ESCONDIDO, Calif.–(BUSINESS WIRE)–On September 14, the Escondido City Council voted unanimously to award a five-year contract for management and operation of the Reidy Creek Golf Course to Escondido Golf, LLC, an affiliate of Petaluma-based CourseCo, Inc. JC Resorts operated the course since its opening in 2002, but according to a City of Escondido staff report, the property failed to achieve levels of income that would have enabled it to pay back or subsidize tax-exempt Lease Revenue bonds issued by the City in April 2001 for the construction of the golf course, forcing the Escondido General Fund to make debt service payments that average about $361,000 per year.
The San Diego Union-Tribune called Reidy Creek a “municipal money pit” in October 2018, and Escondido councilmembers criticized provisions of the contract with JC Resorts. In response to concerns, the new contract will have a five-year term with a four-year extension option instead of a ten-year term, and the operator will receive an incentive payment of 10% of net profit instead of an incentive payment of .75% of gross revenues regardless of the profitability of the course.
In January, Sierra Club North County Group, Climate Action Campaign and the hotel workers’ called on the Escondido City Council to replace JC Resorts as golf course operator and to consider alternative uses for the site, such as housing and open space. The groups stated that “We do not understand the rationale behind a contract that increased JC Resorts’ management fees even as taxpayers had to kick in money to subsidize the operation.”
JC Resorts’ two remaining municipal golf course contracts expire within the next five months; the firm’s contract to operate the Crossings at Carlsbad expires in February 2023 but may be terminated without penalty or cause after certain notice is provided to the firm, and the firm’s contract to operate the Encinitas Ranch Golf Course expires in December 2022. JC Resorts faces five competing bids to operate the Encinitas course.
UNITE HERE Local 11 is a labor union representing over 32,000 hospitality workers in Southern California and Arizona who work in hotels, restaurants, universities, convention centers and airports.