BATON ROUGE -- The Legislature is poised to sign off on a $9.2 million bailout of the financially struggling Tournament Players Club Louisiana golf course near Avondale on top of the $18.4 million the state has poured into the private project in the past decade.
Among the factors driving the deal is a clause in an old contract that could allow the 250-acre site to revert to the private donors of the land unless the course is maintained by professional golf tournament operators.
Proponents of the deal have pitched it as a money-saver for the state, a conclusion they reached by assuming that the current state subsidy would expand over a seven-year period at a cost of $14.6 million. But the current subsidy, which has been widely criticized, is expiring this year and no such obligation exists for that cost-saving comparison.
Supporters say the investment is the best option for the state considering the significant financial losses the course is experiencing, which could drive away the PGA Tour Inc. private operator that serves as a key link to presenting the nationally televised annual Zurich Classic tournament.
"Do we let it fall apart?" said Doug Thornton, who negotiated the agreement for the state. "This made the most sense, and it allowed us to preserve the PGA and keep the Zurich Classic."
Paying out taxpayer dollars for the golf course comes as the state is facing substantial budget cuts elsewhere.
"We ought not be in the golf course business," said state Sen. Rob Marionneaux, D-Livonia, who leads the Senate revenue committee. "Particularly this year we ought not to be doing it."
The money request appears in the state's construction projects bill awaiting action in the Senate. The line item makes no mention of golf, and Marionneaux said he was unaware of the project until it was brought to his attention last week.
Backed by Gov. Bobby Jindal, the agreement shifts responsibilities for TPC matters from the Division of Administration under the governor's office to the Louisiana Stadium and Exposition District, which oversees the Superdome and the New Orleans Arena.
Thornton, who heads the operations contractor for the Superdome Commission, said the state needed to step in to resolve a crisis that has been building for years.
Although a professional golf tournament had played for several years at English Turn in Algiers, a number of local officials in the late 1990s started planning for a new venue on the West Bank. A key promoter was state Sen. John Alario, D-Westwego.
Marrero Land and Improvement Association Ltd., led by Jefferson Parish real estate developer Buckner Barkley Jr., donated the parcel to the state, which spent $12.8 million over several years to pay for about half the cost of building the course. The club is owned by TPC at Fairfield, a joint interest of a division of Marrero Land and PGA Tour, a golf promotion group. PGA Tour contracts to operate the course and helps arrange the spring Zurich Classic.
Neither Barkley nor a PGA Tour spokesman returned calls seeking comment for this story.
The TPC firm leases the property from the state for a token cost and has made improvements such as a clubhouse and maintenance facilities. In a deal made by then-Gov. Mike Foster's top officers, the state guaranteed certain levels of golf rounds would be purchased each year through hotel concierges promoting the course. The hotel industry was not informed at first about the arrangement and was unable to meet the quota of bookings even after it learned of the deal. The five-year subsidy, which ends this year, cost the state $5.1 million in total cash payments.
The TPC firm is operating with a $10 million debt and has been making interest payments at a cost that is contributing to regular financial losses, Thornton said.
With the annual state subsidy about to expire, Thornton said the fear was that PGA Tour would give up the enterprise, walk away from course management and let the loan default. Without a professional tournament facilitator, the property could revert to Marrero Land according to the donation agreement, leaving the state in the lurch.
So the Superdome Commission negotiated a new deal with the TPC in which the state will pay off the firm's debt in exchange for basically taking ownership of the course, its clubhouse and all its facilities. The state paid $1 million last year and is scheduled to spend another $8.2 million this year.
The PGA Tour will commit to provide course management for six years, thereby preserving the club's ability to keep the Zurich Classic, Thornton said.
The cost of running the course will be relieved because the debt will be released. The PGA Tour will be responsible for any operating loss. The state will not pay the group an annual management fee of about $150,000 unless the course makes a profit, and any net operating profit will go to the state, Thornton said.
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