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• <br /> Deputy City Manager, Development June 2 1986 <br /> page two <br /> In accordance with the Council's authorization, a study has been prepared by <br /> Economics Research Associates (ERA) exploring the feasibility of the City <br /> purchasing the existing leasehold interest from Mr. James and restoring the <br /> site to an 18-hole golf course. Not only would this concept enhance the <br /> surrounding residential neighborhood, according to studies, but it would <br /> provide the City with an improved recreational amenity. <br /> The local Santa Ana area is particularly underserved by golf facilities, both <br /> public and private. In reviewing the ERA study, the most attractive course <br /> concept is a semi-private, 18-hole golf course with an approximate 8,000 <br /> square foot clubhouse facility located on county-owned land at Memory Lane and <br /> the river channel, currently known as Forrest Paul Park. Asemi-private <br /> course operation would offer its members, for an initiation fee and monthly <br /> dues, the opportunity to use the clubhouse facility and preference in starting <br /> times. The City would have the capability of structuring their membership to <br /> best serve its needs, with the possibility of limiting memberships to <br /> Santa Ana residents and/or businessmen. The semi-private concept also allows <br /> for use of the golf course and clubhouse by the general public under a <br /> restricted time basis. In addition, the semi-private concept offers the best <br /> economic benefits to the City. <br /> If the City proceeds with this major public facility, rehabilitation costs, <br /> not including acquiring the existing leasehold improvements, are estimated at <br /> $5 million. Construction may take approximately 2 1/Z years. This schedule <br /> could be accelerated or delayed by 6 to 12 months depending on the extent of <br /> infill resulting from construction of the drop structures, and timing of the <br /> grass planting. Net lease income generated from a semi-private course is <br /> estimated at $377,000. The value of the course can be estimated by <br /> capitalizing annual net operating income, before debt service. An appropriate <br /> capitalization rate is considered to be 7.5 percent. In all cases studied by <br /> ERA, the income produced from course operation did not justify the cost of <br /> development. However, three-fourths of the semi-private course's capital cost <br /> is justified by its income stream. In summary, the semi-private course can be <br /> provided for the citizenry of Santa Ana for a net cost of $36,335. Attached <br /> for your information is a sketch map indicating the various leasehold <br /> interests. Also attached is an informative concept on Scottsdale, Arizona's <br /> Indian Bend Greenbelt Flood Control Project. <br /> The September 17 City Council authorization also provided a $50,000 budget for <br /> architectural design services. Staff is now requesting authorization to <br /> prepare a Request for Proposals for design of a quality, semi-private golf <br /> course. It is important to solicit proposals from golf course design <br /> architects who have established themselves in the field for quality and unique <br /> design concepts. This will not only provide the City with a high-standard <br /> golf course, but will also enhance the sale of memberships necessary for the <br /> <br /> project financing. <br /> A <br /> o~a~s~ ~ d <br /> <br />