LuLu CC to be sold?

[Robert Emmons]

Thanks Steve and Tom....interesting....RHE

[Tim Nugent]

How does this affect the property tax status - do they still have to pay PT and if they do, is it at the regular rate or a reduced rate (since the "value" of the land is deminished due to the restriction)?

[TEPaul]

Tim:

Regarding property taxes and if LuLu is or will be regarded that way anything like my farm is, that is something that falls under the purview of the county and/or state as a local or state elective designation that I used to know as Act 515. Believe it or not it technically has to do with basic land/soil use. And yes, an Act designation like that can seriously reduce property taxes.

Here's an example of what it could mean. About 10-12 years ago this whole state was reappraised on its tax base calculation (that millage rates are applied to determine property taxes). A part of my farm that had Act 515 on it was reappraised from something like a $32,000 tax base to about $1,500,000. The reappraisal company had neglected (on purpose) to consider Act 515. So we went to the county and told them about it. At that point Act 515 had been changed to some other number designation (like Act 327). When that was applied to that part of the farm the tax appraisal base number went from $1,500,000 down to $17,000!!   

[Steve_ Shaffer]

The plot thickens....


http://www.myphillygolf.com/detail.asp?id=6507

[tomgoutman]

All that matters is that the course itself survives (and is reasonably well maintained). All the rest is noise.

[Steve_ Shaffer]

Here is the latest from Joe Logan:

http://www.myphillygolf.com/detail.asp?id=6672&pid=20

[astavrides]

.

[Bob Harris]

Joe Logan reports that the members approved the sale last night:

LuLu CC members approve sale to Hansen Properties
Members of LuLu CC voted overwhelming Thursday night to sell the 98-year-old club to Hansen Properties, owner of Blue Bell CC.

If all goes as planned, the purchase will close by the end of the year, according to LuLu president Paul Muller. Beginning in 2011, LuLu, with it’s classic 1912 Donald Ross-designed course, will be dissolved as an equity club and become an non-equity sister club to Blue Bell CC, whose course is a 1994 Arnold Palmer design.

[JMEvensky]

Did the equity members receive any cash?

The reason I ask is that this has long been a topic of discussion/argument among some friends of mine.The general consensus is that an outright sale is impossible due to the tax consequences.

[Kris Shreiner]

I played an enjoyable, late afternoon, mid- October round with a member (non-equity)and dear college chum of mine this Fall. The course was in superb shape, save being a little soft in the fairways due to heavy rain one day prior. This is one cool track, features abound and the greens were FAST.  Though very fair and not extreme in any sense, intrigung internal contours made a three putt very possible if the touch and judgement weren't sound. It's a course you could play forever and not get bored.

This is great news, so long as the Hansen ownership "invests" properly, to keep a quality standard and then hires a sold membership director to restore the numbers. I also think more private clubs need to re-visit the limited, outside guest-play model so popular with our overseas mates. Sure, there are some possible tax implications if the dollar percentages of outside revenue get out of whack, but come on, there are a lot of smart folks that can overcome that obstacle. As long as the member value is respected, why not share your course and put some cash in the club's coffers from unaccompanied, visiting guests? Some of them might just possibly become members!

[Steve_ Shaffer]

More  revealed by Joe Logan except  financial details:

http://www.myphillygolf.com/detail.asp?id=6971

[Bob Harris]

Not a done deal yet.
Upper Dublin Township has 45 days to exercise their right of first refusal to purchase the club from the members. 

[Joe Bausch]

Not a done deal yet.
Upper Dublin Township has 45 days to exercise their right of first refusal to purchase the club from the members. 

Ok, Bob, what do you think are the chances of the township stepping up to the plate?!  If they do, LuLu could become one of the finest munis in the area I guess.

[Bob Harris]

Joe,

Upper Dublin exercises their option - 50/50
If they do buy, less than 25% chance that they keep it a golf course. 

Bob

[Steve_ Shaffer]

Bob,


You must have inside info as the township's right of first refusal was not mentioned in the article I referenced in #16 above.

[Steve_ Shaffer]

Joe Logan confirms Bob Harris' post above about the township's right of first refusal and questions why the township would exercise their right:

http://www.myphillygolf.com/detail.asp?id=6996&pid=11#

[Steve_ Shaffer]

The township's right of first refusal doesn't begin until they receive the offer. Once received, the township has 45 days to act. When that happens is a guess at the moment.

[Steve_ Shaffer]

Hansen's offer was finally, after much lawyering, presented to the township on Feb 1. The clock is now running on the township's decision. I'll try to update the situation.

[Steve_ Shaffer]

Here's another update. The township's decision must be made by March 18:


www.montgomerynews.com/articles/2011/02/18/ambler_gazette/news/doc4d5e956aeb534763958714.txt?viewmode=fullstory

[Steve_ Shaffer]

Joe Logan reports on the townships concerns about the buyer "stealing" LuLu. Where's Trump?


http://www.myphillygolf.com/detail.asp?id=7753&pid=20

[Patrick_Mucci]

Not a done deal yet.
Upper Dublin Township has 45 days to exercise their right of first refusal to purchase the club from the members. 

Bob,

Do you know what kind of financial condition Upper Dublin Township is in ?

That would seem to predetermine the possible outcome.

[Bob Harris]

Pat,

It's a pretty affluent township, I don't think money is a problem.  Actually, the township could potentially make out very well.
First, they already have an offer from a large local convenience store chain to purchase the area by the 10th green and 11th tee for a gas station and store.  Second, when the club took the money in 2009, the property value was diminished since it could no longer be developed. If and when the real estate market recovers the Township can rescind the conservation easement and then sell the property to a developer.

As mentioned in Joe Logan's column, they could threaten to contest the sale price and tie things up for years. 

[Malcolm Mckinnon]

I have only given this a cursory look, however, my gut feeling is things don't look good in the long term for Lulu.

How many members does Lulu now have? What revenues are there to support either party sinking 5-6 million in capital into the place and continue to operate it long term as a golf club?

Hanson's comments about the future of the golf  "industry" being in multi-club membership strike me as Bull ****.

Sorry, I'm pessimistic. Whats the next oldest Donald Ross in Phila.? Torresdale-Frankford?

[Steve_ Shaffer]

Pat,

From the Ambler Gazette article:

"The township used general fund money to buy the development rights, according to Leonard. Township residents previously approved borrowing $30 million for open space, of which only $5 million has been used to date, he said."

Upper Dublin can easlily tap into the open space money without raising taxes. The big tax bite in UD is the school tax. A new 120M high school recently opened and the already high school taxes are due to rise about 10%. Luckily, I live in another township nearby.

Malcolm,

Read the comment to Joe Logan's piece. Also, there are only 130 voting members. The club had about 300 members,most of whom were non-voting annual members.

Yes, Torresdale-Frankford is another Ross course in the area and was built in the early 1920s

[Malcolm Mckinnon]

I concur wholeheartedly with the comments...

Sad, very sad.