Tourism (Tennis Center/Fred) & Recreation

[Don Haddix]

I would like to sell the Tennis Center. At least one more Council Member shares that opinion, as do some Staff.

I have been pursuing this effort and have generated some interest. Time will tell if it is successful or not.

The Tennis Center continues to cost us money. In 2007, after all the income from the Fred, Tennis Center and Hotel Motel Tax was deducted from their expenses there was still a net loss of $93,000.00.

We would reduce our budget burden by at least $416,000.00 a year and be able to transfer the Hotel Motel Tax to paying for Recreation.

Due to its location, the sale would have some usage prohibitions due to its proximity to Cardiff Park and Planterra Ridge.

I believe this is good for PTC.

[jmatute]

Yes, Don. Sell it off. It was a pig to begin with. And it has been all that other stuff found in the animal barn since then.

Juan

[TomMac]

Too bad, we couldnt print "For Sale" on tennis balls and throw them to folks at the 4th parade. With continuing losses like what you've listed, the sale of the tennis center is a "no brainer".

Thanks for continuing to watch out for PTC! Have an enjoyable 4th!

[Mike King]

Don,
Keep up the good work, but by all means do not become discouraged.
Try and see if Harold will buy the Tennis Center since he used taxpayer dollars to bail out his cronies.

[Don Haddix]

Thanks guys! Mike, I will hang in there, rest assured.

For those who have no feel or knowledge of the history of the Tennis Center, here is a summary.

November 1993 to February 2001
The DAPC is amassing debt, nearly $1 million, related to venues. The debt is continually placed in a series of interest-only balloon loans through Peachtree National Bank.


Full Article (http://www.thecitizen.com/archive/main/archive-031001/news/fp-03.html)



Those who lived here before the Tennis Center was even proposed should remember this was never an accepted idea by the large majority of PTC, myself included.

It was never proposed as just another Rec facility. Like the Amphitheater it was proposed to make money. I clearly remember that being repeated over and over.

Hopefully they should also remember at first it was going to be a referendum vote, but when it became obvious it would overwhelmingly rejected it was removed and just voted in.

Membership (http://www.tenniscenter.net/memFees.htm) is not cheap. Especially if you are only an occasional player and considering the other free courts in PTC.

I believe in private hands the Tennis Center can be reconfigured to become profitable, even if the amount of Tennis is scaled back and replaces with other activities.

It does not have to be owned by PTC to enhance PTC. That notion is a non starter as an argument.

[Don Haddix]

I added a spreadsheet with data on Tourism, the Fred and the Tennis Center.

The Tennis Center is the issue at this time because there is an opportunity to sell it.

Please note the impact of the Hotel/Motel tax minus the transfer to the Airport Authority. It is listed as income but it is not earned income, it is subsidy income.

There is also a loan that includes the Fred, Tennis Center and some other issues totaling $2.7 million remaining. The original Tennis Center portion was about $1.5 million base. So there is amounts of expenditures to also be considered there as well, but not lined in the spreadsheet.

[Don Haddix]

Looking at 2007 for a full year impact, here are some numbers to consider:


A net of $497,530 from the Hotel/Motel Tax was given to Tourism to spend.
The Bricks and Mortar loan that includes work on the Fred and Tennis Center, not in the Tourism budget, but the PTC budget, was $247,367, which came out of the $310,986 of the H/M portion PTC retained.
Some of the costs of the Tennis Center are listed as Tourism expenses. They are not broken out as distinctly Fred or Tennis Center even though they are.
So, as a cost to PTC the Fred and Tennis Center is $247,367 + 497,530 = $744,897.
The Tennis Center, with the issues of what not was reported as cost, still reported a $21,599 loss and Fred a $158,955 loss.
The total Tourism reported loss, including H/M as income was $78,483.
When you deduct the H/M subsidy to see what it lost on it own, the number is $576,013, not including the Bricks and Mortar.

So, any way you look at this the Tennis Center and Fred are loosing big money.

I don't think PTC wants to get rid of the Fred. I think we need to move it to professional, private management in some form, to be determined, which I believe there is a will on Council to do now. Long overdue.

As for the Tennis Center, there is a will in PTC to sell it to private ownership that can reconfigure it to turn it into a money maker that will remove its cost to PTC and turn it into a revenue source from paying property and other taxes.

Of course, this will require some deed restrictions to stipulate the property must be such as rec, fitness, etc. I would expect it to become a mix of all, including tennis.

I would note that a projected profit of $3,000+ for 2008 was made on the Tennis Center. But here I would note those who have lived here awhile have heard this many times, but it always turned out to be a loss at the end of the year. Plus at the end of June the profit was projected to be over $17,000 for 2008.

Is there at least a 3-2 vote to sell the Tennis Center? I do not know if we have more than another 2-3.

A final note here is that the Tourism function of promoting PTC is not a money maker. So the issue there is getting maximum return on a $1 spent in other ways.

[aronaldo]

Respectfully, your math doesn't add up.

Taking the Bricks and Mortar out of the equation, using the numbers you posted.

Hotel/Motel tax to Tourism = $497,530
LESS Tennis Center 2007 loss ($21,599) = $475,931
LESS Fred 2007 loss ($158,955) = $316,976
LESS Tourism loss ($78,483) = $238,493 of Hotel/Motel Tax available

Their total loss, using the numbers you have posted, is $259,037. Still a significant loss, but about half of the number you are reporting. And according to the spreadsheet you posted (which shows the losses you report for Tennis Center and Fred but a positive to Tourism of $102,071), the total loss in 2007 was $78,483...again, a good sized number, but not even close to half a million dollars.

Which set of numbers is right?

[Don Haddix]

Respectfully, your math doesn't add up.

Taking the Bricks and Mortar out of the equation, using the numbers you posted.

Hotel/Motel tax to Tourism = $497,530
LESS Tennis Center 2007 loss ($21,599) = $475,931
LESS Fred 2007 loss ($158,955) = $316,976
LESS Tourism loss ($78,483) = $238,493 of Hotel/Motel Tax available

Their total loss, using the numbers you have posted, is $259,037. Still a significant loss, but about half of the number you are reporting. And according to the spreadsheet you posted (which shows the losses you report for Tennis Center and Fred but a positive to Tourism of $102,071), the total loss in 2007 was $78,483...again, a good sized number, but not even close to half a million dollars.

Which set of numbers is right?
You misread.

The Tourism reported loss includes the H/M as income.

My point is you cannot include the H/M when looking at how they actually performed on their own. The H/M is not earned income. It is a subsidy transferred in from a completely unrelated income source.

And the Bricks and Mortar is a cost against those facilities, directly, still coming out of the H/M. But those costs are charged to the PTC budget due to the convoluted procedures required in assuming the debt to make an otherwise illegal debt assumption legal.

Doing it your way gives a false account as to what is actually going on here fiscally. It treats the H/M as if they earned the money and in turn are using it to pay their own debts. That is not true.

The Tourism facilities are consuming $744,897 of H/M that could be used more effectively in other ways by revamping the Fred and selling the Tennis Center to turn it from a resource drain to a resource gain.

Selling the Tennis Center retains it as an asset to PTC. It does not have to be owned by PTC to be an asset to PTC. It then becomes an income to PTC versus a cost. Gain versus loss.

Selling the Tennis Center frees up H/M to be applied to other portions of Rec, in example, which lowers the millage impact on citizens' property tax.

The Tennis Center was built to make money. It never has.

[Don Haddix]

Meetings about Tourism begin with the September 2 Workshop. The Fred and Tennis Center are issues on the table.

Also, this Workshop begins discussion on Recreation in general. A very large scope including double taxation with the County, PTC tax, rationale, scope and priorities of services.

The time is past due to reexamine and realign Rec issues to better fit PTC and to allow us to live within our means.

Rec is important, but nearly so as Fire and Safety, in example. Or simply being responsible to the budgets of the citizens of PTC.

[Don Haddix]

The Workshop had a lot of good points made, including Tourism wanting to return to its true function, promoting PTC, not running the Fred or Tennis Center.

With that said due to law concerning the Hotel & Motel Tax, Tourism will still have to play a role, even if only as a figurehead to allow of legal usage of money.

On the Fred there were many opinions rendered on how to fix the issues. What was missed by many was the Fred does not exist to serve the season ticket holders only, so the acts they like are not going to be the only acts booked. But, season ticket holders are important and are customers that need to be well served, without a doubt.

We also need to seek a way to bring back those who quit going because they didn't like main genre focus of acts, attract others who just never saw acts they liked so never have attended and so forth.

There is also a further need to more fully utilize the Fred beyond just being used for musical performers.

Can it be done? We need to try.

I believe we need Tourism to be a sign off on maintenance and a manager to handle booking, ticket sales, event staffing and organization and so on. But a manager actually skilled in amphitheaters and one who has a vested in interest in the success of facility.

How to do that? I believe a good route to at least pursue is either, on the acts themselves, base pay on profit sharing, meaning does the act bring in more money than they cost to bring here and put on the stage, or a base small salary plus profit sharing. A straight salary is the least desirable road to me.

Those are pretty vague statements, I understand. They are just general guidelines because no one on Council, Staff or Tourism has the skill sets to map out this plan in further detail. We need to negotiate with prospective managers to fully more fully develop a total plan and package.

But I can confidently say business as usual, committee management and/or administration by survey isn't going to work.

This is a facility that is for the enjoyment of PTC citizens, but it must be run as a business because fiscal responsibility is a must. We need a balance of these two critical elements.

As for the Tennis Center, there is no appetite on Council, by three members, to entertain the idea of selling the facility to a private concern or a good number of citizens that showed to express their opinion.

Many said they do not use the facility but want to. Recommendations such as change of management and lowering usage fees were stated. A recognition that as a stand alone Tennis Facility it will never make money or break even was accepted.

My question here is what is the true majority opinion of PTC? Is it worth the costs? I think it is not favorable to the Tennis Center being a key facility that PTC should continue investing large sums of money in.

PTC is now a mature city. Next year we are looking at a potential 1.5 millage increase with more in the following years, fire and safety budget items have been postponed and the nature of being a commuter city is becoming non viable when people want to live closer to work.

Protection of Rec is a major priority of three on Council. While important it is not as important as fire, safety or even maintenance of essential infrastructure, especially when we have double taxation issues with the County where the County is the chief beneficiary.

Some hard decisions must be made and for that accurate input from the PTC citizens is a must.

Business as usual is not an alternative, so where do we go?

[Don Haddix]

The Tennis Center will go the way of the Fred issues. Then we will see how it all works out.

Tourism will remain in oversight as the transitional governing body. But ultimately Tourism will finally be restored to performing its true function, tourism.

This will be a time consuming process as it is more complex than the Fred. But hopefully not overtly so.

A lot of work to do both on the Tourism and Tennis Center fronts.