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City discusses buying country club

By J.D. Davidson
The Times-Journal

Published October 16, 2008

For more than 40 years, DeSoto Country Club called a vast, quiet neighborhood in Fort Payne home. Time, though, seems to be running out.

Hugh Chitwood, DeSoto’s president, told the Fort Payne City Council at a work session Thursday the club is nearly $300,000 in debt and has missed its last two payments. That leaves two options – sell or foreclosure.

“We’ve had some financial troubles at the club for quite a while,” Chitwood said. “Servicing the debt and keeping the golf course open is not something we can do any longer.”

Chitwood didn’t know how quickly foreclosure might come.

The council discussed the possibility of the buying the club, preserving the neighborhood and operating the golf course. The 60 acres carries a commercial zoning tag, which means another buying could significantly change the landscape.

Chitwood said the most recent tax assessment lists the land value at $1.2 million. A purchase price of around $287,000 would wipe out any debt but leave stockholders with no return. For each stockholder to get back $1,000, the price would jump to $482,000.

“Preserving that neighborhood is high on my list. It's an historic neighborhood, and it’s a well-kept neighborhood,” Councilman Walter Watson said. “I am concerned that if somebody did purchase it and couldn’t make a go of it about what would become of that neighborhood.

“I’m looking for the low number. We have a lot of other things to do. The question is do we have $300,000 to invest in this?”

Fort Payne City Treasurer Kenneth Pell said if the city did buy the course the goal should be to make a profit, instead of breaking even. Pell suggested the city take an option and find a buyer who would commit to keep the course open. If the course failed, then the buyer would have to come back to the city to sell.

Chitwood said requiring a potential buyer to get city approval before selling would be difficult.

The land includes the nine-hole course, a swimming pool, clubhouse and cart sheds.

Fort Payne Mayor Bill Jordan thinks the project is worthwhile, but in phases.

“My recommendation to the council would be not to go out and spend a bunch of money, but to try to operate as is and kind of phase into things,” Jordan said. “At that price, it would be a tremendous bargain to the city.”

Fort Payne Parks and Recreation Director Greg Conkle, who spent eight years helping Cullman run its municipal course, said it would take about 6,400 rounds of golf a year for the city to meet operating expenses of $162,000 a year Chitwood estimated. By comparison The Cullman Golf Course turns 28,000 rounds a year on its 18-hole layout.

“They tell me at the tourist association they have people everyday in there to see if there is a place to play,” Chitwood said. “And, we get calls all the time.”

Chitwood said a DeSoto shareholders’ meeting is scheduled for Oct. 20.

“Our hope is to keep it as a greenspace and keep it as a plus for Fort Payne,” Chitwood said. “The best chance of doing that is with the city. That is just the best thing all the way around.”

The council also discussed several issues surrounding Terrapin Hills’ sewer system. More discussion is expected at Tuesday’s regular meeting.

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