Report Finds Windfall for Golf Developer
By JULIA WELLS
Gazette Senior Writer
The developers of the Down Island Golf Club stand to clear more than $70 million in profits if they are permitted to build a private luxury golf club in the southern woodlands section of Oak Bluffs, while the financial benefits to the town and the Vineyard community will be minimal by comparison.
This is the conclusion of an economic analysis of the golf course project prepared recently by Mimi Davisson, an Oak Bluffs resident and retired chief information officer for a large corporation.
Ms. Davisson, who spent 35 years working in the field of information systems and was a director of information for a $1 billion chemical company, released her 19-page analysis to the Martha's Vineyard Commission and the Vineyard newspapers yesterday.
Developers Corey Kupersmith and Brian Lafferty want to build a private, 18-hole golf club complex and 30 houses on 277 acres of land Mr. Kupersmith owns in the southern woodlands section of Oak Bluffs.
The golf course project is under review by the commission as a development of regional impact (DRI).
Using information from the developer's own proposals going back for the last three years, and also town information, Ms. Davisson examined the economic impacts of the planned golf club project
Ms. Davisson makes no secret of her opposition to the golf club project, but she also stands firmly behind her analysis of the financial figures.
"All I can say is that the numbers speak for themselves," she said yesterday after releasing her report.
In a cover letter to the commission that accompanies the report, Ms. Davisson urges the commission to deny the project.
"The stakes are high and hard-ball politics are in play. Is exorbitant greed a legitimate reason for risking the Island's valued resources and way of life?" Ms. Davisson wrote.
"Your decision will be about balancing the public interest and the interest of a private individual. This is always a tough call. However, since the decision is about the last large tract of undeveloped land in the most densely populated town on the Island, it deserves extra scrutiny and deliberation. Once the southern woodlands are gone, we can't get them back," she wrote.
Much has been said in recent weeks about the economic impacts of the golf club project on both the town and the Island. The developers of the project and four of the five Oak Bluffs selectmen who are closely aligned with the developers have repeatedly called the project an economic engine for the town.
"Clearly the Down Island Golf Club is an impressive economic engine for the developer, not for the Island," Ms. Davisson wrote.
In her report Ms. Davisson examined both the one-time and recurring economic impacts, and found among other things that the project as it is now proposed will generate more than $70 million in profits for the developer, while the net profit to Oak Bluffs businesses will be $1.7 million. Net profits to other Island businesses will come in at $2.9 million, while net gifts to community groups are expected to be $270,000, she found.
Profits to the developer were calculated figuring the probable sale price of 350 memberships at $250,000 to $300,000 apiece ($87.5 million), the sale of 14 luxury homes ($5.7 million) and the sale of 32.5 acres to the Martha's Vineyard Land Bank ($1.6 million).
Golf course construction costs are estimated at $24 million, including the cost of the land ($7 million), pre-project costs ($2 million), the cost of construction of the golf course (18 holes at $200,000 per hole) and the cost of the golf club buildings ($11.4 million).
Ms. Davisson also added up the square footage of the proposed buildings in the golf club project, including the clubhouse, maintenance building, employee dormitories and caretaker cottage. The project calls for a total of 57,300 square feet of building space, not including the market-priced homes.
One interesting aspect of the analysis zeroes in on the proposal by the developers to sell 12.5 acres to the state Department of Environmental Management for use as a public campground. The land proposed for sale is owned by Mr. Kupersmith but was once part of the 84-acre Webb's Camping Area.
In her analysis, Ms. Davisson found that reducing the campground to 12.5 acres would also reduce it to a money-losing operation. "There is doubt that a 12.5-acre campground can make money, since revenue from the camp sites on 12.5 acres (15 per cent of the former campground) would have to support all the central services that were formerly supported by 84 acres," Ms. Davisson wrote.
Ms. Davisson also found:
* The sale of 14 market-priced homes would generate $420,000 in fees for the Martha's Vineyard Land Bank.
* If the land bank buys 32.5 acres abutting the golf course property, as proposed by the developer, the purchase price could range from $800,000 to $1.6 million, depending on the price per acre. If the land bank paid the same price per acre that Mr. Kupersmith paid for his land in the southern woodlands, the price would be $800,000 to $975,000, Ms. Davisson found.
* At an estimated sale price of $1.5 million each, the 14 homes would generate $21 million in real estate sales with gross commissions of $1.2 million.
* Gross revenue from construction of the homes would be $12 million, assuming the Island had enough construction workers available for the project. But Ms. Davisson noted that "since the Island construction trades are already in an oversold condition," profits can only be generated by bringing in off-Island construction workers, a practice that can stress the Island infrastructure.
In her analysis of recurring impacts to the town, Ms. Davisson found that after balancing income from real estate taxes and member fees against the cost to the town for services, the recurring annual impact for the town will be $48,500.
Examining the project another way, Ms. Davisson found that the net profits for the developer will add up to more than 640 per cent of the annual tax revenue in the town of Oak Bluffs.
Ms. Davisson spoke briefly yesterday about how she came to prepare her analysis of the golf club project. "I care about the Island; I care about the planet and I have been concerned about how politicized this proposal has gotten," she said.
"There is a saying we always used when analyzing projects: double the cost and halve the benefits. If the project is still worth it, then do it."