RIVER VIEW GOLF COMPANY - STAFF REPORTS 1985-1986

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IiOiElil~'b~A1V®UM r ~ . City Manager ~ 9/10/85 To: -~ecutive Director , ~ Date:. From: Economic Development Subject: WILLOWICK GOLF COURSE The following is presented as supplemental information for the item on the Riverview Golf Course / Proposed Santa Ana Greenbelt. In 1982-'83, the Redevelopment Agency was involved in nego- tiations with American Hospital Supply Corporation for a ± 30 acre site that included a portion of Willowick Golf Course and of Compesino Park. As a result of these negotia- tions, the Agency began negotiations with the City of Garden Grove, owner of Willowick, regarding Agency purchase of the entire 100 acre golf course. Ultimately, the negotiations with AHSC were unsuccessful due to additional development costs as a result of a high water table and an AHSC corporate decision to merge operations in the Riverside area. Negotiations with the City of Garden Grove were unsuccessful because the two parties could not reach agreement on the fair market value of the golf course. The Agency held that the course was zoned open space (and was under an open easement) which precluded the City of Garden Grove from developing the property, and that therefore the property should be valued as recreational, open space property. Garden Grove, on the other hand, felt that if Santa Ana acquired the property it would be developed for activities other than open space and they, therefore, should be compensated accordingly. Garden Grove's lease with Donovan Golf Course Management, Inc., expires March 31, 1995. The operator has a 15 year option at the discretion of the City. The City is guaranteed an annual lease payment of $192,000, or 200 of the green fees, cart fees, and range fees; plus 8% of the pro-shop gross revenues, which- ever is greater. In addition, the City receives 50 of the gross receipts from the sale of food and beverages. To the best of our knowledge, lease payments have never exceeded the $192 000. David N. Ream /