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Special report: Moorhead embraces home construction to keep improving

The horizon is changing at the Meadows Golf Club. In the distance, the framework of a new middle school protrudes from the ground. Next door, new homes are being constructed as quickly as they can be financed in a residential addition bearing the...

The horizon is changing at the Meadows Golf Club. In the distance, the framework of a new middle school protrudes from the ground. Next door, new homes are being constructed as quickly as they can be financed in a residential addition bearing the same name as the golf course.

This once secluded plot of land on the eastern edge of Moorhead is now a hub of expansion. All in the name of progress.

"It's unfortunate, but eventually it'll all be surrounded by homes," said Mark Johnson, resident pro at the Meadows. "Nothing you can do about it."

Nothing except embrace the economic development, which is what the city of Moorhead, in part for the sake of its golf courses, plans to do according to City Manager Bruce Messelt.

Excluding debt services from a 1994 bond, to be repaid at approximately $370,000 per year until 2021, Village Green and the Meadows combined to make $569,859 from 2000 to 2002.

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That's obviously good, Messelt said, but not the entire picture. 

Finding more money

Since January, the state of Minnesota has been cutting and rearranging public programs to make up for a $4.56 billion deficit. The city of Moorhead alone has trimmed seven jobs.

While the golf courses are a part of the city's Park and Recreation Department, they are operated independently as an enterprise fund. That means, barring drastic excesses or deficiencies, the city neither takes nor pledges additional money to them.

So, excluding any more severe statewide cuts, Village Green and the Meadows will not lose funding or personnel.

However, that also means the courses, which compete with other departments such as fire and police for additional city monies, aren't likely to see extra cash for improvements.

"We're all trying for the same pot of money," said Holly Heitkamp, director of recreation.

The obvious solution is to find more money. That's where the golf comes in.

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Courses attract homes and people. A larger population means more business for the golf courses and a broader tax base for the city. One project calls for brand new 31 condominiums south of the Meadows, and that's a fraction of the expected growth, though exact numbers are difficult to project, Messelt said.

"If it pays for itself and we don't spend money on it ... ," Heitkamp said. 

'Pay as you go' policy

Messelt calls the policy "pay as you go." The best example is already underway.

Through the sale of the land on the 18th hole to Eid-Co, an area developer, Village Green was able to raise $440,000. That was enough money to finance an extensive (and primarily in-house) renovation of its back nine, including changes to six holes, a new irrigation system, an improved drainage system and 5,000 feet of new cart path.

"I take the money and do the renovation," Messelt said of the philosophy, "and I'm not adding to the debt."

The Meadows followed suit, adding a minimal surcharge of 50 cents per round to finance a walk bridge between the 10th and 12th holes. Such fees are common practice in the golf industry, and help offset a lack of funding. The Moorhead courses have zero money in the 2003 budget for capital improvements.

"That was a way for us, because we haven't had capital money to do anything," Johnson said. "We need to do something. We need to show we're making some improvements."

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The market is competitive, though the Moorhead courses boast solid business. They've combined to average 64,401 rounds per year from 1996 to 2002, performing especially well in flood years, as courses in neighboring Fargo are more susceptible to damage.

Weather can play havoc with Moorhead courses though.

Rainy years are especially financially dry for Village Green, which retains sitting water. That explains the incoming drainage additions. The Meadows, meanwhile, currently the only links-style course in F-M, becomes exceedingly difficult when swept by any wind stronger than a breeze.

According to Johnson, the course has made a concerted effort to host corporate events and tournaments, groups of people that "have to play."

What if revenues don't match expenses?

Any profits go directly to the 1994 bond, which paid for the Meadows and the back nine at Village Green. The courses also earn interest -- as high as $342,070 in 2001 -- on the cash balance of a reserve fund. Any shortfalls can be overcome through withdrawals from the storm water utility fund -- available because the courses were designed for retention of neighborhood water runoff -- or a retired debt service fund.

Those withdrawals are kept to a minimum, said city Finance Director Harlyn Ault. Of the $1.653 million of expenses in 2002, and that includes $370,000 toward the 1994 bond, only $160,000 was transferred from available reserves.

"I love what's happening," said Village Green pro Russ Nelson. "The new holes are going to make this even better. It just seems like every year they're doing something here." 

An idea that failed

There was, however, one proposal recently bypassed.

In 1994, in conjunction with the Village Green expansion and the construction of the Meadows, then Moorhead City Manager James Antonen announced plans to also build a 9-hole executive/junior course on 20 acres adjacent to Village Green. It was to have opened in 1995, paid for by some of $800,000 left over from the original Village Green project.

That never happened, and recent widespread turnover of city officials makes it difficult to determine why. But Johnson, searching for a home for Moorhead's junior program of 300-plus kids, resurrected the idea in 1996. Two years later he secured a $50,000 grant from the USGA to help cover the cost of tees and greens.

Then, through the USGA, Johnson was directed to J.S. and Associates Golf Course Design, a southern Minnesota firm that offered to build the par-3 course and complete the current Village Green renovations for no cost in return for a shared lease or shared revenue program with the city.

"It's a great idea, and I would be supportive," said Messelt, in his first year as City Manager, of building a 9-hole course. "And Mark felt he could make it go."

Acquiring land proved the biggest hang up, according to Messelt the city was unable to acquire seven acres near Village Green that were essential to the project. Also, the area would have needed rezoning approval.

Instead, the USGA grant expired in December.

"The timing wasn't right," Johnson said. "We had a proposal for land on the table, it just seems like there was an opportunity, probably in '94 that wasn't taken, and even a couple years ago. It just isn't a priority."

Part of the equation

Eventually another course will be a priority, Johnson hopes. Someday the population will exceed the capacity of two golf courses, and call for another.

Until then:

"You continue to work to find opportunities for improvement and efficiency and those kind of things," said Scott Hutchins, Moorhead Community Services Director. "It's sort of par for the course."

The city's courses are better than par, according to Messelt, who formerly worked in the golf haven of Tucson, Ariz. He described Village Green and the Meadows as ventures that are "in very healthy shape" and offer "a reasonable round at a reasonable price at a reasonable location."

Operations could be more efficient, added the city manager, a 23-handicap. But rather than saving costs by letting the roughs grow or hiring retirees instead of full-time employees, the courses of Moorhead will attempt to raise revenue by offering two-course season memberships ($600 for a single) and twilight rates ($16.25 for unlimited play after 4 p.m.).

All in the name of progress.

"Our vision of Moorhead has people live here, work here, eat here," Messelt said. "If you have nice places to put homes, and one of them is one a golf course, you're feeding the whole equation."

Readers can reach Forum reporter Terry Vandrovec at (701) 241-5548

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