Club goal is to control its destiny
Rick Osbakken calls it a "high risk, low reward" situation but one the Two Harbors Curling Club is willing to take on. The club president was talking about taking ownership of the building it has leased from the city of Two Harbors since the mid-1990s.
Osbakken said buying the building, and the Lakeview National Golf Course clubhouse operation that is part of it, insures a future for curling in the area.
"The curling club understands that the city has limited resources and the building has been starting to show its age," Osbakken said. "By owning the building, the curling club can begin to invest in the needed building repairs and capital improvements that have mounted over the years."
He said the ownership idea has been a slow sell to club members but that about 90 percent are on board. The club has 109 members from across the county.
The club has leased the building from the city since an arrangement made in 1992 after a fire destroyed the original curling club. The club donated the land it originally sat on so the city could construct the current fire hall. The club got property in exchange and built the current club and connected it to the golf course clubhouse.
For the city, the deal is way to break off a portion of the burden the golf course has become as it continually loses money - along with no longer having to maintain the building as the owner.
"Proceeds from the curling club-run clubhouse will be used to finance repairs to the building," city council member Jerry Norberg said.
"We actually have had a great working relationship since 1992," Osbakken said. "It has just gotten to the point where some major maintenance requirements are coming up and we feel we can take care of preserving this facility easier than the city."
Osbakken said the clubhouse sales won't likely make a profit for the club right away but he is expecting revenue in future years.
Norma O'Leary, a member of the club board and manager of the golf course in Silver Bay, said the agreement with the city will help the club run things more efficiently. "We need our operation to be successful," O'Leary said.
Norberg said the city is maneuvering to put as little taxpayer money at risk as possible when it comes to the golf course operations. It is working to bring down payments on a bond used to make past improvements at the course and hired a greens keeper to make sure it is playable for the entire season.
Last fall, a portion of the course was closed due to turf conditions and profits dropped along with it.
Tracy Pearson will be paid $180,000 to maintain the course. Some of that money will be used to hire help and buy chemicals used to maintain the course, among other things.
"Regardless of whether we keep the golf course as a city asset or sell it to a private developer, we need to bring the course up to par," Norberg said. "I use the adage that you don't sell a car with bald tires."
The city will pay a $1,200 annual fee to the curling club as it operates the clubhouse. The lease is 10 years and, once it expires, the curling club can renegotiate a deal with a third party.
Osbakken called the relationship with the city over the years mutually beneficial. "We took care of our ice area with paint and minor maintenance [and] they took care [of] the upstairs and the clubhouse," Osbakken said.
According to a letter from Darrin Young, who sits on the club's building committee, sent to the Lake Superior School District in November about property tax abatement, the club wants to make at least $60,000 in repairs at the club, including new roofing and siding. Bids for siding, shingles, and eaves at the club came in at about $52,000.
The curling club will provide 13 hours of staffing at the clubhouse for 198 days, with the city paying $130 a day for a total of $25,740. The city will also pay $1,000 for every $5,000 in gross revenues from sales of season tickets, daily sales of green fees, and motorized cart sales (excluding driving range revenues) in excess of $210,000.
Council member Mary Rosati said the club is taking a big chance by taking on all the expenses associated with owning the building and running the clubhouse.
"Why do it?" she asked. She said another added cost for the club would be a full liquor license required to operate year-round.
Rosati she said she can't really say who is getting the better deal, the city of the club, because she doesn't fully understand the moves the city has made to protect taxpayers.
Council member Chris Swanson said "whenever you put the tools in the hands of those who are the most passionate, something has a greater chance of succeeding." He didn't rule out turning the golf course over to golfers some day.
Rosati thinks it will be a watershed year for the golf course. She said the main reason for continuing to throw money at the losing enterprise is to keep it in shape for a sale. She said more losses this year would be the "straw that breaks the camel's back."
"I'd like to see it sold," she said.
Norberg said the council was originally going to give the curling club a percentage of green fees totaling about $30,000. The new format works out better for the city. He said the lowest bid from an independent contractor to run the clubhouse was $102,000.
"We set financial numbers that we felt will stay within the revenues the golf course generates each year," Norberg said. The city is tying much of its expenses on the daily use of the course, meaning it could save money with fewer expenses if tee times dwindle.
O'Leary said she recently walked the Two Harbors course and had hoped the course looked better than it did. She cited ice damage as one of her concerns.
She has confidence that Pearson, the greens keeper Two Harbors hired, could get the course in shape. He's a native of Silver Bay. "Tracy is going to do a very good job," she said. O'Leary said the $180,000 the city has budgeted for course upkeep may not be enough.
Getting word out
The city has agreed to assist in getting money to promote the golf course through regional advertising and marketing campaigns. The city will also pay up to $750 for web site creation and maintenance and pay for all telephone and internet access, building security, and utilities.
Osbakken said curling club use has been on the rise in recent years. League nights fill the weekdays and tournaments and clinics fill the weekends. He said 10 years ago there were two league nights and just two bonspiels a season.
Yearly membership fees are $165 for adults and $85 for younger members. There are also league fees and tournament proceeds.
"Curling's become popular," Osbakken said.