by Frank Leeming, August 21, 2019
Balboa course, clubhouse are new challenges for property owners
For the sake of discussion, let’s assume we think it’s a good idea to spend $4.8 million to bring Balboa Golf Course up to standard as proposed today by the POA staff.
For this discussion, let’s also agree to put aside any discussion of either rehabbing or tearing down the Balboa Club; too many decisions have to be made before talking about it makes any sense.
The golf course is something else.
Balboa is one of our premier courses. It was built in 1987 – 32 years ago.
It was built on the cheap by Cooper, which is one reason it has been so expensive to maintain with duct tape and baling wire. The irrigation system has been a joke for decades.
Keep this in mind: In 2005, property owners approved an assessment increase that was expressly sold as a funding source to bring Balboa up to date. That was 14 years ago and the course was on hard times then.
Some say the POA reneging on the Balboa promise was the beginning of the distrust between property owners and the POA.
How do we pay for it?
Anyway, back to today’s question: Assuming we want to fix Balboa, how do we pay for it?
Let me offer two ways: First, a golf surcharge. Over a period of about a decade, golfers paid a $2 surcharge on every round we played to pay for construction of the Magellan, Isabella and Granada golf courses. It was a great investment for the POA, and golfers – who benefitted the most – helped pay for the work.
It should be the first source of funding for Balboa, but instead of $2, the surcharge should be $4 a round.
Last year there were 216,714 rounds of golf played in the Village, which is way down from the 300,000-plus rounds we had every year through 2008. But still: a $4 surcharge x 215,000 rounds = $860,000. So golfers could pay for rebuilding Balboa in 5.6 years.
* * *
Clubhouse is another matter
Fixing up or rebuilding the clubhouse is another matter. Either way, it will cost millions of dollars. First property owners and the board have to decide what they want the site to be – a 19th hole for golfers? Headquarters for the police department? An activities center? Part of a convention center?
Or should the existing 21,000-square-foot building be torn down and replaced with something maybe half the size? Or should it be upgraded to meet code and made usable again?
For many of us, the Balboa Club is synonymous with great memories – after-golf fellowship, great meals, community meetings. For many years after it opened in 1988, it was THE place to go in the Village.
Regardless of the direction the board decides to go now, it’s going to cost money. So let me toss out one of former CEO David Twiggs’s best ideas, one that never got any traction: Buy-in fees.
Twiggs proposed adding, say, a $5,000 buy-in fee to the cost of every home sale in the Village, and perhaps $500 on every lot sold.
The idea is intriguing: Existing homeowners and property owners – you and I – have been paying for Village infrastructure and amenities for years through assessments and fees. Why shouldn’t newcomers be asked to share some of that cost?
Over the last three years, an average of 650 home sales have been recorded each year in the Village. If the buyers paid a $5,000 buy-in fee, it would generate $3.25 million a year.
Tracking lot sales in the Village is more difficult, but a board committee studying the issue in 2013 found there were an average of 1,643 lot transactions a year in Saline County between 2007 and 2012, and 1,367 in Garland County.
That’s an average of 3,010 a year.
If there was a $500 buy-in fee on each deal, it would bring the POA $1.5 million a year.
That would be a good way to fund redoing the Balboa Club, and help fill POA coffers in the years ahead.
Clark Vernon responds
Frank,
What are you smoking buddy? The Village is overbuilt on amenities, and has too little population to both support them and needed infrastructure maintenance costs. So you want to further slow down almost non-existent growth and already underpriced resale inventory with more costs? Who do you think will pay these costs? The sellers will have to in order to get their sales! Who has already been paying all these years? The sellers! What are you going to say to those folks? I can’t believe you put this stuff out there!!
And how can you support putting more money in a business that loses money each year no matter what has been done over the assets lifetime(?) – the Golf Courses!! It is a contracting sport and will continue to be until such time as there is a significant population increase to boost usage – Oh, but you’ve just guaranteed slower growth with “Buy-In fees? So who is going to use the newer more expensive Golf Courses?
Now, let’s talk about Golf a little further – we are carrying the courses at cost on our books, plus the millions already spent to renovate at least 3 of them. How can we keep carrying them on our books at these values when they consistently lose money each year. They need to be written down to real value! Put more money in and you’re faced with even further write-downs? Why would any sane business enterprise do this?
Please share my e-mail with your distribution. You are well regarded and this most recent blast of yours is so wrong it can only lead to more wrong for the Village. Please think about it and use your own words for a retraction if it works better for you. Either way, to be fair you need to get a retraction out there!!
Monica Impellizzeri
08/22/2019 — 7:18 am
Sorry Frank I totally agree with Clark on this one. Let me first clarify I’m not a golfer and never will be.
We were just moving into our home when Twiggs tried to pass the outrageous “tax” on homes/lots sold in the village. We were not really paying attention to the management of the village at that time but this proposal definitely caught our attention! Where do you think the village would be now if this had passed back then? We would still be financially stressed. The same people running the show would have squandered the extra funds for their New Urbanism pipe dream!
Repair or replace the golf course now and leave the clubhouse as is. We can’t afford to jump into another costly project without careful study and planning!
Mary Szczepaniak
08/22/2019 — 7:22 am
Clark, I agree with your statement. As I was reading Frank’s post, I was thinking the same thing. I’ve only been here a year & I love it here. However, if I had been told that we had to pay a $5000 buy-in fee, we would not be here.
We were at a Boomer’s Rock Newcomer’s meal last night. Of the 20 or so couples there only one was a golfer. While I agree that the project needs to be done, how does this differ from the pool that so many did not want? It’s not like we don’t have 8 more golf courses. However, I understand that this situation does effect home values on Balboa. But, how many “corporations” continue to invest money into a program that is lno longer generating income, but is, instead, losing money? How many stay in business if they do continue investing in programs not generating ROI? But, then, are we a corporation, or are we a community who needs our amenities?
Gene Garner
08/22/2019 — 8:22 am
Frank, at last a realistic plan to address the golf subsidies and course renovation costs. We have to either raise the extra funds or shutter some courses, your plan is a great compromise. The golfers should help pay for the improvements to their courses and HSV should get out of the food and entertainment business. Any renovation to the Balboa Club should be minimal and also paid for by the golfing community, perhaps like Diamante with a membership fee to eat there
But I also agree with Clark’s argument that we should write down the value of these courses since they are “Loss Leaders”. They are the hook that entices golfers to move here. At this time the golfing community in the Village is too big and too opposed to cut backs for us to gain support for reducing the golf program.
Both Frank and Clark have offered practical solutions to one of our biggest problems and they aren’t mutually exclusive. We can take part of each to make the changes we need to preserve our Village. I hope both continue to work on our problems since we aren’t getting any ideas from the BOD or CEO—Gene
Anonymous
08/22/2019 — 9:05 am
NOT ONE DIME!
I hope Lesley and her legacy BOD members, including turncoat Tormey are reading this blog!
Listen up!
I promise to work and defeat ANY and ALL requests for additional funds from Property Owners as long as Lesley Nalley remains as our CEO.
NOT ONE DIME will I willingly pay for ANY new project while Nalley remains in office. I suspect that I am NOT ALONE and that the majority of property owners have had enough of Nalley’s carefree wasteful spending of our limited monetary resources for her personal gain.
I am so willingly to pay DOUBLE the assessment that I’m paying now, but NOT while the legacy BOD members and turncoat Tormey remain seated.
LESLEY MUST GO!
NOT ONE DIME my fellow friends and neighbors! NOT ONE DIME!
And my highest respect for Diana and Dick for taking on the albatross that plagues our Village! Keep fighting for property owners! We support you 100%!
NOT ONE DIME! Remember that Ms. Lesley the next time you ask us for money!
s vlasek
08/27/2019 — 9:26 am
truer words have never been spoken!
Linda Anderson
08/22/2019 — 9:43 am
Clark is right. Why would anyone want to put so much money ( $4. Mil. Plus) into Balboa when “Golf ” is being subsidized? The other big question, where is the money going to come from? New assessments? The majority BOD/CEO want an assessments raise and approval of this would push the property owners into a corner with more debt. Diana Podwiltz made the right judgement call : Remodel the Building. What is important is prudent and reasonable spending. As Tom Blakeman and Phil Lemler stated : Golf is the answer to raise the amenities but it will take a strong marketing program to make that happen.
Another Anonymous golfer
08/22/2019 — 9:46 am
I live on Balboa golf course … every morning I see a team of workers out on the course performing maintenance to enhance players experience … every afternoon they are back out for more care … so the course is should be in great condition.
Balboa club house … well before moving here I visited and vacationed here many times and enjoyed dining and playing golf here … what I have seen is deferred maintenance … which never should have been allowed.
Will it take millions to improve the golfing experience … playing and dining! I think not if a well planned and executed maintenance plan were developed. Improvements should be made in stages …. repairs first to bring operations up to code/usefulness, then enhancements.
Money … what about fund raising tournaments to pay for enhancements in stages; donations from players and MGA/WGA; other fund raising solutions, et al.
Why hasn’t the golf committee developed a long term plan/solution to increase play … address funding issues, etc.?
Minn Daly
08/22/2019 — 10:14 am
Thank you Frank! This is a person & like minded members that have our community building, not in decline status! We need him on HSV BOD! Let’s get Tom Blakeman petition started & get the legacy BOD out! Leslie Nalley terminated! Respectfully, Minn Daly
Anonymous
08/22/2019 — 10:16 am
I do not agree with the buy in. We have had a beautiful home for sale on Isabella GC for over a year but with the POA being in the real estate business now it apparently cannot compete with the new spec homes going up…..and sitting empty! Until Ms. Nalley and the BOD get their noses out of the business of real estate, restaurants etc. and get them back where they belong nothing will change. Our golf course workers try their best but when they’re paid peanuts we can’t expect them to stay long. If we could get rid of a few of LN’s friends that are making ridiculous salaries and give all our hard working golf crews a raise we might be able to get workers that really take pride in what they do. Golf courses have gone downhill since our so-called agronomist has taken over. Why are we paying these people!?!?
C. A. Achenbach
08/22/2019 — 10:38 am
Frank, adding a surcharge for golf is just putting a spin on a rate increase for golf. Just look where past surcharges went. We never saw rates decrease after the justification for surcharges was complete. Golf will continue to be in trouble due to several factors, including basic economics and changing demographics in the village.
We have an oversupply of golf coupled with decreasing demand. The addition of 27 holes of golf has not helped this balance, neither has the continuous price increases over the past 20 years. You only have to dust off your Economics 101 book and look at a price/demand elasticity curve. Couple that with the present oversupply and the outlook for golf is not favorable. Exacerbating these effects are the changing demographics in the village.
Many of the avid golfers who filled the tee times in the early 2000’s were retirees and have aged enough that they are unable or unwilling to play and pay as much. Also, being on fixed incomes has been detrimental, given each annual fee increase. Recent retirees coming to the Village have reflected the national trend of a decrease in golf participation. Simply put, we haven’t had enough new golfers to replace those we have lost.
These realities are not going away and the only solution will be to reduce the supply by closing courses or increasing golf demand. While it would be impractical to abandon any of our courses, periodic closure would provide some cost relief but would cause some turmoil. A better alternative would be to increase demand.
How to increase the number of Villagers playing golf and encouraging new residents to learn the game is challenging, given the cost of equipment, tee times and effort required. One possible way of doing this would be to offer “free golf for life” on Coronado when tee times are available and provide group lessons, inexpensive or free rental equipment. Cart rental would offset the cost of any increased course maintenance. Villagers finding the enjoyment of golf would soon graduate to playing our full sized courses. This would also be a great marketing strategy….. it works for the Villages in Florida!
NittyGritty
08/22/2019 — 11:50 pm
Achenbach, Thank you for sharing such insight. Some of us did not grow up with golfing parents. I always thought I’d like to play someday. It looks like the perfect sport for retirees. Walking around in the sunshine, twisting and stooping, maybe a cocktail. However, the prospect of spending so much money makes it hard to convince my spouse that we need to try it. I agree with you that if we had a chance to learn it, the odds would be greatly increased that we would be willing to indulge in it.
Peter
08/23/2019 — 5:55 am
Wow. Too expensive to learn?
How sad.
NittyGritty
08/23/2019 — 6:20 pm
Not sad for us, Peter. We’d be just fine without golf and without your derogatory comments.
Anonymous
08/27/2019 — 9:27 am
perfect
Anonymous
08/24/2019 — 11:48 am
Thumbs up!!!
Tom Blakeman
08/22/2019 — 1:08 pm
The Balboa Club needs work, no doubt. The course needs a redo, no doubt. But, just like the pool we do not have sufficient funds for either.
Borrowing money isn’t the answer. Golf surcharges will fail miserably. So, what to do?
1. First read my “A New Plan”. Email me and I can send a copy or it is posted in this website. Among other things, it clearly explains why golf is failing in the Village and what to do about it.
2. Until the recommendations in “A New Plan” are carried out (particularly – especially – the Marketing) any expensive capital projects need to continue to be deferred. We simply cannot afford it.
3. Meanwhile, patch the cart paths and continue to make do. Leave the Balboa Clubhouse As Is.
4. Assemble a new task force of business savvy residents (old guard committee members and POA status quo advocates need not apply) to do an in depth study of Frank’s idea about the capital buy-in idea. Such a plan can work. It has worked for others in a similar situation. It has merit.
Another Anonymous golfer
09/02/2019 — 10:56 pm
Good idea … it would be a good start. Is it true that a committee worked hard to develop a plan … but it was shelved by the director.
Walter Chance
08/22/2019 — 6:02 pm
I think the solution is more residents. Make it attractive for builders to build here. A typical permit here exceeds 8,000. Half the permit fee to encourage builders to build here. Second. Market the Village aggressively so that these new homes are sold quickly. More residents equal more assessments and in some cases, more rounds of golf.
Kirk Denger
08/22/2019 — 9:41 pm
The CEO is purposefully deceitful in declaring that the Balboa club electrical is not to code. She deceitfully claimed that the Fay Jones designed DeSoto Pool was made of cinderblocks and therefore needed to be demolished along with the historic Bathhouse. Frank, we all appreciate your information data, but it is hard to comprehend how you advised everyone to vote yes on all 13 proposals made by the card carrying Communists of New Urbanism. To say that any proposal by Twiggs is “intriguing” only leads me to believe that you also have been drinking the Kool-Aid. The Desoto Clubhouse, Desoto 19th Hole, Desoto Pool and bathhouse, and Balboa Clubhouse are all victims of poor, failure of MAINTENANCE by the management. Where is Twiggs Now? The DeSoto Club disgraceful renovation projected at 2 Million with a pool, ended up costing more than 2 million without a pool and was out of business 1 year later. The Balboa club needs nothing but normal maintenance. Why would anyone think that the building design should change from the Historic Design that was the life of HSV in 1988? Should we all drink the same Kool-Aid and bobble our heads and agree that all buildings built Pre- 1988 be torn down? And then figure out a way to pay for the replacements? A good friend played the Balboa Golf Course last week and immensely enjoyed the course. Maintain what we have, there are twelve steps for getting off your HIGH HORSE.
Another Anonymous golfer
09/02/2019 — 10:54 pm
Agree …
Tom Williams
08/22/2019 — 9:42 pm
Every one is missing the obvious. The Poa building was restored, the Desoto Fire and Police station was restored. And this was done at reasonable prices . You see the solution seems easy . Now we can all agree we are top heavy on CEO this and that titles that do not earn there overly paid salaries. This is not necessary. Let’s step back in time how we used to take care of things .
CUT THE FAT . Hire a crew that works for THE POA , let this Dept. Do the repairs and maintance of all our facilities so we don’t get in the place where we are now. You see we used to have a small crew that did these things , but the Poa shut it down . Talented people to do such things can also take care of golf paths also . Now we have some people but it is not organized properly . Surely we can expand on this idea and work out the kinks. Balboa Club is not as bad as those will tell you . We can fix these things in house with the right people .
Sue
08/23/2019 — 4:19 am
You need to get rid of Troon at $600,00 a year we don’t need that it’s unsustainable. reduced all but 3 to executive 9 hole courses where more are apt to play nine holes, especially drs. and such working professionals. Reduce these unnecessary made up nepotism paid directors of nonsense. All these 18hole courses at one time sold homes, but in todays reality for the game itself it’s not going to be sustainable. Playing golf with houses on top of the game isn’t appealing. Nor is golf homes so close to course, golf balls breaking windows, in yard, no privacy sitting outside. With golf cart trails nine holes and keep green space around courses, repurpose that for couple golf lots or other activity. Nine 18 hole courses won’t sustain here or anywhere for that matter. Villages in FL plagued with sink holes and more gators than ever before on courses. They aren’t as desirable as you all think, coming from Florida never here many flocking to the Villages anymore, land is sink hole prone and homes have to have sink hole insurance atop hurricane. Golf is not coming back especially for development country club private courses.
Lis
08/23/2019 — 12:43 pm
We moved here 1 year ago and have read and listened to ideas and concerns during this time. Our move was to be near an aging relative. Beyond that the appeal of the beauty of the surrounding nature, the golf courses and lakes was a draw.
Many of the posts have discussed promoting the village to those who would find the amenities named above as appealing. Combine it with the low real estate taxes, beautiful nature and pleasant winter weather and there are true benefits to living here.
As residents are there any bylaws that would not allow individuals or groups supporting the village to do their own marketing of Hot Springs Village?
Social media marketing has been very instrumental in gaining positive results. As a group promoting a positive image,
realty companies have the opportunity to gain the interest of potential new residents through this type of promotion to retirees of other areas of the country that would be drawn to the Village lifestyle. Paid Facebook ads or search engine optimization could help to draw more residents here.
Growing the population of this large community with people that will automatically support the current amenities will help to support the cost of maintaining them.
Opportunities for residents to take on part of the maintenance costs by adding new businesses to contribute to the lifestyle of our community would be another avenue of additional revenue through property leases and taxes.
These businesses could also add to the affluent gated community yet affordable lifestyle amenities for the residents.
Inside our village gates there is very little in the way of shopping opportunities. As many of our residents like to support businesses here I think they would be well received. Outside our gates the options are minimal as well.
For many months I sought to obtain a location to open a boutique here in the village. Options are very few.
I even tried to contact the POA about renting part of the Balboa Clubhouse as a way to utilize the empty space and offset their renovation costs. My message was not returned. With additions of businesses like that, other opportunities could arise. The restaurant facilities could have been opened to someone wanting to open a tearoom or breakfast and lunch type facility adjacent. Gaining more income to offset renovation costs.
I applaud the efforts of the new little grocery store, and other businesses that have opened in the Village and hope that the residents support them.
I do not think that charging a fee to people buying a home here is a good idea or that it would generate the revenue suggested. Many of the homes sold here appear to be residents moving to another home inside the village.
The clubs and churches here provide many opportunities for fellowship and worshipping and are a very positive asset to the community!
Just a few thoughts to add to the others offered.
If you see a positive post about the village think about sharing it!
Have a wonderful day!
Anonymous
09/02/2019 — 11:03 pm
You are not the first one that wanted to locate a business at Balboa … which is obvious one way to fund improvement … but the obvious plan is to tear it down!
Deferred building maintenance is a kiss of death … look at all the government building across the country that have were never maintained … and are now being sold for pennies … to investors.
Our POA should have a dedicated building maintenance crew … !
Lou Ann Ann Armentrout
08/23/2019 — 10:17 pm
My husband and I moved to HSV in Feb. 2019 and we are both avid golfers. That was the draw for us to move here! Although we have owned a lot near Cortez since 2000, it was not cost effective to build a house with so many available. That said, we bought on Balboa GC. I have personally spoken with many residents who also own lots. Given the current real estate values, the lots are nearly worthless compared to what we originally paid. I agree the marketing strategies seem weak, and had we not owned a lot already probably would not be aware of HSV. The majority of friends and family have never heard of HSV, compared to the Villages in FL. By the same token, if HSV were to explode like the Villages, resIdents would NOT be happy with that type of growth. Therefore, in order to keep our quaint, quiet community intact, the only solution is to raise fees to residents present and future, AND to get a grip on the spending of such funds. An example of mismanagement would be the fees already raised for Balboa since 2005. Where is that money and if it was earmarked for this project, what happened to it? Seems to me rather than the board arbitrating each other at our expense, someone needs to investigate the mismanagement already done. Perhaps the newest board members raised those questions and that is why there is dissension?
Anonomyous
09/02/2019 — 11:04 pm
Good point … !
Ruth Smith
08/27/2019 — 7:49 pm
The Balboa Club was always a favorite here in the Village. The lounge area is still a favorite with many. The restaurant was closed after two mismanagement’s, that were assigned by the POA. For some reason a new manager was never found to reopen it. At one time moving the POA offices to that area was a consideration. Unlike the DeSoto Club, it had not been damaged by flooding or any other disaster. It was just closed because of mismanagement by people under POA contract for the restaurant area. It was and still remains a wonderful restaurant facility and the only one we have that can handle larger groups than the DeSoto Club can handle.
It seems strange that a LODGE is needed for LARGE golfing tournaments and yet destroying the perfect place to hold banquets for these large groups is being considered. Yes, the outside of the building sadly needs repair and care due to the neglect of the POA maintaining over the past years. Why this was allowed to happen is a mystery to me unless it was to give more weight to “just tearing it down”.
I hope that the fact that it will give some competition to the new “Last Chance” and Bee Hive does not an unfair influence with the board decision.
There must be a solution, other than loosing this facility. Possibly, fixing up the club house and upgrading just nine holes at a time on the course. I played Balboa last week and yes it does need some help but it played very well and is still one of my favorite courses. I miss being able to go there for breakfast and a meal after playing. It’s more centrally located than many of the other courses (Granada, Isabella, Ponce) which is an advantage for many Villagers.
For many of us that have been here for some time, it was the Balboa Club that caught our interest and helped make up our minds that HSV was where we wanted to be for the rest of our lives.
Anonoymous
09/02/2019 — 11:11 pm
The truth … the favorite courses given the most care and attention is Granada and Isabella. The HSV courses are managed by a tier system with Granada and Isabella ranked tier 1 … Balboa and Coronado tier 3 … and why the club house has been neglected and the course needs a face lift.