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Sand Traps The Least of Worries at Golf Course

A flag marks the 16th hole at the Chesapeake Hills golf course in Calvert County. Officials have poured $4 million into the course, a big portion of which they say they are unlikely to get back. The county helped the state buy the aging course in 2002 to prevent developers from building a subdivision.
A flag marks the 16th hole at the Chesapeake Hills golf course in Calvert County. Officials have poured $4 million into the course, a big portion of which they say they are unlikely to get back. The county helped the state buy the aging course in 2002 to prevent developers from building a subdivision. (Mark Gail - The Washington Post)

In 2001, Kelley and other commissioners took aim at the golf course as part of a broader effort to lock up large tracts. Not only would the land be off-limits to developers, officials said then, the golf course would be improved enough to serve as a draw for a nearby office park under development.

"There's absolutely no question in my mind this is going to be a great project," Hale said at the time.

The Maryland Economic Development Corp. bought the course for $3.3 million, using the $800,000 Calvert provided from Program Open Space, a statewide effort to preserve parkland, and issuing bonds to finance the rest.

The bonds were not rated and were considered risky. Shoddy record-keeping at the golf course made it difficult to predict the profitability of the course once it was renovated.

To support the project in its early years, Calvert agreed to cover debt payments until 2006 if revenue failed to so do. Even with that assurance, the bonds sold slowly.

The commissioners turned to trustees of the Sheriff's Department Pension Plan and the Employees' Retirement Plan. Although some trustees had concerns, the boards agreed to invest $500,000 from each of those county funds. To do so, the trustees of each had to revise their investment guidelines.

Then-Sheriff John A. "Rodney" Bartlett Jr., a trustee of the sheriff's employee pension plan, predicted success. "It's almost a no-lose situation," he said at the time.

Any risks associated with the project were, in the minds of many, outweighed by the concern that development of the course property could push the county closer to building another school.

The county planning department said recently that the course could have yielded as many as 360 homes. That would have brought about 108 elementary school students, 47 middle schoolers and 61 high schoolers.

Although many in the real estate community say the county is overly wary of growth, the worry about schools is grounded in economic reality, said Robert Lang, a director at Virginia Tech's Metropolitan Institute. The tax revenue that residential development brings generally does not offset the cost of providing services for the additional residents, said Lang, a sociologist and demographer.

In many of Washington's outer suburbs, he said, residents want a metropolitan-based economy and a rural-oriented lifestyle, creating a natural tension. Lang calls those areas the "Cake-and-Eat-It-Too Belt."

The state economic development corporation has taken significant steps to improve Chesapeake Hills, including repairing greens and adding golf cart paths. But tee boxes remain pocked in places with patches of dirt, and sections of the patio outside the clubhouse are crumbing.

The state corporation wants to sell. In August, state auditors categorized the course as one of the corporation's "troubled projects," with a $1.3 million net deficit as of June 2006.

"The economics of the project today are just upside down," said Robert C. Brennan, the corporation's executive director.

In addition to pension investment and the original $800,000, Calvert has since paid $1.3 million under the agreement to cover debt service, and the county economic development authority has also lent the state corporation nearly $870,000.

But as it seeks to buy out the bond holders, the Board of Commissioners finds itself in the awkward position of negotiating with, among others, the trustees of the two county pension funds.

Hale, the former commissioners president, said the latest problems have led some to lose sight that the project's original goal -- halting development on a key piece of land -- was achieved. "It's easy to forget why we tried it," he said.


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