Golf course expects a loss for this year


The quasi-state agency developing Compass Pointe Golf Course in Pasadena expects to lose money on the operation this year - projecting a loss of up to $1.1 million as recently as last fall - and Anne Arundel officials say the county probably will be asked to make up some of that shortfall.

In documents given to the county in late November, officials from the Maryland Economic Development Corp. said they planned to ask for $732,000 to help cover the operating shortfall, which agency officials blame mainly on last fall's bad weather.

Those documents also show that the corporation, which is developing the public golf course under a contract with the county, planned to seek a county loan to cover a projected $2.1 million in construction overruns. County officials said they have rejected that idea.

But the November figures represented a worst-case scenario and probably are obsolete, said Hans F. Mayer, executive director for the corporation. The agency uses state bonding authority to fund economic development projects around Maryland and reports to the governor's office.

"We're not actually knowledgeable about what the numbers are now, but all that [November] presentation was an attempt to bring the county up to date," Mayer said. "It was not something official in any sense. ... We just did not want the county not to know we might be facing some issues."

The shortfalls at the $17 million Compass Pointe project are the latest problem the agency has faced at that course and with other developments.

Last year, the county briefly shut down construction at Compass Pointe because sediment was running into nearby streams. And the agency's Rocky Gap Lodge and Golf Resort in Cumberland reported $18 million in losses for its first four years.

Though the first 18 of 36 holes at Compass Pointe opened in October to strong reviews and healthy crowds, the course has not generated as much revenue as projected because a rainy spring and summer delayed its opening, Mayer said. He said the course lost about 7,200 rounds, at $55 to $65 a round, to the wet weather. A detailed breakdown of the projected operating shortfall was not available in the November report.

Mayer would not say whether the corporation plans to ask the county for help with operating expenses. The nonprofit agency says that if it asks for money to make up for an operating shortfall, the county executive must include the request in her budget.

Said John R. Hammond, the county budget officer: "I would expect a request for some operating assistance."

Officials said the assistance clause was a show of good faith from the county, which expects Compass Pointe to be an economic development boon and is scheduled to take control of the property after the agency pays the debt on the project. The developer has until March 1 to submit a request for the fiscal 2005 budget.

The County Council would have the power to decline the request, and members said they would be reluctant to help the course when the county faces a multimillion-dollar deficit.

"With the way we're seeing the budget right now, I have a hard time with the idea of giving money to a golf course," said Councilman Ronald C. Dillon Jr., a Republican whose district includes Compass Pointe. "I just see it as a hard sell when teachers and police officers are going to be asking us for the same money."

Despite the shortfall, Mayer and county officials predict long-term success for Compass Pointe. Mayer said the course was filled to capacity almost every day for the few weeks after its opening before colder temperatures hit.

He also said current financial figures are misleading because the agency has been relying on revenues from 18 holes to pay for the operation of a 36-hole course. The second 18 holes are expected to be ready this summer. Once the entire course is open for a few prime golfing months, financial problems will ease, Mayer said.

"When we get 36 holes open and with as much good comment as we've received, I feel good about where we'll be," he said.

H. Lee Boatwright III, who was appointed chairman of the agency's board by the governor, attributed the shortfall to bad luck. "What can you do when you've had the kind of weather we've had in the last year?" Boatwright said.

County officials also expressed optimism.

"I think the financial projections are conservative enough that, given the public interest to date, it will meet all its targets," Hammond said.

County officials said they do not expect the situation to mimic the difficulties at Rocky Gap, which struggled to find a market despite positive reviews.

Agency and county officials said they see few similarities between the two projects because Compass Pointe meets a clear demand for golf courses in Anne Arundel.

But Compass Pointe has been beset by delays and political arguments.

The county bought land for a golf course in Pasadena in the 1980s and later persuaded developers to donate more land. But its decision to have the agency develop the course prompted legal threats from private developers, who said the nonprofit group was designed to promote projects in economically depressed areas, not in thriving markets.

State legislators then expanded the corporation's charge and allowed it to move forward on Compass Pointe.

"The citizens of North County were promised this golf course over 20 years ago, and with so many people working together, this much-needed recreational opportunity became reality," said County Executive Janet S. Owens.

Construction began in 2001, and the course seemed on target to open in July until a barrage of snow and rain caused delays. The county halted the project briefly after a deluge caused sediment ponds to overflow and sent runoff cascading into nearby streams.

Mayer said the course was delayed further when a vandal in a Jeep tore up newly seeded grass.

Weather problems added thousands of dollars to construction costs, said Chris Ward, project manager for Chamberlayne Ave. Development Co. Inc., the general contractor for Compass Pointe.

Despite the lost revenue, the Maryland Economic Development Corp. has paid its bills, said representatives for Chamberlayne and Billy Casper Golf, the company that manages the course for the agency.

Said Tony Cianci, regional operations manager for Billy Casper: "We have a very, very good working relationship with MEDCO."

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