Monday, March 14, 2011

Ballard Administration Ignored Troubling Signs To Award Golf Management Contract To Big Contributor

The administration of Mayor Greg Ballard clearly put the interest of a big contributor ahead of the public's interest when it expanded the parks department's relationship with Jerry Hayslett in 2009 by allowing a company he controlled to manage more city-owned golf courses. I wrote back in December 2009 about Ron West's complaint that the Ballard administration had taken away his management of the Winding River golf course to hand it, as well as other golf courses, over to Hayslett's company. Now the city has been forced to terminate Hayslett's management of the city's biggest golf course, Eagle Creek, after Hayslett defaulted on a loan he had taken out to make improvements on the course. As I wrote back in 2009:

 . . . Instead of allowing West to continue operation of the Winding River golf course, the parks department has decided to award the contract to a company owned by Jerry Hayslett, who has had the contract to operate Eagle Creek since the Goldsmith administration. Hayslett is also being awarded a contract to operate several other city golf courses as well. This is very troubling to West. He testified before the City Council's Parks & Recreations Committee last week about his concerns. He noted that Hayslett had defaulted on a contract with the City of West Lafayette to operate golf courses there and simply walked away. According to West, a major vendor for the City's golf courses wrote a letter to Lowry complaining that Hayslett would not pay for the chemicals his company had supplied to him for the city golf facilities he manages.

West sought to inform the City-County Councilors present at last week's meeting about the way the private operators are able to borrow money to operate the golf courses. As West explains, a bank would never loan the money to a private operator to make capital improvements to the golf courses because they would not be able to lien or mortgage the city-owned facilities. To allow a private operator to find private financing, the City agrees to a termination fee in an amount that allows the private operator to repay any borrowed funds for capital improvements. That acts as security in the event the City decides to terminate the private operator's contract early due to dissatisfaction with his services . . .

So why did West get shut out? He thinks it has a lot to do with politics. Hayslett is friends of former Mayor Goldsmith. He has also donated generously to the political campaigns of Republicans and Democrats alike over the years. One of the largest recipients of his political contributions has been Mayor Ballard. Hayslett contributed $4,000 to Ballard in 2008 alone . . .
Despite West's warning to the administration and the City-County Council of Hayslett's financial woes, he was allowed to take over control of even more golf courses. According to the IBJ's Scott Olson, Hayslett has now defaulted on a $3.5 million loan balance he owes on Eagle Creek Golf Club. As West had pointed out in objecting to the awarding of additional management contracts to Hayslett, the city has to act as a guarantor to repay the amounts the private operator borrows in the event of default since the lender cannot lien or mortgage the publicly-owned golf courses. Olson's story fails to pick up on the city's liability for Hayslett's debt:

Jennifer McGilvary, spokeswoman for Indy Parks, said she didn't know whether the city would assume responsibility for the balance of the contract or whether that would fall to a new operator.

“Right now, we’re still exploring all the options,” she said. “Nothing is ruled out.”

Hayslett received a 20-year, $2.5 million loan in 2000, which was refinanced for a larger amount in 2007, according to city documents.

He made a $22,350 payment in February, but has incurred several fees of at least $1,000 each for late payments, city documents show.

Hayslett did not return calls from IBJ Monday morning.

McGilvary at the parks department said the golf course will remain open during the management transition, and golfers “will not notice a difference.”

Hayslett was part of a group that operates other municipally owned courses besides Eagle Creek. He got together in 2009 with two other local professionals to form Capital City Golf.

In the summer of 2009, the city put out requests for proposals to run its 12 courses for the next 10 years. Indianapolis Mayor Greg Ballard’s administration chose five operators, including Capital City Golf.

The partnership runs A.J. Thatcher Golf Course, where Hayslett already held the contract, as well as Winding River and South Grove.

A source with Capital City Golf told IBJ on Monday afternoon that Hayslett was no longer a part of the partnership.
Olson's story notes that the moves made by the Ballard administration in 2009 with its bid decision were made because it was "looking for new ways to cover looming expenses." Instead, the administration chose to continue and expand its relationship with Hayslett simply because he was a big campaign contributor despite the evidence presented at the time that he was experiencing financial difficulties. Just another example of how Pay To Play Is the Ballard Way. Ballard gets thousands of dollars in campaign contributions from Hayslett, and the taxpayers get to pick up the tab for the $3.5 million loan on which he defaulted.


Concerned Taxpayer said...

Once again the republicans on the Council rubber stamp the mayor instead of listening to information that conflicts with the mayor's wishes.
This has become a really old story. This city is being destroyed by people who only have their own interests at heart.

Sean Shepard said...

Perhaps Councilor Coleman's proposal to privatize these sports entertainment facilities should have been given more consideration.

Downtown Indy said...

And today WTHR has a story about the Colts 'negotiating' for a better deal on their concession arrangement, which is as we know already is 'Colt's get 100%.'

Evidentally, getting the entire pie is still not enough for them.

Colts wrandle over concessions costs

I wonder if the NFL/players negotiations are taking into account the facilities/host city expenses as they hash out how to divvy up the game revenues?

Advance Indiana said...

Irsay will get exactly what he wants. There is never anyone at the table representing the taxpayers. As long as Irsay passes out free game tickets and campaign cash to Ballard and the other political insiders, that's all that matters at the end of the day. The taxpayers can go to hell.

Had Enough Indy? said...

The library system was underfunded by $800,000 this year alone. Not enough money, we were told. But, we can take these risks with unsecured loans, simply because Ballard has a campaign contributor? Can't the administration sue this guy for the money he got? And if the company running the golf courses now says Hayslett no longer is involved, why don't they pay it back? Sounds like it was their company's obligation to begin with.

As for the Colts - no, no, no, no, and no more. How greedy can these folks be? Irsay already has a tax abatement on his condo downtown. Guess with the shutout of the players, he knows there will be little to no revenue from game days this year and he needs to get the ketchup stains of the 'On the Road' manuscript.