The president and chief executive officer of the development company aiming to rezone and redevelop Lakeside Golf Club into a residential neighbourhood says an economic assessment of the Chestermere-based amenity shows it is not financially feasible.
Peter Pauuw, the head of Slokker Homes, said MNP recently conducted an independent economic assessment for the golf course. The accounting firm reviewed Lakeside Golf Club’s financial records from 2016 to 2020 and found the golf course has been operating at a financial loss for five years, with negative earnings before income tax as high as $116,000 in 2017 and $104,000 in 2019.
“Basically, the summary is the golf course is running on a revenue shortfall of about 32 per cent,” Pauuw said. “This revenue shortfall is so large, not only in the current economic situation in Alberta, but the economic situation surrounding golf. Golf is a very saturated market with a declining player population – the average golf course makes only one per cent of profit.”
MNP’s report also found the club hasn’t added a new member since 2017 and saw a 21 per cent drop in membership between 2016 and 2020, from 194 members down to 154 members. In addition, the club has interest costs of approximately $11,000 a year on its long-term debt, according to the report, and future capital expenditures expected to incur at an average of more than $594,000 per year for the next five years.
“While 2020 did see a spike in green fee revenue upon reopening after COVID-19 quarantine measures were lifted, it was not enough to offset the lost corporate sales, tournament revenue, event revenue, reduction in restaurant activity and reduced pro-shop sales,” stated an email from Anstice Communications, which represents the partnership between Slokker Homes and the golf club's managing partners.
The future of Lakeside Golf Club has been a source of contention in Chestermere since September 2020, when the managing partners for the club announced their intentions to partner with Slokker Homes to rezone and redevelop the 18-hole course into a new residential neighbourhood, pending approvals by the municipality.
However, many Chestermere residents have opposed the proposed development – particularly homeowners who live near the course. A group of residents formed the Lakeside Greens Preservation Society last October and drafted a petition, which has garnered nearly 3,000 signatures.
Despite MNP's findings, Darby King-Maillot, a society member whose house backs onto the greens, still believes the golf course should not be converted into a residential community.
“We do believe the golf course can be economically viable and we don’t believe failure to run a successful business should compel the City to rezone,” she said. “The business has made several choices over the years that have led to where they are.”
While the course has not been able to grow its membership, King-Maillot noted Chestermere’s population is projected to swell more than twice its current population in the next 20 years to 50,000 residents. She said this will provide a new wave of prospective golfers in the community.
“We believe there’s an appetite for the golf course and it can be run effectively,” she said.
Both Pauuw and King-Maillot noted that, ultimately, the decision on the golf course’s future will fall at the feet of Chestermere City council. Slokker Homes has not presented any kind of application to the City yet, according to Pauuw, who said the company is still in a “pre-engagement” phase. He said the company is going to host virtual information sessions on March 9 and 11, where residents will be able to share their feedback.
“We will take the feedback, work further on the vision and make sure our ideas work, and [make sure] the ideas of not only the neighbours but citizens of Chestermere at large are incorporated,” he said.
In October 2020, the City of Chestermere came out with a statement that Slokker Homes' intentions are not currently permitted under local and provincial regulations. The City's chief administrative officer, Bernie Morton, said any proposal to redevelop lands in a way that is different than their current designated land-use would require changes to local bylaws.
“Council has the authority to deny, approve or request changes to proposals of this nature, including requesting additional public engagement beyond the required public hearing,” he said.
When the topic eventually does go to council, King-Maillot said she expects councillors to be on the side of residents.
“The lake and the golf course are the two strongest landmarks we have in Chestermere,” she said. “Just like I couldn’t imagine [the City] wanting to fill in and pave over the lake to build a new development, I believe they wouldn’t do the same to the golf course.”
Pauuw said Slokker Homes understands residents do not want to lose their local links, but added people have to realize the amenity is not profitable.
“It’s impossible to imagine a revenue increase of 32 per cent,” he said.
According to Pauuw, Slokker Homes’ plans for a residential neighbourhood are not finalized yet, though he mentioned the possibility of maintaining some of the golf course's features and setting up a "Main Street" concept, including shops and mixed-housing.
“We do believe the added value of green space can be maintained to a large degree,” he said. “We are thinking to maintain, not all of the ponds, but a chunk of the ponds. We are thinking of generous buffers between the existing houses and new houses.
“On top of that, it would create a walkable community, and a walkable community, in general, adds value to all houses.”
To learn more about the upcoming information sessions and Slokker Homes' proposal, visit lakesidefuture.com