Golf firms vying for full management of Ledges in South Hadley

  • Pete Lally, of Hatfield, plays golf at Ledges Golf Club in South Hadley Sept. 27, 2017. Gazette Staff/Carol Lollis

Staff Writer
Thursday, June 14, 2018

SOUTH HADLEY — Town officials are mulling over two bid proposals by golf management firms tasked with eliminating operating losses at the town-owned Ledges Golf Course.

In February the Select Board hired Colliers Golf Advisory Services of Philadelphia to find a business partner to take over maintenance and management at Ledges in an attempt to mitigate the financial burden on the town. At the June 5 Select Board meeting, Allen DePuy, vice president of Colliers, delivered a report on the consultant firm’s analysis of bids by Billy Casper Golf of Virginia and International Golf Maintenance of Florida.

IGM, which has maintained the golf course since 2005, narrowly received the nod of approval by Colliers. Described as a “grassroots team that is fully entrenched in the community,” the consulting firm’s decision to recommend IGM was based on the consideration of the current course conditions, the minimal cost of engagement, and their financial projections for a “full service” management.

“It is a highly credible report, very well written and I think it gives a lot of valuable information on all the aspects of the golf course,” Select Board Chairman Ira Brezinsky said. “It also tells us a lot about the golf industry and what we need to know to make a decision going forward.”

Thirty-seven firms had shown interest in the bidding process, but only two of those firms actually submitted proposals, which Brezinsky said “speaks volumes.”

“I think there are some factors that have to do with timing and other reasons but at the end of the day we need to pay attention to that, which is not a slight to the two proposers,” Brezinsky said. “Businesses are not interested in a losing proposition and this isn’t where we hoped to be.”

He said it is not particularly likely that the golf course will be making a lot of money for the town in the near future, but that it does not mean it will not make a comeback someday.

The report concluded that both firms are likely to end up running a deficit at the end of their first year.

Over the proposed five-year agreement, BCG projected decreased earnings even while raising revenues. The decrease in earnings would be due to the firm’s expectation of a rise in minimum wage in Massachusetts.

IGM’s “aggressive and positive” projections would require until year three to achieve positive profitability, according to the report.

The long tenure IGM has held at Ledges, including current Superintendent Mike Fontaine, were described as the local alternative “with a wealth of experience in the market.”

On top of IGM’s strong local presence, the report’s financial analysis of IGM’s bid means they would be a better deal for the town compared to BCG. Although both firms projected running a deficit in their first year, IGM’s would be less by about $3,000.

Revenues at Ledges have not exceeded expenses in any fiscal year since it opened in 2002. When factoring in other costs like capital losses, liability and salary costs, the town found that Ledges’ deficit to be more than $8.5 million over 15 years.

As for this year, Town Administrator Mike Sullivan said it’s been trending in a better direction. He expressed cautious optimism when mentioning the possibility of having a slight surplus for the first time this year, but noted “one pump failure can cost $20,000 or $30,000.”

“It’s still up in the air but we have lessened [operational losses],” Sullivan said.

In 2014 losses were over $300,000, but in the past three years they have managed to reduce it to under $100,000.

The options left for the Select Board are to choose either one of the companies, to prepare a new RFP, or to close the golf course, according to Brezinsky.

The South Hadley Golf Commission will review the report and the Select Board expects to make a decision at the June 19 meeting.

Luis Fieldman can be reached at lfieldman@gazettenet.com