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The Issue:
Arrowhead Country Club Purchase Plan
Background Information
& Outcome
The
Legislation: Ordinance No. 61-03 authorizing
the Mayor of the City of North Canton, through the Board of
Control, to enter into an agreement for the purchase of the
premises known as Arrowhead Country Club, located at 1500
Rogwin Circle SW in the City of North Canton, Stark County,
Ohio (Permanent Parcel #56-08084) at a cost not to exceed
$4,200,000.
Council in Executive Sessions discussed the purchase of
Arrowhead Country Club on five occasions: January 13, 2003:
January 27, 2003; March 19, 2003; March 24, 2003; and April 7,
2003 (see Meeting Minutes).
Contrary to the customary procedure, the legislation was
handled in the Finance & Property Committee and never referred
out of that committee for legislation.
An Akron Beacon Journal article, “N. Canton bid may violate
the law (February 6, 2003)" reported that North Canton apparently
violated Ohio’s Open Meetings Law on January 31, 2003, when it offered to purchase the Arrowhead Country Club for $4.2
million without first voting publicly on the issue in an open council
meeting.
Prior to making the offer, the North
Canton City Council had discussed the purchase in two Executive Sessions that
were closed to the public. Council did not vote publicly on
the purchase of Arrowhead Country Club until the legislation
was read in open council for the first time on
April 14, 2003.
The offer to purchase Arrowhead Country Club had been made
by the city almost three months earlier on January 31, 2003,
with no vote taken in an open council meeting.
The
Outcome: The legislation was read at three
open council meetings: April 14, 2003; April 21, 2003; and
April 28, 2003 (see Meeting Minutes). The
April 21, 2003 meeting of council was a
special council meeting that was called specifically to vote
on the purchase of Arrowhead Country Club.
The special council meeting accelerated the approval of the
Arrowhead legislative by two weeks over the normal legislative
approval schedule. Legislation is normally read and voted on
at three regularly scheduled council meetings held at two week
intervals.
The legislation required at least four votes for passage
and received the needed votes for all three readings. In the
third and last reading of the legislation, all members present
voted as follows:
Yes: McLaughlin, Snyder, Foltz, Lindower and Magel
Abstain: Kiesling
No: Osborne
After council passed the legislation on April 28,
2003, three city residents, including myself, initiated
independent referendum efforts.
If the required number of signatures had been
collected on the referendum ballot within 30 days following
the passage of the
legislation, the voters of North Canton would have
been able to decide if
the legislation was to have become law.
However, the referendum efforts failed and the legislation
became law on May 29, 2003, as was reported in the Canton Repository
on May 30, 2003, in an article titled
“Arrowhead sale to city back on as referendum effort fails.”
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My Position and Rationale
My Position:
The City of North Canton should not purchase
Arrowhead Country Club.
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The City of North Canton can maintain the green space
and protect the neighborhood from residential development
through:
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Zoning – present zoning does not allow residential
development of the Arrowhead property. New zoning became
effective June 12, 2003, that clearly restricts residential
development of the property.
Eminent Domain – In the unlikely event that zoning
could not stop development of the Arrowhead property, the city could take the property through
eminent domain proceedings. In this process, a court of law
would determine the fair market value of the property. In
addition, all secret bids offered on the
property over the last few years would be made available to
the court. The city could then purchase the property at a fair
market value as determined by the court.
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Private ownership and operation of Arrowhead Country
Club property as a public golf course would bring a new
business and property taxes to North Canton while permitting
the city to retain a fine golf facility that is professionally
run and maintained. Private ownership of Arrowhead would also eliminate
the risk that the city may have to operate the golf course at a
loss. |
Earlier this year, an area businessman
bid to purchase
the Arrowhead Country Club property with intentions to
continue operation of the property as a golf course.
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The $4,200,000 price the City of North Canton offered
for Arrowhead Country Club appears excessive.
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The 105-acre Arrowhead Country Club was valued at
$2,259,300 in 2000 and $2,375,000 in 1997 (see Stark County
auditor's
property
record card).
In addition, the 107-acre Bob-O-Link golf course, which
will be developed for residential housing, recently sold for
$2,454,869 (see
property
record card). Yet, property sold for housing development is
typically valued at a premium.
I have read that golf courses typically sell for 2 ½ times
the course’s gross revenue. If this is the case, and assuming
gross revenues of approximately $1 million (approximately midway between the
gross revenues of Massillon’s Legends and Akron’s Goodpark),
Arrowhead Country Club should sell for around $2.5 million.
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The city is likely to experience significant expenses
in the near future. The purchase of Arrowhead, especially at
an inflated price, could compromise North Canton's ability to
manage these expenses. |
A
settlement agreement with the Maytag Corporation
indicates that North Canton is anticipating repaying as much
as $2.5 million to the Maytag Corporation due to the
corporation's overpayment of corporate taxes to the city. This
was reported in an interview with North Canton Finance
Director Julie Herr and published
in the Canton Repository on April 25, 2003 and titled, “Budget
at risk if North Canton buys golf course."
The city also has two more installments payable to
the Maytag Corporation of approximately $359,000 each for overpayment of taxes in other years. The second
of three payments is due in 2003 and the third payment is due
in 2004.
Job eliminations at Maytag/Hoover reported in both the
Canton Repository
and Akron Beacon Journal point to a downward employment
and economic trend for North Canton and surrounding areas. A
few articles about the job layoffs are listed below:
“Hoover to lose 12 payroll department jobs”
(Canton
Repository; May 2, 2003)
“Hoover must lay off 350 workers” (Canton Repository;
June 4, 2003)
“Maytag to cut 500 salaried jobs” (Akron Beacon Journal; April 17, 2003)
“Hoover to layoff hundreds in Stark” (Akron Beacon Journal; June 5, 2003)
The future of Maytag/Hoover jobs depends on the successful
negotiation of a new labor contract that will expire in
January 2005. Maytag/Hoover has moved all production out of the
industrial plant and put the facility up for sale, which
suggests to me a lack of commitment to North Canton and the
surrounding area.
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Possible negative financial implications for the city
of North Canton should be carefully examined before purchasing
Arrowhead.
Will the city need a park levy to finance the purchase of
Arrowhead Country Club? |
Will the purchase of Arrowhead put further pressure on the city to raise water
rates to repay the $11-million debt for
improvements to the Water Treatment Plant? (see
Water Rates Increase issue for
details)
Will the city need to increase the Emergency Medical
Service levy? Presently, the levy generates approximately
$187,000 a year, yet current ambulance expenses exceed $1.0
million a year. A shortfall in levy revenue has been covered for
several years by transferring funds from the general fund (the shortfall
recurs because there has been no
adjustment of the EMS levy in sixteen years).
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North Canton would probably have to subsidize the
operation of Arrowhead Country Club if the city were to run it
as a municipal golf course |
This has been the experience of both Massillon's Legends Golf
course and Akron's Goodpark over the last three years.
Financial statements of Massillon's Legends golf
course and Akron's Goodpark golf course indicate that operating
expenses run between $858,000 and nearly $1,077,000 yearly. The
revenues at both courses barely exceed operating expenses in
some years leaving very little to repay debt service on borrowed
funds.
The City of North Canton
could find itself repaying both the debt and a portion of the
yearly operating expenses from the general fund just as Massillon and Akron do now.
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Private bidders for Arrowhead Golf Course were provided
Arrowhead Country Club’s financial records; North Canton City
Council was not provided the same financial records. |
I
requested the financial statements of Arrowhead Country Club in
open council and in writing, but they were not provided.
I also
requested
the names of the bidders and all bid amounts on
Arrowhead Country Club over the past six months be made
available to council.
I thought that disclosure of this information to
council was needed to protect the public.
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The City of North Canton does not have the expertise to
operate a golf course and does not appear committed to saving
the golf course.
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In the
minutes of a Recreation Board meeting held on
January 8, 2003, regarding the city’s purchase of the Arrowhead
property, there is discussion of developing a portion of the
property into housing to recoup some money as well as discussion
of the city reselling the property for a profit.
The Recreation Board discussions were also reported in an
Akron Beacon Journal article on May 3, 2003, titled “Resident wants
vote on N. Canton land deal”. I came into possession of this
document by making a Freedom of Information Request to the
Mayor’s office. This document was not distributed to council.
A memo to Mayor Tom Rice from North Canton Recreation
Director Kim Cooksey,
dated January 5, 2003, include suggestions for the use of the property such as
a water park site, BMX bicycle dirt course, and salt storage
facility to name a few. I came into possession of this document by
making a Freedom of Information Request to the Mayor’s office.
This document was not distributed to council.
Numerous quotes to the media by Mayor Tom Rice indicate that
there is little if any commitment to use Arrowhead as a golf
course or as a means to preserve green space:
“Council OKs city’s offer
for Arrowhead” (Canton Repository, April 29, 2003)
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“However, he [Mayor Tom
Rice] warned
neighbors that even if the deal goes through, the city cannot
promise that the land will remain open indefinitely and that no
portion of it will ever be developed or sold.”
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“You can
liquidate that asset if you need to. You could sell it to a golf
course operator if you want to,” Rice told council. “Our intent
for buying (the course) is for investment and to … control the
future uses of the property.”
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"The future of Arrowhead Country Club is now in the hands of
its stockholders" (Akron Beacon Journal, April 30, 2003)
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“We have no crystal ball,” Rice said. “We don’t know what
will happen with Hoover or other revenue sources. But the city
can liquidate the land if it becomes necessary.”
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"Resident wants vote on
N. Canton land deal" (Akron Beacon Journal, May 3, 2003)
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“Rice said Thursday he has heard hundreds of ideas for the
future of Arrowhead. He said he does not support using a park
levy to pay for the country club and isn’t ‘crazy about running
a golf course long term.’”
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“’At this point, I wouldn’t rule anything in or out,’ Rice
said. ‘Whether the land becomes a park, we pay someone to run it
as a golf course, or it ends up being houses, my position has
always been that we should acquire the land so we could be in
charge of how it is used.’” |
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Research, Documentation & Press
Coverage
Correspondence:
Press Coverage:
Canton Repository:
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N. Canton may consider buying Arrowhead
(January 7, 2003)
Arrowhead Country Club membership is driving sale
(January 8, 2003) |
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North Canton to bid on Arrowhead tract
(January 14, 2003)
Arrowhead a great buy for N. Canton
(January 21, 2003) |
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North Canton citizens should debate how property could be
used (January 30, 2003) |
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North Canton offers $4.2M for Arrowhead
(February 6, 2003)
Sale to city would benefit club as well
(February 7, 2003) |
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Arrowhead neighbors oppose new houses
(February 11, 2003) |
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N. Canton takes first shot at buying golf course
(April 8, 2003) |
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Arrowhead purchase, Sanctuary plans move forward
(April 15, 2003) |
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North Canton tries to speed up plan to buy Arrowhead
(April 22, 2003) |
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Budget at risk if North Canton buys golf course
(April 25, 2003) |
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Arrowhead remains a good investment
(April 27, 2003)
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Council OKs city’s offer for Arrowhead
(April 29, 2003) |
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There’s plenty wrong with this picture
(May 3, 2003)
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Arrowhead members OK sale to N. Canton
(May 5, 2003)
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North Canton council has been looking out for well-being of
residents (May 12, 2003) |
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Arrowhead property holds great promise for North Canton
residents (May 13, 2003) |
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Arrowhead wants OK to build houses
(May 15, 2003) |
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Wait, worry is newest game at Arrowhead
(May 16, 2003)
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North Canton has great opportunity
(May 18, 2003) |
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Don’t expect an extended stay for Clarett (May 18, 2003) |
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Arrowhead, Oster wrangling continues
(May 20, 2003) |
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Osborne tries to stop every positive move council takes
(May 21, 2003) |
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Osborne’s petition is not a vote for housing development
(May 21, 2003) |
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Osborne puts Arrowhead referendum on back burner
(May 23, 2003)
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Petition signature tells Arrowhead not to sell to city
(May 23, 2003)
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City weighs uses of Arrowhead land
(May 25, 2003) |
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Inside North Canton’s land deals (May 25, 2003) |
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North Canton prepares to sell Oster, buy Arrowhead
(May 28, 2003) |
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Arrowhead sale to city back on as referendum effort fails
(May 30, 2003) |
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What’s next for Arrowhead?
(June 2, 2003) |
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Development of Arrowhead would add to North Canton’s tax base
(June 7, 2003) |
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City looks into Arrowhead options
(June 29, 2003) |
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Concerns arise at Arrowhead
(July 1, 2003) |
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How does secrecy serve public interest?
(July 2, 2003) |
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If city buys Arrowhead, then what?
(July 4, 2003) |
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North Canton shouldn’t buy Arrowhead
(July 7, 2003) |
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Too little, too late
(July 7, 2003) |
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Arrowhead sale a step closer
(July 8, 2003) |
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Arrowhead sale won’t be the end for golf course
(July 9, 2003) |
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Arrowhead belongs to city, but club’s future undecided
(July 11, 2003)
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Arrowhead finances go into the hole
(August 2, 2003)
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Akron Beacon Journal*
*Archived
Akron Beacon Journal articles are available to view on the
web for a fee of $2.95 per article. Past
Akron Beacon Journal editions can also be found at local public
libraries.
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N. Canton may want golf course (January 8, 2003) |
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N. Canton council OKs golf course bid (January 14, 2003) |
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Country club site has a rich history (January 15, 2003) |
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N. Canton looks at offer for club (January 27, 2003)
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N. Canton bid may violate law (February 6, 2003)
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Water isn’t best rationale to buy North Canton club (February 11, 2003) |
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North Canton prepares offer for country club (April 8, 2003)
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Arrowhead purchase gets initial approval (April 16, 2003)
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North Canton nears country club deal (April 22, 2003) |
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Council OKs plan to buy country club (April 29, 2003)
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The future of Arrowhead Country Club is now in the hands of
its stockholders… (April 30, 2003)
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Resident wants vote on N. Canton land deal (May 3, 2003)
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N. Canton club OKs sale of land (May 5, 2003) |
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N. Canton may vote on 2 land deals (May 14, 2003)
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Official pushes for partnership (May 21, 2003) |
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North Canton official halts referendum effort (May 22,
2003) |
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North Canton OKs two property deals (May 29, 2003) |
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Prospective buyers arise for golf club (June 3, 2003)
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Gulf club trustees considering offers (June 4, 2003)
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N. Canton to buy Arrowhead club (June 5, 2003) |
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Arrowhead members reconsider (June 13, 2003) |
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Club could cost city more (July 2, 2003) |
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Club trustees, members to meet (July 2, 2003) |
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North Canton official reviewed (July 8, 2003) |
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N. Canton finalizes Arrowhead deal (July 11, 2003) |
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Arrowhead votes to close early (August 2, 2003)
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