Based on details discussed at an August 29 meeting with representatives of the Majestic Hills Golf Course Board and the Boulders Conference Center Commission, the Denison City Council voted 5-0 last week to amend the lease with the golf board for space in the conference center.
This will be the fourth time the lease has been amended since it was originally agreed to in May 2005.
Following are Councilmember Corey Curnyn’s recommendations; he is the city council’s appointed liaison to the conference center commission.
Eliminate the golf board’s obligation to pay $500 if the conference center’s alcohol sales don’t meet the minimum benchmark. Curnyn said this is something the golf course has been obligated to do only a handful of times.
“But it’s something that should not be in there,” he continued. “We’re supposed to be getting 9.99 percent (of the alcohol sales) and we’re requiring them to come up with $500 if we can’t come up with our portion? That should be stricken completely.”
No payment of property taxes. The golf course pays $6,152 a year in taxes for the portions of the conference center they lease – Majestic Hills Bar and Grille, the pro shop and the golf cart storage space.
“If you rent a house, I’m going to pay rent. I’m not going to pay taxes,” Curnyn offered. “I think that pretty much goes everywhere. To me, it doesn’t make sense that they pay taxes on something they are renting. We have the authority to forgive them that amount of the taxes.”
Of the $6,152 of the golf course’s 2018 property tax bill, about $2, 715 goes to the city’s general fund and $278 goes to the city’s tax increment finance fund. The remainder goes to the other taxing entities - the school district, the county, the hospital, the community college, agricultural Extension and the state TB and Bangs levy.
However, it is too late for the city to forgive the property taxes that are due this month and in March 2020. The forgiveness would have to wait until the following property tax cycle.
Eliminate the lease payments on the golf cart storage and the pro shop.
Curnyn said it comes down to the city’s determination of the lease value of the restaurant. He added that the golf course, although privately owned, is a public course by its use, as anybody can play there. He continued that the golf course brings in tourism dollars and has increased the city’s property tax base through the construction of houses around the second nine holes that were added nearly 20 years ago.
“I guess it comes down to being a partner with them, as far as we’re lucky to have a municipal golf course but the city is not responsible for it,” he explained.
“We have a partnership where we have a building on their ground. Maybe someday they will buy it (the conference center); that’s in discussion, but obviously it was too quick to make a decision on that,” Curnyn added.
He said by reducing the rent to $1,250 a month, the city would receive $15,000 a year. He continued that would forgive roughly $6,200 in lease payments a year. Of that, $2,000 of the reduction would affect the city’s general fund and the remaining $6,000 reduction would affect the Boulder Conference Center’s budget.
For his part, Loeschen said eliminating the lease on the cart storage area and the pro shop could not give preferential treatment to a particular business. He pointed out that in Denison, no other business would be in competition.
“The things that are sold in the pro shop are unique pretty much to the pro shop, and the cart storage area, it’s again, other than there being other storage areas but not uniquely for golf carts,” he said.
Councilman Greg Miller threw out that Dollar General has a triple net lease agreement in which it pays part of the taxes and insurance, part of the maintenance. Miller said he checked with County Assessor Duane Zenk and learned a few lease agreements in town are triple net.
“Not to say this is good or bad. Just putting it out there,” Miller said.
The council initially discussed having the Boulders Commission approve the changes to the lease agreement until Curnyn pointed out that the last time the city renegotiated the lease, the Boulders commission had nothing to do with it. He said he and Dan Leinen, who was the mayor at the time, were the representatives for the city.
City Clerk Lisa Koch added that the lease is between the Majestic Hills Golf Course and the city. The beverage agreement is between the Majestic Hills Golf Course and the Boulders Commission.
The city council took up another item at its last meeting that relates to Boulders Conference Center – filling the position of assistant director. The most recent assistant director left for another job.
Councilman Nathan Mahrt thought the issue is for the Boulders Commission to decide. Koch said that discussion was brought up that perhaps the city council wouldn’t authorize a replacement for the assistant director.
Curnyn said that the assistant director’s position had been discussed after the August 29 meeting. He said that by not having an assistant, the city does not have to pay benefits. He said the city could try an employee on a part-time basis.
Loeschen offered that the challenge for the city is to get someone to work part-time and who will be committed to the job for a couple of years after being trained. Miller said that perhaps two or three part-time people could be used.
Mahrt said the most recent assistant director, Brooke Bennett, was excellent, and he wondered if the city could have gotten someone of her caliber for a part-time position.
Curnyn responded that the assistant director before Bennett was not with Boulders that long, but he agreed that it would be difficult to hire someone part-time.
The council was not asked to vote on their thoughts but to give a recommendation for the Boulders Commission.
The Boulders Commission has its own budget to work with. The amount of spending authority is set by the city council.