Fowlers Mill Deal May Be an Even Bigger Windfall, Boondoggle Than First Stated

Last week, Northeast Ohio Golf wrote in three different stories that the Munson Township trustees, in conjunction with the Northeast Ohio Sewer District and the Geauga County Park District, have submitted an application to the Ohio EPA in an effort to obtain $5.1 million in “water clean-up funding” to purchase — and then close — the nationally-recognized Fowlers Mill Golf Course in Chesterland.

It was also reported (based on a story in the Lake County News Herald) that Todd Peterson’s investment group, FMGC LLC, paid $3.1 million for the property in December of 2009.

Those stories concluded that courtesy of taxpayer money, the investment group potentially could earn a $2 million windfall in just nine months.

But in reality, the windfall would be much greater than $2M, as the purchase price from last December was not correctly reported by the News Herald.

According to Sharon Gingerich, the Geauga County Recorder, FMGC LLC paid $1.8 million last December for the three parcels of real property that make up Fowlers Mill Golf Course. See the auditor’s records here for details on the three parcels jointly purchased by FMGC LLC.

According to the Conveyance Document for Fowlers Mill Purchase (PDF file), FMGC LLC also paid $900K for “consideration other than real property” — i.e. the golf business, all of the operational assets not associated with the real estate.

So the total purchase amount for the real estate and the golf business assets was $2.7 million.

But it’s the $1.8M that really matters here.

If the trio of Munson Township / NEO Sewer District / Geauga County Park District obtain $5.1 of taxpayer money from the Ohio EPA then use it to purchase the Fowlers Mill Golf Course property, that means Todd Peterson and his FMGC group net a whopping $3.3 million of Ohio taxpayer dollars on this “flip” real estate transaction.

Why consider this larger amount the “net” for the investor group? Because the investors will still own all of the golf business assets after the sale of the real estate assets — i.e. merchandise, carts, maintenance equipment, food and beverage equipment, goodwill, etc. — and can sell those assets to recoup that $900K.

At the time of the sale last December, the auditor appraised the “land value” (the value that does not including any “improvements”, i.e. the buildings, the golf course development, etc.) of the three parcels at $1.1 million. So why didn’t the government trio look to purchase the property prior to the new ownership group? And since the application to the EPA is to use the land as green space (i.e. without improvements), why would any government entity consider a purchase of that property for anything more than $1.1 million?

Also at issue: the lost golf course jobs; the lost property tax / sales tax / income tax revenues from the closed golf business; the destruction of a nationally-recognized Pete Dye golf course that is already recognized as an Audubon Cooperative Sanctuary; and the growth of government-owned land within the region with no clearly significant benefit to residents.

Without the $5.1M financing from the Ohio EPA for the improvement of “water quality,” this deal most likely dies as no other funding source has yet been mentioned (and because no private group with a shred of business sense would pay $5.1M for the property in the current economy). But a funding grant through this Ohio EPA program requires a clear and direct benefit to water quality. So what water quality benefit will be gained from overpaying then closing of Fowlers Mill Golf Course? The Ohio EPA does not yet know, as they are still waiting for details from the government trio. According to Erin Strouse, the Media Relations Coordinator for the Ohio EPA, the agency has not yet received a “Project Implementation Plan” from the applicants, the necessary next-step that explains exactly the benefits gained (and how those benefits will be achieved) for the consideration of potential funding. Without that plan, it is unclear what — if any — direct benefit is expected for the quality of the Chagrin River.

The Munson Township group’s Ohio EPA application does provide a highly-generalized description of their funding request, but that description is long on geographic details and short on how the closing of this great golf course property makes the region’s water quality better:

“The Fowler’s Mill Conservation Project is one of the most significant actions that can be taken to restore the water quality of the Chagrin River. The Geauga Park District proposes to buy approximately 458 acres that is currently operated as the Fowler’s Mill Golf Course (the “Property”) in Munson Township. This exceptional project would protect and restore of over 4 miles (21,499 linear feet) of rivers and headwater streams, including 1.22 miles (6,457 linear feet) of the main stem of the Chagrin River (which is a designated State Scenic River along this stretch) and 2.85 miles (15,042 linear feet) of headwater streams. In addition, the project will protect 33.8 acres of wetlands. The Property is adjacent to and upstream from the Geauga Park District’s 603-acre Rookery Reserve, which is home to three threatened species or species of concern: the spotted turtle, Blanding’s turtle, and brook trout. The ecological integrity of the Fowler’s Mill Property is extremely important to the water quality of the Rookery. When completed, this project and the Rookery will provide continuous protection of 2.74 miles (14,457 linear feet) of the main stem of the Chagrin River.”

How is this project important to the quality of the Chagrin River? How does the closing of the golf course improve water quality? Neither of these statements are addressed with any facts in the above description. The public needs indisputable proof that closing a golf course that already follows strict Audubon practices will significantly improve water quality.

There is still time to fight the funding of this boondoggle of a project, as a decision by the Ohio EPA on the grant proposal won’t be made until October. As part of the assessment of environmental impacts associated with the Fowler’s Mill proposal, the public can submit comments for consideration by the Ohio EPA. These comments can be sent via email to Bob Monsarrat, and all comments will be considered prior to a final decision on the proposal.

It would also be wise for the public to make their feelings known to Governor Ted Strickland, the Geauga County Park Board, and the Munson Township Trustees. A letter to editors of the Plain Dealer may also shine more public scrutiny on this attempted misuse of taxpayer funds and stop it.

The state of Ohio and its counties and cities are continually complaining about the holes in their budgets. Let’s quickly and easily save $5.1 million in taxpayer dollars: contact the politicians and news outlets above, state your case, and see if common-sense business decisions and control in government spending can prevail.