Golf course not closing, revenue growth options to be explored
Shareholders of Cairo Recreation, LLC, owners of the 18-hole Tired Creek Golf Course, met Tuesday night, but due to a misunderstanding regarding the legal requirements for notification of a called shareholders meeting, no official business could take place.
Regardless, shareholders and the board of directors had a nearly two-hour, wide-ranging discussion with the unanimous consensus of those present being to explore a variety of options to improve the financial performance of the course and to solicit stronger community support for the local recreation asset.
Shareholders had received notification from the board of directors last week that the stated purpose of Tuesday night’s meeting was “suspending operation of Tired Creek Golf Course.”
However, it was learned this week that it was not the board’s intent to shut down the local golf course, but to communicate to the shareholders in the strongest terms possible the financial issues Cairo Recreation, LLC faces going forward.
On top of the extremely high cost of storm cleanup in the aftermath of Hurricane Michael, the golf course has struggled to remain profitable since Cairo Recreation purchased the assets of Cairo Country Club in May 2012.
Like country clubs across the nation, Cairo Country Club was suffering financially due to a loss in membership, lack of golf play, and long-term debt service when Cairo Recreation shareholders purchased the assets of the club six years ago. Cairo Recreation, LLC has likewise struggled to keep the community asset viable. It paid off more than $700,000 owed by Cairo Country Club and invested in the first major revitalization of the 18 greens at the course in 2013 along with other improvements.
A total of 33 of the 58 shareholders were present Tuesday night as well as other interested members of the golf course.
Treasurer Dr. Ron Spooner presented shareholders with an overview of the course’s finances since Cairo Recreation was formed. Spooner said that without being able to generate additional sales from rounds of golf, the course’s fiscal health appeared bleak.
Cairo Recreation President Chris Blough told shareholders that unless everyone was operating from the same page and with a plan for the future, the golf course’s fiscal condition would not improve.
Although there are a total of 58 shareholders, the bulk of the stock is owned by less than a half dozen investors. Dr. Gary Elmore, who is one of the majority stockholders, said Tuesday night he would be supportive of exploring a variety of options to be keep the course open.
One idea proposed Tuesday night was the possible creation of another limited liability corporation that could lease some of the assets from Cairo Recreation. By doing so, additional investment could be made in the new entity without diluting the investment of shareholders in Cairo Recreation, which more greatly would affect those holding the majority of the stock.
A proposal to create a type of homeowners association fee that would be paid by residents of northwest Cairo living on or in the neighborhoods surrounding the golf course could provide an annual income stream to preserve the golf course. Chuck Thomas, a local insurance broker and real estate developer who suggested the idea, said that the closure of the golf course could easily decrease property values around and near the golf course by as much as 10 percent, if not more. Thomas predicted many of the residents would pay a fee of $1,000 a year to preserve their property values.
Board member Louie Chastain told the audience it may be possible to sell the course to a buyer who would take control and operate it. Chastain said that maintaining operations and keeping the course made it much more attractive to a potential buyer than if the course were to be allowed to close.
Chastain also shared a proposal from a marketing consultant that could possibly result in additional golf revenue.
Other ideas discussed were reducing the number of holes from 18 to a more manageable number such as 12 or 9 and Dr. Elmore noted that golf originated as a 12-hole sport. If the number of holes were reduced it would reduce the cost of operations and would free up land for possible residential development geared toward homeowners who do not want lawns to be maintained and want a 1,400 to 1,600 sq. ft. home.
Shareholders were in agreement that a new and different approach to operating the course is critical and that additional revenue streams outside of golf sales must be explored.
Shareholder Richard Porter urged the board and his fellow shareholders to leave the meeting with a positive message to the community that the course was not closing, but that a variety of proposals are being considered that would result in the course remaining a viable recreation offering for the community into the future.