Karla Hart wrote in a My Turn guest opinion in the Jan. 5 Juneau Empire that the proposed lease between the city of Juneau and Totem Creek Inc. is a "sweetheart deal." Unfortunately, Ms. Hart's opposition to the project has caused her to misstate several facts.
Ms. Hart's primary complaint, first heard several years ago, is that Totem Creek is not tax-exempt under section 501(c)(3) of the federal tax code. She is correct - Totem Creek is not exempt from paying taxes. We are, however, a nonprofit corporation duly registered with the state. Any income we realize in excess of expenses must be used for improvements to the golf course or to retire debt.
Long ago, the city's legal department determined that Totem Creek's nonprofit status met the requirements of city laws and regulations in regards to this lease. Under terms of the lease and the requirements of city ordinances, Totem Creek will pay property taxes for the leased land as well as for equipment. In addition, all of Totem Creek's sales - rounds of golf, cart rentals, driving range balls, food and beverages, merchandise, etc. - will be subject to sales tax. Totem Creek will also pay rent for the leased land, based on an increasing percentage of all gross revenues (not net revenues) once a certain income threshold has been reached. The more money Totem Creek takes in, the more it pays to the city in rent.
This may be the first time an arrangement such as this, based as it is on fair market values, is attacked for being a sweetheart deal. But such is Ms. Hart's opposition to the golf course. We won't belabor this contradiction other than to say the term speaks for itself: The city will receive fair market value for surrounding land that may be purchased by Totem Creek, and for timber, gravel or rock that may be sold as a consequence of being removed from the site.
As to green fees, the lease states that resident green fees must be at least 25 percent less than the posted rate for nonresidents. This has nothing to do with the rates cruise ships might charge for a golf package (transportation to and from the course, green fees, and cart and club rental).
Finally, Ms. Hart wants the public to vote on the golf course like we did for the swimming pool, the ski area, and the skating rink. She seems to forget that the propositions we residents approved authorized the use of city funds to pay for the construction of these recreational facilities. By contrast, the golf course will be constructed entirely with private funds; no city moneys will go into the golf course.
The proposed lease is indeed a sweetheart deal - for the community. Juneau will get a first-class recreational facility that will be paid for by the people who use it. We are not asking for tax exemptions, city grants, or any other subsidies real or theoretical.
This project has been before the public for more than 10 years - subject to countless hours of negotiations, many compromises, dozens of revisions and several agreements. Resulting from of all this public scrutiny are the 95 stipulations and conditions on the permits we received from federal, state and local agencies.
If the final remaining argument is that we are not tax-exempt, then we rest our case.
Peter Metcalfe is president of Totem Creek Inc.
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