Orange residents are invited to decide in a referendum on Tuesday, February 16, whether or not to purchase the 287-acre Race Brook Country Club for a purchase price of $8.5 million. If approved, the town will bond for $8.6 million at a time of record-low interest rates. The current club would continue to run the operation and the responsibility for the upkeep; in return the club will make a lease payment to the town over 40 years, which will pay off the town’s debt.
The Board of Selectmen decided to schedule a full-day referendum, with polls open from 6 a.m. to 8 p.m. Tuesday at High Plains Community Center.
Residents also can get an absentee ballot. However, those who wish to vote absentee have to keep the Presidents Day holiday in mind, as Town Hall will be closed on Monday, February 15. Absentee ballots can be picked up at the Town Clerk’s office until Friday, February 12; and dropped off in the outside ballot box in front of Town Hall by 8 p.m. the day of the referendum. Town Clerk Patrick O’Sullivan said by February 2, he had already received some 300 absentee ballot requests.
Virtual Town Meeting: During a virtual Town Meeting February 2 on Zoom, First Selectman Jim Zeoli told his audience of some 140 “You are buying an asset, whether they (the club) thrive or not.” He emphasized that a bi-partisan Board of Selectmen had voted unanimously to recommend the purchase.
The Zoom meeting allowed people to submit comments in the chat area or by emailing them ahead of time. But instead of having people take turns at the microphone, as they normally would during a Town Meeting, Zeoli read the questions and comments aloud and then answered them along the way.
The financing generated many questions. Zeoli said at the end of a 20-year bond, the town will have spent $10.3 million. For the club the lease payment will be spread over 40 years and will total $10.6 million. “Their return to the town will be greater than the expense of the 20-year bond,” Zeoli said. “This is not a bailout.” The lease payment would be $250,000 for the first five years, then increase to $380,000. At the same time the town would lose $125,000 in property tax income.
By stretching the lease over 40 years, the club will be relieved of some of the debt pressures it has been operating under. For the town, bond payments would start in September 2022.
Taxes will make up the difference between the debt payment for the town and the lease payment by the club. Zeoli said that for a home worth about $360,000 the purchase would add roughly $52 to the yearly tax bill; a $700,000 home would see a $105 increase, and the homeowner of a $1 million home is looking at a $158 tax increase. These figures are estimates until the financing is finalized.
Club President Steven Pepe at the Town Meeting explained how the club came to this juncture. He said the club had invested heavily in infrastructure updates in the early 2000s, and was looking to reduce long-term debt. It hired Milone and McBroom to look at the property and they identified 18 lots around the perimeter of the property. That came to the attention of the First Selectman who reached out to them to find out what was going on. The negotiation had to be confidential, Zeoli said. As soon as the talks became public knowledge, the club was approached by developers.
“We did talk about purchasing just a part of the property,” Zeoli said in response to one question. “But that didn’t help the club solve its problem.” The money they would be able to raise from selling a portion of the land was not enough to satisfy the banks.
“Many residents asked if the club is going bankrupt,” Zeoli said. He said an appraisal was done by Kerin & Fazio and included a review of the business operations. The town auditors deemed the club’s books in good condition. It is a not-for-profit enterprise, but a 501©7, not-for profit organization.
Benefits to the town: The selectmen all stressed how it would benefit the town to prevent large-scale development on those 287 acres, as a housing development could have serious implications for the school system and municipal services, requiring large investments to keep up with a growing town.
In addition, this is an investment in preserving the character of the community, Zeoli said. “This is something we do for future generations – your children, grandchildren, great-grandchildren.” Should the club fail at some point, the town would at least have control over the land, and can decide what to do at that time.
Selectman Mitch Goldblatt made reference to the Plan of Conservation and Development, which identifies Race Brook Country Club as a priority open space parcel, “and we have the ability to make that happen.” Unlike nearly any other land purchase of the town, with this deal there will be a significant revenue stream to the town over the next 40 years. “Every lease payment we receive is more than we have received for any other land holding in Town,” Goldblatt said.
More than a decade ago the town purchased Ewen Farm for approximately $100,000 per acre – and this purchase would cost less than $30,000 per acre. “Based on the current cost of building lots, this is a bargain,” Goldblatt said.
Many critics pointed to the experience of neighboring Country Club of Woodbridge, which saddled that town with years of debt payments and internal strife over what to do with the property. “Woodbridge bought a bankrupt property that had been closed and was not operating,” Zeoli explained. “The buildings were in poor condition and the town paid $7.4 million and put money into it and thought they could operate it. It was too far gone for the Town of Woodbridge to make it work.”
A number of people wanted to know whether the golf course would be open to Orange residents. Although officials have brought this up during their conversations with the club, it is a business decision, Zeoli said, and not in their hands.
“We are purchasing the land and buildings, not the business of operating a golf course,” he said. He pointed out that other golf courses in town, including Oak Lane which straddles the Woodbridge/Orange town line, and Grassy Hill Country Club, might object to the town working exclusively with one competitor. “We do not want there to be a conflict of interest or hurt their businesses,” he said.
The town owns over 1,200 acres of open space for things like jogging or birdwatching, Zeoli said. “This one is for a different use.”
By Bettina Thiel – Orange Town News Correspondent