Report finds Chestermere golf course 'not economically viable,' backs up case to redevelop land

A newfeasibility report by national accounting firm MNP finds the Lakeside Greens Golf Course in Chestermereis "not economically viable as a long-term business" due to the company'sshrinking revenues, theneed for a costly overhaul to the groundsand clubhouse,and a dwindling interest in golf.

MNP was hired by the owners of the golf course to assess the company's financial statusbetween 2014 and 2019 todetermine the future viability of thecourse.

The owners haveproposedclosing the course and redevelopingthe land to build a residential community but are facing pushback from nearby homeowners.

MNP found Lakeside has not been profitable since 2015, mostly due to declining membership and corporate tournaments.

MNP said it had not audited or otherwise verified the unauditedfinancial statements provided by management in compiling the report. But the firm says, based on its review of the information, it has no reason to believe it is not accurate.

One of the club's ownerssaid the external analysis reinforces the owners'case to redevelop the property.

"It's very clear, it's very obvious, and we don't want to hide anything. We want to look forward and basically explain to the City of Chestermere, to the community, that there is better use for that land and it will improve the life of all Chestermerians," said Peter Paauw, president ofSlokker Homes.

Losing money

MNP says Lakeside'srevenues dropped fromroughly $2.4 million in 2016 to $2.2 million in 2019, a rate of 9.1 per cent,due to declining memberships, green feesand tournaments.

The club currently has 154 members, down from 194in 2016.

When factoring in costs and operating expenses, MNPnoted Lakeside was losing tens of thousands of dollars every year over that same time period.

For example, it said Lakeside ran with a $104,515 deficitin 2019.

The owners say on top of that they need to update the aging clubhouse and repair its retaining walls and pathway system, among other things renovations which are estimated to cost nearly $600,000 per year for five years.

MNP says taking that into account, Lakeside would need to find a way to bring in an additional $700,000 per year, just to break even.

"The long and short of it is that the club operates at a cash loss and needs probably an injection of about $2.5million just to fix deferred maintenance," said Paauw.

The report concludes that Lakeside will not turn the financial situation around.

"We do not believe that Lakeside Golf will be able to generate these additional revenues," it says,given low oil prices, the current fiscal situation andcurrent research that showsgolf participation worldwide is dropping.

And Paauw says for those who are interested in playing golf, they are choosing better-designed courses.

"(Lakeside) was built in the mid-'90s, truly as almost a farmer field golf course. It's not the nicest golf course to play, it's not the nicest golf course to live alongside. There's a lot of golf balls that go over fences and [are] hitting houses," said Paauw.

Community pushback

Sincethe Lakeside club ownership announced it had signed a deal to partner with international developer and builder Slokker Homesto redevelop the property contingent upon approval by Chestermere city council,there hasbeen a lot of pushback in the community. Some residents bandedtogether to form the Lakeside Greens Golf Course Preservation Society and launcheda petition.

"It's very, very clear by the 2,800-plus [petition]signatures and the people that we have emailing us and reaching out to us that the City of Chestermere and the residents, the homeowners, are not, not on board with this," said Darby King-Maillot, executive director, Lakeside Greens Golf Course Preservation Society.

King-Maillot lives besidethe course. She says her whole family golfs there and they chose their home because of its location.

She believes the course should be sold off as a golf course, rather than redeveloped,because she says Chestermere needs a course.

"I just feel that if their business plan hasn't been working for them, that should not make a case for pulling out the bulldozers and putting condos in my backyard," said King-Maillot.

Paauw says he understands theconcernbut that he hopes to work with the community to come up with a design that everyone will be happy with.

"We are engaging with the neighbourhood to make sure that we communicate our intent to make everything a win-win, including increasing property values for everyone involved," said Paauw.

Slokker Homes has not submitted any applications to the city yet.

It plans on holding two online information sessions regarding the future of Lakeside. The first is set for March 9.

The City of Chestermere declined to do any interviews.Instead, it referred to a statement it released last month that's posted on the city website.

Paauw says MNPdidn't include the financials from 2020 in its report becausethey weren't complete at the time of the review.