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APR-12-94 WED 4:05 ADMINISTRRTION FAX N0, 2164610552 P,03 <br />GOLF REALTY ADVISQRS 617 592 5640 P•04 <br />Mayfield Yillage <br />Propoeal for GvTf Course Gonsulting 5ervices <br />Apri1 12. 1994 <br />PaSe 3 <br />the local area and interview golf course owners and operators in order ta provida a basia for <br />reventte projectiotts. ORA. will also utilizc industry data (inciuding actual operating statements <br />from existing compara6le golf aourse facxiitiea), and local market wage scale conditi4ns ta <br />esiimAte apprdpriate apetating expenses by individua! op$rating depsutmern. DotAcd <br />explanations for all assumptidns will be presented for each line item in the opemting atatenne.nts. <br />The estimates will be bued on current value (1994 dollars) inflated to futvre dotlars (to cointide <br />vvith the acquisition o£the golf oentse) based an regional inflation rat?s- T!?ese statementa would <br />inClude all depattmental xCvenues and pcpemcs to csticnate "battom iine" net operating income <br />(NOl) befose dopmiation, and debt servica? <br />ESTIMATL OF SVPPORTABLE ACQUI5TTYON COST AND DEBT SERVICE <br />1'O d0etmirld the ttue "CoSt" of acquiring che Parkview Golf CoW'Se, GRA will estirtlate t]le <br />supportable acquisicion costs and annual deb# servic:e assuming a realistic muniaipal bond <br />fsnanaing structure. We will determine+ the project's supportable debt service and acquisition cost <br />by calculating the level of debt the project caa finanoe. This catculatlon is perfomied by applyiag <br />estimated market financing tetms to the aaticipated net operaling income (NOI) for a stahiliaed <br />year ofoperatlone (tn cwrent value 1994 dolla.rs), From aur dfscusslons w{th you and prr,Umtary <br />reviow of the golf eourse, we believe that it is Iikely that.the go1P course will not be able to caver <br />its debt.strvicti bastd on the previously ttegotiated purchase price. Thaxfore, as we discussed in <br />our meeting, the Village is cantemploing acquisition of the SalfGou+rse as much for "open spaae" <br />and quality of life beneflts as the potential finatcia! bene#its. In this case, our work will identify <br />the ptobable shortfall that might be expected ifthe Village £ollowa through vn the acqu;sidon. .? <br />INVE&TiICA,TION OF AU'1'ERNATNE OPERATING SCE11iARI05 <br />If tt appears that the Parkview f3alf Course is under utilized in #he marketplacs, and couid <br />potentialfy financially bena$t from a sepositionin,g of operatitig strategy, CrRA wi11 investigpte <br />alternativE operating scenarios for the golf course after scquisition by the Village. The goal of <br />thi$ analysis would be tt? explore ways ta enhance the aperating results o£ the facility in order to <br />sninimIze the potential aperating deflcit. Redevelopment strategiea might uaclude: redesign of the <br />existing 19 holes intd a 9-hole regulation course with a high qualety driviag rangelgolf learning <br />center; a E'amily @ntertai;nmant faciliry including nsiniature golf andJar batting cages, etc.; or othes <br />recrealional facilities such as pool and baseball, football or soccer playing fields. GRA wil! <br />identify the oAG mpSt rea3istic reclevelopmeat alternatxve and prepare cstimgtes of the pre?i?na,inary <br />costs of redevelopin$ tho facility. We will then provide a projectod statexiCnt af finaneiel <br />opetating results for tho pzoperty assuming the new redevelopmextt wnario. This will yield a <br />prellmiinary rislc:reward "srapshot" of the benefits of an altarnadve use against the cast of <br />capturirig the new revenues. . <br />f30U? F2E11..'i1PACvISOFtB, lNC.