WESTLAKE — The mayor and financial director made their case Monday night for obtaining a line of credit, not to exceed $2 million, for the construction of a club house at The National Golf Club at the Westlake City Council meeting.
The council approved the request unanimously, after a discussion and input from two residents in opposition.
Westlake resident Pat Ellender said Westlake’s, “roads and infrastructure are in disarray.
“If we’re going to take out loans, let’s do it for the right reason,” she said. “We’ve thrown so much money away on that golf course — over $1 million that we’ve lost on it.”
Prior to Ellender addressing the council, Mayor Bob Hardey said he is aware of the sentiment that the city should have sold the golf course, due to its past financial uncertainty. “Well, who’s going to buy it? If I put it up for sale without a clubhouse ... you might as well say that ain’t never going to happen.”
“We know it was a loss,” Hardey continued. “We know it’s been a liability, but we’re fixing to turn it into an asset.”
Ellender said the issue should be put to a vote of the people. Council Secretary Andrea Mahfouz explained the resolution was not an item sanctioned for a public vote by the Secretary of State.
Resident Michael Bergeron noted that Westlake residents pay the highest property taxes in the parish. He said his family was cutting back on things, “because you (the city) want to spend before we bring the money in.”
Bergeron also suggested the loan would increase property taxes. Hardey said no taxes or rates will be raised and explained that a bigger tax base lowers millage rates. The mayor projected in January of this year that the clubhouse would raise real estate values by approximately 15 percent.
Prior to public input, Hardey outlined the projected financial benefits to the city from the construction of the clubhouse. He said the 165-acre development represents 650 possible homes over the next three years. He said the developers would not have spent $34 million on infrastructure – of which the city paid zero – if there were no golf course. Hardey said 650 homes will generate $356,000 in tax revenue, $156,000 in utility revenue, and $160,000 in sales taxes annually.
“We are not going after the whole $2 million,” he said. “But you can’t start a project without knowing you can fund it.”
Bergeron addressed the council again and said if he were trying to secure a loan, the bank would ask how he could guarantee some type of revenue.
Financial Director Gerry Milner responded that banks would not be bidding against each other to give the city lower interest rates if they were not confident the investment would bring a return.
Hardey noted that, unlike when he took office, banks were now competing with each other to lend Westlake money. “I think we actually have five banks that want to do business with us now,” he said.
Milner said the investment in the construction of the clubhouse is projected to increase golf club revenues by $100,000 and the planned restaurant will add another $150,000 in annul revenue. “That will cover the debt service ratio twice,” he said. “Plus it will help sell these homes.”