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Shelby Township

Board approves Cherry Creek lease amendment

February 11, 2013

SHELBY TOWNSHIP — Members of the Shelby Township Board of Trustees spent a majority of their Feb. 5 meeting trying to explain that a lease amendment with Cherry Creek was no bogey.

During the most heated debate since the current board was sworn in Nov. 20, 2012, the Board of Trustees ultimately approved a request to amend the Cherry Creek Golf Course and Banquet Center’s lease with a 5-1 vote.

The lease amendment allows Cherry Creek’s operating body, Golf Facilities Inc., to forgo lease payments from 2013 to 2020, and it extends the lease eight years, until 2062.

“We’re not going to give them any money; we’re going to defer the income we were going to receive the next eight years, and receive more in the additional eight years,” Township Supervisor Richard Stathakis said, noting a net gain of $1.1 million in the amendment.

While rent payments to the township are deferred, Golf Facilities Inc. has committed to use those funds for site improvements throughout the facility.

In 2013, Golf Facilities Inc. is scheduled to spend $9,500 on designs for expansion and renovation of the banquet center and golf course; $30,000 on tree clearing and underbrush removal on the golf course; $7,000 on entrance beautification on 24 Mile Road; and $15,000 to renovate and expand a “sales showroom” to increase banquet center business.

There will be $150,000 in total projects in 2014 for the addition of a bar, dance floor, lighting enhancements and ceiling enhancements within the banquet center.

A commitment of  $265,000 is on the schedule for 2015, as Golf Facilities Inc. will create a 130-foot by 16-foot covered patio space off the banquet center, followed by further expansion of the patio to the tune of $150,000 and a $36,000 expansion of the white tees on the golf course in 2016.

In 2017, Golf Facilities Inc. will invest $200,000 in the parking lot renovating a vegetation island and overhauling the parking surface.

A $325,000 investment in 2018 will see new construction to house a new pro shop/snack shop/grill structure, and $175,000 in 2019 will see the renovation of the current pro shop into additional space for the main clubhouse.

The project will close with a $230,000 investment in 2020 with $135,000 in new carpeting in the clubhouse and a $95,000 emergency generator for the facility.

The total cost of renovations throughout eight years will be $1,592,500, and the total amount in deferred rent is roughly $1.3 million.

“They are going to take the money they were to going to pay us and make improvements in our building,” Trustee Paula Filar said, noting that when the lease ends in 2062, Shelby Township will retain full ownership of the banquet center and golf course.

“The result of those physical improvements to our building will mean, in year nine when the improvements are done, we’ll make more money and it will extend it, so they will operate for eight more years, which means we’ll get that revenue for a longer time.”

The debate was stirred as residents and Trustee Nick Nightingale, who was the lone dissenting vote, questioned the loss of revenue to the township’s general fund.

“Where does the $125,000 we currently receive go? Where does that go?” Nightingale questioned.

Stathakis said the money received from Golf Facilities Inc. goes into the township’s general fund, and while $125,000 from Golf Facilities Inc. is figured into 2013’s budget, the loss can be absorbed by funds from the township’s capital improvement plan.

“We’re not taking anything out of the operating budgets,” Stathakis said, outlining how, after the initial $125,000 less in revenue is absorbed with funds from the capital improvement plan, following budgets would be adjusted not to include revenue from Golf Facilities Inc. until 2021.

“We’re not taking a penny of our operating revenue,” Stathakis added, noting that no departments, such as Parks and Recreation, would see a decline in funding because of the lease amendment.

“If we were, I would not vote for this. That would not be fair to our employees.”

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