List of Potential Pine View Golf Course Operators Is Dwindling

The National Capital Commission hopes to have a new Pine View Golf Course operator in place this winter.
The National Capital Commission hopes to have a new Pine View Golf Course operator in place this winter.

Even after attempting to hand off their lease to somebody else, the City of Ottawa could still be in the golf business in 2014.  Ultimately, though, it looks as if they may be done with the Pine View Golf Course after nearly four decades.

After losing hundreds of thousands of dollars in recent years and with a lease that does not expire until April of 2024, City Council voted this past August to get out of the golf business.  Subsequently, the National Capital Commission, their landlord (at a princely sum of $1 per year), issued a Request for Proposal (RFP) earlier in November to find a replacement operator. But the RFP has been getting a lukewarm response from some.

Once the 100+ page RFP was in the hands of prospective suitors it became quite clear to some that the acquisition of the Pine View Golf Club operations might not be all that attractive.  That is, if you do not have strong financial backing and a very well-defined plan of action. Along with some tolerance for risk.

The reaction has nothing to do with past business at Pine View, but with the terms and conditions of the RFP.  The RFP defines that the potential operator must return rent, a share of profits, and even establish a capital contingency fund.  All this while accumulating no equity (the NCC owns the Real Property) and taking on costs like property taxes ( approximately $60,000 is the figure we were provided) that do not seem to have been part of the balance sheet in the past for the money-losing operation.

It is not known how many parties requested the full RFP document (some sources say it is around 20) but Flagstick staff has learned the identity of at least nine parties that initially had an interest in the Pine View lease.   The number of them that will continue the process and make a submission by the December 6th deadline is dwindling.

The timeline itself is daunting as submissions require a ten year projection for the Pine View operation, among other requirements.  Global Golf Advisors, who has been contracted to handle the submissions, will be evaluating them based on plans for the operational model, experience of the proposers, with the biggest weight put on the finances.

“It’s a high risk proposition; I’m not sure how you’ll be able to make any money,” one party who will not pursue the lease told Flagstick, asking not to be named. “There is a lot of investment that you will need to make without building any equity.”

Another party had a similar sentiment , “This business (golf) is tough enough but to be able to not only meet the submission requirements but project how we might be able to make money under the conditions proposed would be near impossible.”

At least two parties who visited the course conveyed that major costs would need to be incurred in the clubhouse just to have it at an acceptable standard to operate.

Five major industry players who initially had interest have indicated to us that they will not continue to pursue the lease and it appears that more may join them on the sidelines.

Although some may be willing to make an offer (we have confirmed at least two parties that will make a submission), Global Golf Advisors and the NCC would still have to determine if they are capable of carrying through.  A secured guarantee of the rent over the term of the lease is part of the RFP.

The plan is to have the contract awarded for Pine View by January 13th with the new operator in place by February 1st.

In this case that may end up being the familiar face of the City of Ottawa if a suitable candidate cannot be found.

That said, the city appears eager to get the operation off their hands.  Returning the course to their fold would only encourage continued public scrutiny from the taxpayers.

And the NCC would surely like to see more than a $1 of revenue coming from this property.  Other golf properties on NCC property like Champlain GC in Gatineau return hundreds of thousands of dollars to the Crown Corporation. ($280,770 in 2010 alone)

The RFP process may not be drawing as many submissions as hoped but we suspect that by February 1st, 2014 the Pine View Golf Course will be ready for business under a new operator.

Who that will be and what their complete plans are for the golf business remains to be seen, but it won’t be long before anxious golfers in the National Capital Region find out.

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