Town of St. Paul council passed second and third readings for bylaw 1187 to guarantee a refinanced $1 million loan for the St. Paul Golf Club on Feb. 13, after a local restaurant owner objected at a public hearing prior to the meeting.
The monies borrowed will go to restructure two existing loans, including the $965,000 mortgage for a 20-year term and $35,000 as a line of credit. If the club defaults, the Town will pay the principle and interest through taxation.
Café Orleans owner and chef, Tom Barclay, raised several concerns to the bylaw at the public hearing. He asked if one bad year had put the club in a position where they needed the additional funds, what would happen if the club has another bad year.
“There isn't a business in St. Paul that hasn't had a hard time the last two or three years," said Barclay. “What have they done to tighten their belts?" He asked how many people use the course for free and how many pay.
He suggested the club may have to close the restaurant in the winter. The club should not expect the restaurant to subsidize the golf course because, “no restaurant can subsidize anything. It's not that much of a money making venture," said Barclay. He said he does not think it's fair for the taxpayers to bail the club out without it showing a better business plan.
Mayor Glenn Andersen said Barclay raised good points and asked Coun. Don Padlesky, who liaises between the club and council, to bring answers to council.
The money will go to priorities around the course and not cosmetics like a fountain, as mentioned by Padlesky at the meeting, confirmed course manager Jerrid Pasitney, by phone. The club wanted the refinancing not because it was in trouble, but because it has been unable to complete projects the last two years due to bad seasons, he said.
Projects could include a hitting net for juniors, new tee boxes and new equipment for better maintenance around the housing development.
The club may have to invest in its irrigation system, but has to wait until May to evaluate the system. The board plans to wait until June to decide which projects to pursue based on how the year is going.
The loan will add around $45,000 to the club's operations, said CAO Ron Boisvert at the meeting. The bank wants the Town to guarantee the loan because the Town owns the land, he said.
Padlesky spoke in favour of guaranteeing the loan from Servus Credit Union. The club raised its membership prices around $25 and will hold a fundraiser on March 16, he said. The new rates are on par with or cheaper than surrounding golf courses and memberships are up over last year, he said. The Tin Cup Restaurant is no longer catering to an elementary school lunch program, he added.
