The price isn't right, at least not yet, for city officials interested in selling their interest in the Tri City Golf Course.
Just a little under a week after Pleasant Grove officials rejected American Fork's offer of $226,863 plus a percentage of this year's revenue surplus, Lehi officials rejected an identical figure. The course, located in American Fork, is jointly owned by all three cities.Mayor Guy Cash told the Deseret News that he and members of the City Council felt the offer, which would have given the city an additional 31.77 percent of accumulated revenue surplus at the end of the course's 1991 fiscal year, "was just not acceptable."
Cash and the council turned down the offer, though they are looking at selling their shares in the 18-year-old golf course, because "the price was too low," he said.
"In our opinion, that offer was not based on current fair market value for the shares. It was our choice to deny the bid and stay with the course, at least for now."
The buyout discussions began earlier this year, when Pleasant Grove Mayor David Holdaway informed American Fork Mayor B. Kay Hutchings that his city was considering withdrawing from the course. Holdaway told Hutchings that Pleasant Grove might be better served if it invested money in building its own recreational program.
That spurred American Fork's interest in running the course single-handedly, especially based upon the fact that the three cities were supposed to bear the course's operations costs equally. However, American Fork has contributed more than its partners to the course's equity fund. In fact, Pleasant Grove currently owes the fund more than $11,000 and Lehi owes approximately $21,000.
Pleasant Grove turned down American Fork's offer for reasons similar to Lehi's, with officials saying the city invested $280,000 alone since the course opened, and that market value of the shares should include non-monetary contributions to the course as well as consideration of a $750,000 federal grant used to construct the course.
According to calculations performed by American Fork's finance director, Carl Wanlass, it would cost the city $268,000 to buy out Pleasant Grove and $254,000 for Lehi's shares in the course, based on contributions as well as the course's assets.
With the course making more than $100,000 yearly, the amount realized by both Lehi and Pleasant Grove would come to approximately $260,000. Cash told American Fork officials earlier this year that the city would not accept the $254,000 offer because "it doesn't make sense to me to sell a third interest for only 10 percent of the value or less."
He also told the Deseret News that the cities should have the course appraised and then shares could be sold for figures more closely based on the course's true value. Also, if only one city bows out of the course, any possible buyouts should involve two cities buying out that one equally, Cash said. Otherwise, "it would put us in a minority position as far as any influence on the course is operated."