilwoman Mutch believes they are more interested in integrated amenities. Additionally, Councilwoman Mutch said a number of other communities that have golf courses have been mentioned and comments have been made about the percentage of land they set aside for those uses, the percentage of their budget that is used to cover the operation of maintenance of those uses, staffing and so forth. Therefore, Councilwoman Mutch asked if there are some real numbers available, then she would like to know what they are able to do in the real world with real dollars and real demands from the community as far as services are concerned.
Councilman DeRoche is glad that Council held this study session because he did get the additional information that he wanted. However, he thought there would be more discussion from Council, from Administration or from the Consultants about the value this kind of amenity would have for the community in terms of quality of life. Councilman DeRoche is concerned because the discussion seemed to evolve around the city going into business and it is his personal opinion that the city should get its revenues from tax dollars; not from profits. Councilman DeRoche added that he tried to make a point that the feasibility study for this was based on already owning the land. He stated they all know that this land was acquired by a 1993 vote and without owning that land, this proposal would have a significantly different outlook. Further, he believes Council is elected to make decisions and they should make decisions as elected officials. He continued by stating that he does not believe that the citizens want to operate this city by ballot initiative. However, when he looks at the two polls, a golf course is a very low priority with Novi’s citizens, but he also believes his response would be the same if it came back as a high priority because it was just a poll. He does not believe that is how they should govern. Councilman DeRoche believes that bringing this issue to the voters is important because the purchase of the land was initially brought before the voters. Further, when Councilman DeRoche said he believed a golf course would be profitable, what he really meant was that he believed it would be full and he believes there is a big difference between profitable and full. He added he thinks they would be kidding themselves to think that a city owned golf course would be as profitable as a privately owned course that paid taxes. Councilman DeRoche believes if Council proceeds before taking this issue to the citizens, he hopes that there is some kind of referendum for continuing down this road. He added that they must also realize all the other considerations that will come before Council and the city in terms of owning and operating a golf course. Councilman DeRoche asked that Council discontinue spending money on this proposal until they reconcile the issue of the fact that the citizens voted to acquire this property.
Councilman Kramer believes they should continue to spend money until they have enough information to make an educated decision. Councilman Kramer believes parks and recreation programs are very important to Novi’s citizens. Further, Councilman Kramer suggested that another step should be to schedule a joint meeting with the Parks & Recreation Commission and he would like to have a better understanding about the alternatives that they have looked at for other land uses for this area. Councilman Kramer added that he thinks it is important to know how much mix use they can have because a golf course is not a golf course year round. Councilman Kramer also believes the question is about whether there should be a golf course. He believes they first need to understand what is the recreational potential of that particular area.
Councilwoman Lorenzo respectfully disagrees. In her opinion, she believes the city already has a lot of active recreation area (i.e., soccer and baseball); she believes the city is lacking passive recreation areas. Although she does not place full face value on the surveys, she still believes they must consider them and according to the polls, a golf course was not one of the top three choices. Councilwoman Lorenzo further believes that it does not matter what she wants, it is what the people want because they are here to serve the people. Therefore, she believes that the people should have the opportunity to vote on this issue and that the city should not spend any more money until the citizens vote.
It is obvious that Councilman Schmid favors a golf course, but it is not for financial reasons. He believes it is a quality of life issue and that most major quality communities have municipal golf courses for all their citizens. Councilman Schmid added that he has spoken with several owners of golf courses and they encourage municipalities to have golf courses because they can offer youth programs, affordable golf and lessons. Councilman Schmid also agrees that a golf course provides revenue and that revenue could help to provide the money to help develop the passive parks. Further, he believes they are elected to make tough decisions and every issue should not go before the voters. Councilman Schmid added that he would oppose this golf course if they did not have an environmental study or room for passive recreation. However, he believes to use this 500 acres strictly for passive recreation is not doing justice to the total citizenry of Novi. Councilman Schmid believes they should move forward in all haste and agrees that they should spend what is necessary to get the additional information they need to assure that all the issues are addressed.
Mayor McLallen believes tonight’s discussion has been positive and that there is a majority of Council that want to proceed with further fact finding. Mayor McLallen added that she believes it would also be beneficial to schedule a joint meeting with the Parks & Recreation Commission and that one major concern has been what is the true proposed usage of the entire property. Consequently, there is a lot more information needed about other recreational possibilities for this property. Mayor McLallen added that the other major issue is financial and advised that Council is holding a financing study session on the bond process in early November.
Because of the member changes, Councilwoman Mutch asked whether the Parks & Recreation Commission could schedule a meeting to discuss this issue and then come prepared to a joint meeting with some sort of consensus of its current members. Councilwoman Mutch reminded Council that the Commission has experienced some turnover and she does not know how long it has been since they have discussed this issue.
There being no further business before City Council, the meeting was adjourned at 10:40 p.m.
Mayor City Clerk
Date Approved: November 23, 1998