Gurnee now 'proud owner' of Bittersweet Golf Club

Gurnee is spending more than $525,000 to take over Bittersweet Golf Club, ending a public-private venture that's had a long history of financial woes.

After huddling behind closed doors, village board trustees Monday night voted 5-0 in favor of buying out the remaining 21 years on a Bittersweet lease held by First Merit Bank, which foreclosed on the 18-hole golf course in 2009. The links opened in June 1996.

While Gurnee has owned the 240 acres the course sits on near Almond Road and Grand Avenue, a private company was supposed to control the actual operation that includes a clubhouse, pro shop and other amenities through a lease with the village. The course remained open throughout the foreclosure process.

“The village is now the proud owner of the Bittersweet golf course,” Mayor Kristina Kovarik said.

Village trustees agreed to pay $385,000 to First Merit Bank to buy out the final 21 years of the Bittersweet lease. Moreover, Gurnee public coffers will cover $119,000 in outstanding real-estate taxes and $21,058 for certain closing costs and a comprehensive land survey fee.

In all, Gurnee will pay $525,058 to take over Bittersweet. Such a move would have cost more than $2.8 million before the golf course fell into foreclosure in 2009, according to Village Attorney Bryan Winter.

Public-private ventures have not necessarily matched giddy optimism elected officials typically express when such deals are hatched. Sears Centre in Hoffman Estates is just one example of a private operator encountering financial woes and the village taking over an operation.

However, Gurnee Village Administrator James Hayner said, there won't be any harm to the public coffers in the Bittersweet Golf Club takeover. He said the village is getting a good deal on the course.

Bittersweet wound up in foreclosure lawsuits in 2000 and 2009. Village officials agreed to at least two amendments to the original lease agreement in an effort to allow the private operator to become profitable.

Under a 2004 lease amendment, Bittersweet Venture LLC was supposed to repay the village $400,000 as part of the public-private deal. Bittersweet stood to gain 7 percent of course revenue annually if it repaid the village, with a chance to receive 8 percent if certain conditions were met.

Bittersweet was supposed to share leftover profits with Gurnee, but officials said that never occurred over the roughly 15 years of the public-private venture.

Hayner and Kovarik said any future public-private partnerships would be viewed with caution. Kovarik said deals such as the one with Bittersweet don't make good financial sense for local governments.

“If that was a good business model, the banks would loan on it,” Kovarik said after Monday's meeting. “They need the public part of it because they can't get financing or they can't pull off buying the land on their own.”

Some of Gurnee's more expensive homes were built around Bittersweet. Kovarik said the golf course was viewed as a way to help spur residential development on the village's west side in the 1990s.

Hayner said Gurnee is tapping into reserves to pay the $525,028 to take over Bittersweet. Village trustees approved transferring $710,000 into a golf operations fund.

Gurnee will pay a fixed fee of $40,000 to Starbird Links Golf Management to run Bittersweet this year. Under the contract, Starbird could earn a 10 percent incentive management fee if Bittersweet revenue tops expenses.

Starbird would kick 20 percent of the course's pro shop profits — if there are any — to Gurnee.