City deals with Totem Creek over golf leasing

Posted: Monday, March 01, 2004

The city is in talks with Totem Creek Inc. to lease land for an 18-hole golf course in North Douglas and sell additional acreage for housing units, city Lands and Resources Manager Steve Gilbertson said.

Totem Creek wants to lease about 130 acres for the golf course and buy 270 surrounding acres that would be part of a housing development integrated into the golf course design, Gilbertson said. Those acreage amounts are still being negotiated, he said.

Totem Creek is a local non-profit group developing the proposed course that would sit within the Peterson Creek watershed. Another company would enter into a contract with Totem Creek to develop land for housing, Gilbertson said. The city plans to give Totem Creek a limited amount of time to purchase the land. Otherwise it will sell it to another party for housing development use, he said. The length of time Totem Creek has to buy the property is still being negotiated.

Totem Creek wanted to develop a golf course, but found it could not get financing without adding housing to the plans, board president Peter Metcalfe said. If Totem Creek could have gotten the financing, it would have just built a golf course, he said.

"We believe the potential of building housing will be a key factor in financing," Metcalfe said.

The majority of golf courses in the United States are surrounded by housing, because it creates a more attractive financial package for investors, Gilbertson said. Developers cannot make as much money subdividing lots compared to building houses on those lots, he said.

The city would be willing to break down the sale of the land into "manageable components to ensure the success of the project," Gilbertson said. For example, a developer could build 50 units and move on to another segment once that was successful, he said. The housing units may be a mix of single-family homes, condominiums and townhouses.

In the next couple of weeks, Totem Creek is unveiling a business plan that will lay out the financial needs of the construction and operation of the course, Metcalfe said.

The proposed course, about a mile past the end of North Douglas Highway, is on a wooded, gentle slope of city land mixed with wetlands, and about a half mile above Peterson Creek, a salmon and trout stream.

The North Douglas Homeowners Association is tracking the latest plans. Association President Ellen Ferguson said she was not surprised housing is being planned for the golf course because most courses include it. Ferguson said she was pleased housing was being discussed now, instead of after the course were completed. The association has invited Gilbertson to its meeting in March to provide details about plans.

Traffic congestion was the main concern when the association conducted a survey about the golf course about three years ago, and it continues to be a concern, Ferguson said. Residents in North Douglas may have to contend with the effects of a second channel crossing and other developments.

"It's changing the character of living out here," she said. "They're wondering what kind of development they'd want."

Pesticide use on the course also remains a big concern, Ferguson said. Five to 10 families use Peterson Creek for their drinking water.

Totem Creek is narrowing the boundaries of the golf course to eliminate wetlands, stream buffers and other sensitive areas that will remain in a protective status, Metcalfe said.

Further, the turf of a golf course will improve the water quality because it acts as a filter, intercepting silt and pollutants, he said.

Totem Creek and the city are still negotiating the price of the 35-year lease and the option for Totem Creek to renew it. The city has no plans to sell the land for the course itself, Gilbertson said, because it wants to ensure Juneau has an 18-hole public golf course. The city also has no plans to fund the course with public money.

From the time the lease is signed, Totem Creek will have five years to show proof of financing and the bonds in place to ensure it can build a golf course. At that time, the lease will start. Course construction will take about three years, during which time no revenue will be generated, Gilbertson said. Metcalfe estimates the course will start making money within eight years of the groundbreaking.

Local residents would pay 25 percent less in greens fees, Gilbertson said. The Juneau Golf Club has about 300 members, but 3,000 are likely to golf once the course is built, Metcalfe said. Juneau already has a privately-owned nine-hole course off Industrial Boulevard in Mendenhall Valley.

Gilbertson and Totem Creek would present terms of a lease proposal to the Juneau Assembly Committee of the Whole in April. The proposal would then go before the Planning Commission, which would likely make recommendations to the Assembly. The Assembly would hold a public hearing and vote on adopting an ordinance. If adopted, City Manager Rod Swope would have the authority to enter the city into terms of a lease agreement.

The option to purchase acreage for housing development is subject to planning commission approval. The commission would review any impacts housing would have on the area including water quality and the protection of wetlands

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