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DesRochers makes pitch to Council members: driving range would make Oak Hills solvent

Oak Hills Park Authority Ad Hoc Driving Range Committee Chairman Ernie DesRochers, right, and Minority Leader Travis Simms (D-District B), center, listen to Common Council Finance Committee Chairman Bruce Kimmel (D-At Large), left, during Thursday's meeting in City Hall.
Oak Hills Park Authority Ad Hoc Driving Range Committee Chairman Ernie DesRochers, right, and Minority Leader Travis Simms (D-District B), center, listen to Common Council Finance Committee Chairman Bruce Kimmel (D-At Large), left, during Thursday’s meeting in City Hall.

Updated, April 12, PDF of financial analysis added

NORWALK, Conn. – If the city isn’t willing to finance a golf learning school – a driving range – at Oak Hills Park, the Oak Hills Park Authority will go to a bank for financing, provided the restaurant debt is “taken care of,” Ad Hoc Driving Range Committee Chairman Ernie DesRochers said Thursday.

DesRochers’ verbal pitch in favor of a driving range was a follow-up to a 48-page financial analysis of Oak Hills he sent to the mayor and Council members last week, much of it damning decisions made regarding the restaurant’s construction and claiming those choices set up the park to fail.

It was all part of what Common Council Finance Committee Chairman Bruce Kimmel (D-At Large) called an “open discussion” to resolve a problem that has been “lingering” a long time, with the premise that the Council might be willing to absolve the debt the Authority incurred during the administration of former Mayor Alex Knopp.

In January 2005, the Authority went $2.2 million in debt to Norwalk at a 4.5 percent interest rate, while pledging cart revenues to the payments unbeknownst to the public, DesRochers’ analysis states. This debt has been amended three times, with the latest restructuring in 2012, and the outstanding restaurant debt is about $1.9 million, it states.

“Unfortunately, I was not on the Authority when the debt was restructured or it wouldn’t have been restructured that way. We would have had this discussion two years ago,” DesRochers said.

The Authority took out a $100,000 line of credit last fall; $80,000 of that has been spent due to the unusually tough weather, DesRochers said, with $20,000 taken out in February and $60,000 taken out in March

DesRochers’ called the hoped-for driving range the “800-pound gorilla in the room.” It would make $500,000 a year – $375,000 before the debt is paid – he said. It would make Oak Hills an “incredibly competitive facility,” he said.

“If we can figure out a way where we can build it, we pay the city the debt service, hell, we’ll even make you our partner,” DesRochers said. “We’ll figure out some sort of waterfall where we pay the debt service and then we get some money to add to our working capital and over that we’ll split cash flow from the thing and  you can take that and use it to pay the bonds down. We are willing to do something creative here, it’s just a matter of  we really believe for the viability of park over the long haul you need to have a first class practice facility in there. If the city doesn’t want to do it so be it. We’ll try to get it financed somewhere else.”

Kimmel asked DesRochers if the Authority would be able to build a driving range without incurring more debt. “It’s impossible, because the budget to build it is roughly $3 million,” DesRochers said.

Kimmel asked how the golf school (driving range) would be financed if the restaurant debt were forgiven. “I would go to a bank… if you look at our bottom line it would look pretty good,” DesRochers said.

Kimmel asked if there was a way to restructure the restaurant debt to allow the Authority to build a golf school. DesRochers said no.

“Even back then they said Oak Hills couldn’t support a restaurant,” DesRochers said.

The restaurant was a bad idea, he said. Instead of building it on flat land behind the practice green it was built on the hill, where there is a great view but the cost of construction was high.

“They had to come back and restructure the contract because the contractor went broke,” DesRochers said. “While it was on budget they blew through all the contingencies, which were 20 percent. They located it in the worst possible spot, because of the ledge.”

Not blaming anyone, but it was never going to work, he said.

“If you read all the politics around it, politics got in the way and it got in the way because certain people wanted to make certain neighbors happy because of elections and everything else,” DesRochers said. “You never would have built it.”

“It is so important when you have an authority that the people who are on the Authority are there for the right reasons, not to kowtow to a politician, not to agree to do something that they know in their heart is wrong,” DesRochers said.

DesRochers advocated for the city to spend $15,000 on a study by the National Golf Foundation to see if a golf school would be as profitable as expected.

“There are a couple of ways we can do this,” DesRochers said. “You can take over the restaurant debt and we’ll give you the rental income from the restaurant. So there isn’t any fight over we’re keeping money you should have and then we’ll go out and try to privately finance it. Stamford did it that way.”

Councilman John Igneri (D-District E) asked how long it would take to build a driving range if the Authority could go out tomorrow and get financing.

DesRochers said this was government work, so add nine months to what you think it would take. But, “If we were just going out and do it we would be in the ground in October, I think,” he said.

The city made an investment that it shouldn’t have made, the same as with the Maritime Aquarium, Majority Leader Doug Hempstead (R-At Large) said. “It is what it is,” he said, and if the city is going to spend $600,000 to $700,000 getting a trail (Norwalk River Vally Trail), it should be willing to invest $1.5 million in a facility that will produce revenue.

“To me, invest now or own it later kind of thing and I think we need to look at it realistically as a business deal,” Hempstead said. “Take all of the emotions out of it, take it out all the stuff, and look at it as a straight out business deal, what would you do if it was your property?”

The park’s lease gave the Authority the right to build a driving range and a restaurant, DesRochers said. “That right was taken away from us by politicians. We had $2.5 million in bond set aside, they put it in the restaurant,” he said.

“Regardless of what everybody wants to do, it is a political year and it is what it is,” DesRochers said. “Personally, you know what, I care about Oak Hills. … We are here as business people telling you what we think you should do.”

If not, he will gladly walk into the Finance Department and hand over the keys, he said.

Council President Jerry Petrini (R-District D) asserts that he not about political gain, he is about the good of Norwalk, during Thursday's Finance Committee meeting in City Hall.
Council President Jerry Petrini (R-District D) asserts that he not about political gain, he is about the good of Norwalk, during Thursday’s Finance Committee meeting in City Hall.

Council President Jerry Petrini (R-District D) spoke strongly.

“I don’t care if it’s an election year or not,” Petrini said. “Contrary to what I have been told tonight, I am making a political decision, people don’t know me that well, I am looking for the benefit of what is best for the city. Oak Hills is part of that city. I went back and I looked at your whole analysis and whoever let this go through in the very beginning, just like you said, you guys were destined to fail. I am surprised you guys lasted this long. … I think we all got it at this point.”

“We get it, so rather than rehash or talk about the past anymore I think we need to do what is recent,” Hempstead said. “Looking back the last three years, what is the history, what the results have been financially, what the drag is and go from there and let’s not talk ever again about how we got here.”

“Let’s keep this discussion going,” Kimmel said. “It will be resolved, believe me. One way or the other irrespective of the fact that we will be moving into the early summer and close to the election. I don’t think anyone here is going to be concerned with that.”

The city will be able to present its perspective on the issue at the next Finance Committee meeting, in May, and the mayor will be invited, Kimmel said. “Then in June nothing or something will be decided,” he said.

The process is backward, Finance Director Thomas Hamilton said. The mayor should be leading negotiations with the Authority, not the Committee.

“If there is going to be modification to the lease agreement or consideration to any sort of appropriations there need to be those discussions up front and then presented to the Council as any other proposal would be presented,” Hamilton said. “… I have expressed that to the mayor, he has indicated to me that he agrees that’s the process he believes should be followed.”

The Finance Committee gets a financial update every month, which is affected by this issue, Kimmel said.

“I decided I want to have it come to a head instead of having it linger and linger and continue to linger so we initiated a broad discussion,” Kimmel said. “… I don’t see any reason why the Council for any particular issue, if it feels strong about it, shouldn’t take the initiative.”

It’s going to be a collaboration, Kimmel said.

Hamilton said he is not against a driving range and, as a former employee of the city of Stamford, he saw what a “cash cow” it was for the city’s golf course.

“Whether it would be successful here I don’t know, I am not an expert at golf,” Hamilton said. Spending $15,000 on a study is “probably a wise use of money before we consider investing potential several million dollars into a driving range,” he said.

But, “In order for any action to be taken ,the mayor has to agree to sign documents,” Hamilton said. “The Council has to authorize the mayor to sign documents; if the mayor hasn’t been involved in any of the negotiations I am not sure how he would become comfortable to sign documents that he hasn’t been party to negotiating.”

“I don’t want this to hang out there forever because, as (DesRochers) said, it’s not good way to run a business. I think we all agree to that,” Kimmel said. “… My feeling is the mayor will have the final say, after the consultation with your department, but right now we are having what I think is always healthy, an open discussion, in full public view, of a problem that has been bandied about for many years.”

Oak Hills Financial Analysis April 2015

Comments

13 responses to “DesRochers makes pitch to Council members: driving range would make Oak Hills solvent”

  1. Jim Perkins

    You have got to be kidding, please vote out all these people in November! Even to entertain this idea is absurd.

  2. Jim Perkins

    Please Mr. Derocheres go to the Finance Department today and hand over the keys as you said! I just checked the city website they are open from 9-5 today.

  3. Debora

    The Mayor signs contracts practically every day that he had no hand in negotiating. They all come through committees (Public Works, for example). This discussion does belong with the Council, not the Mayor.

    BUT, if the Council is going to consider this hare-brained idea of forgiving the debt that is supposed to be financed out of the Park’s activities and continue to ignore the fact that this land was deeded as open space, it should put iron-clad conditions on the activities of OHPA in the future.

    DEFER the debt for seven years. If the Driving Range, in all its glory cannot make the park solvent to the point where it can resume payments on the original debt, then the lease should be canceled and the Authority itself should be dissolved, and the park, the restaurant, the golf course and everything in it should revert to the City, to be operated by Recs & Parks.

    If OHPA had been funding it’s capital improvement accounts to the tune of $250K per year, like the lease specified, they would be able to build this for cash. If OHPA had done fund-raising, any endowment and proceeds from the endowment would have been exempt from debt service payments. The lease gives the city the right to defer the payments on a year to year basis. The lease gave OHPA six years before it even started charging for debt service.

    The OHPA is a municipal authority for the purpose of running a municipal golf course. If it cannot do what it was chartered to do, there is no reason to have an authority. What it can not do is pretend that this is a business. The land is designated for open space, and OHPA pays no tax on the land, nor any rent for its use of city property. The lease payments only provide compensation to the City once the debt service in any given year is satisfied.

  4. Jim Perkins

    Every time I read this I find another ridiculous comment by Mr. Derocherers… “I would go to a bank…without the debt our bottom line would look pretty good.” Then why the need for a range? But after our elected officials forgive this debt he will be right back with his hand out for the range when a bank turns him down.

    Another quote “they located it (the restaurant) in the worst possible spot full of ledge” isn’t the spot where Mr. Derocherers proposing the new range also full of ledge?

    It’s time the city of Norwalk take back the park and treat it like a city entity, many other towns have public golf courses run by the parks department of the town. What the real problem is here is that the OHPA and the golfing contingency in Norwalk want it to be finely manicured like they see on TV and like their own “private club”. What needs to happen is it needs to be treated just like all the other parks in the City and it will not cost the City any money to run as the OHPA is trying to scare everyone into, it will just be another muni golf course that isn’t so well manicured and the user fees will cover it’s costs.

    It’s now time to take back this property, the OHPA gave it a valiant effort but can’t do it. Enough is enough!

  5. Paul Cantor

    The Oak Hills Park Authority has received millions of dollars in the form of loans from taxpayers that it can’t pay back. In addition it has received a $1.5 million dollar grant from taxpayers to help it cover its capital costs. Now it wants members of the Common Council to forgive it its previous loans and lend it millions more to construct a large commercial driving range. And it appears that members of the Common Council are prone to do just that. Indeed if you had been at the meeting of the Common Council’s Finance Committee last night you would have witnessed Council members Bruce Kimmel, Doug Hemstead, and Jerry Petrini pandering to OHPA member Ernie DesRocher’s plead for loan forgiveness.

    Enough is enough. User fees do not generate the income needed to cover the operating and capital costs of the 18-hole golf course. Hence, there is no justification for its continued existence. But until it is shut down the first use of any revenue it generates over and above its operating costs should go to servicing its loans.

    Meanwhile, not one penny of the grant money the OHPA received should be used to prepare the ground for a driving range. Instead the money should be used to begin turning Oak Hills Park into an amenity like Wavenly Park in New Canaan.

    Wavenly Park has 3.5 miles of jogging/walking trails; soccer, baseball, and softball fields; picnic area, Platform Tennis courts,” a swimming pool, a dog park and lots of open areas accessible everyone for a wide variety of other purposes. And the costs of a Park like Wavenly that benefits everyone would be a fraction of the cost of an 18-hole golf course that benefits only the minority that plays golf

  6. Just another view from a Norwalk resident

    In a previous article from NoN,OHPA stated that last year golfers played about 45,000 rounds at the Oak Hills golf course. The cost to play at Oak Hills is a bargain for both residents and non-residents when compared to the costs at other public courses in Fairfield County. and Seems to this retired CPA that by increasing the cost of a round by $1, OHPA could generate around $45,000 that could be used to repay the $1.9 million debt. OHPA should raise the fees by $3-$5 per round which would give it $135,000 to $225,000 to pay off this debt before coming to the taxpayers looking for more money.

  7. Suzanne

    It feels a little bit like extortion – Mr. DesRochers is telling a political/public service entity for which he is a lessee (or the OHPA is), do it my way as a business man, the latest incarnation of the OHPA, and forget the politics, while appealing to that same political/public service body for the money he needs for a driving range.

    There is no demonstrable benefit for a new driving range to the City, except for the few who get to use the course.

    The “cash cow” that is the Stamford range, built under very different circumstances with a very different configuration: where are the actual figures from the manager of that course showing the monetary benefits which are not even applicable in this case?

    Please don’t forget the context of the Stamford range either: right down the street from offices filled with business people whose juxtaposition to it has no bearing on the neighborhood located Oak Hills course.

    Frankly, I am wearying of a group of people making decisions for the Norwalk citizen that shows no regard for said citizen’s needs or benefits.

    I have a great deal of respect for those that serve on this Finance Committee. But, they are being asked to roll over and pay for a debt at the citizens’ cost when the OHPA has not kept up their end of the lessee bargain.

    This justification for this money does nothing to show whether the OHPA made any effort whatsoever in defraying the costs of the restaurant. Their resentment is so great, a huge emotion at play here, they have never taken responsibility.

    Betsy Bowen, a longtime resident of Norwalk, has mentioned the line-up of golfers desiring a “classy place” for such a venue and that’s what they have. So, the OHPA shot themselves in the foot and we are supposed to pay for it.

    No. Just No.

  8. QuickNote

    NO to debt forgiveness. The arrogance and gall of this Authority is appalling. Leave the keyes.
    Thank you

  9. Jim Perkins

    And please Mr. Mayor…. change the locks after you get the keys.

  10. Kevin Di Mauro

    I wish the City of Norwalk would stop trying to use my tax dollars to play the role of venture capitalist. I don’t want to be partners with this city or the OHPA in financing a restaurant or a golf course. I don’t want to be a part of your “business deal” Mr Hempstead.

    Ernie DesRochers finally did say something that I partially agree with. THE RESTAURANT WAS A MISTAKE. However, it’s not because it’s located on a hill. It’s because it’s located in a RESIDENTIAL NEIGHBORHOOD. Why can’t the city understand that the neighbors don’t want commercial activity in their residential neighborhood?

    It’s a shame Mr Hempstead objects to talking about “how we got here”. A trip down memory lane might prevent the same mistakes from being repeated.

  11. Debora

    @Just another view from a Norwalk resident,
    To be completely fair to OHPA, they are not at liberty to raise their rates at will. Their rates must be approved by another body each year, and part of the mandate of a municipal golf course is that it keep its rates affordable to the residents who are supporting its activities.

    That said, this is exactly why OHPA needs to stop acting as if this is a commercial enterprise that will be able to compete with other, private courses. That is not its mandate.

  12. Suzanne

    Debora, I would think that the OHPA would do the math: that is, calculate, in real terms based upon recent year play, the number of rounds expected for the year. Calculate the cost of running the course (every aspect including debt service) and price rounds accordingly.

    Isn’t the mandate they run the course based upon fees secured by rounds?

    If realistic terms were set, the numbers clear and not wishful thinking on the part of the OHPA, then what is affordable to the community would have to be what it takes to keep the course solvent.

    I don’t see where a driving range, adding more capital costs to the OHPA’s bottom line, will in anyway provide the income needed or is worth the risk.

  13. OhNoNorwalk

    Election time everyone that votes for this losing business is GONE.
    Your have no business sence and should not be responsible or a penny of our money.
    You can not run your household or a business in this manner.
    Stop flushing our tax $$$$ down the toilet.

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