HomeMy Public PortalAboutAB 03-183 attachment - RFQ-Nov 1 - Doug Spear1
DATE November 1, 2003
TO Dan Pillard, Director of Operations
FROM Doug Spear, Spear Consultants, Ltd.
COURSE McCall Municipal Golf Course in McCall, ID
REF Evaluation proposal
Dan, the response for your RFQ is enclosed for your consideration and, if selected, a future
opportunity to present in person the qualifications and services offered by Spear Consultants. Our
Evaluations are titled Financial Viability reports, which determines if an existing or proposed
course will be financially successful. In the past thirty-seven years we have been involve in over
350 golf projects throughout the country.
Our approach to an Evaluation (Market & Feasibility Study) is different; as we customize our report
to client individual needs supported by present and future golf market. The competed report
presented in financial terms will add credence and creditability to your determinations, approvals
and funding.
In our projections we include all costs including construction or renovation costs for course,
infrastructure, buildings; and equipment, grow-in, working capital, shortfalls, and funding costs.
Typical costs for new construction or renovation can be in the millions, depending on the quality
and physical characteristics of the site. It is logical that the quality and cost of the course
determines the level of revenues generated by players. In other words, the more one spends the
more one receives, but the market must be able to support projected rates and fees.
Our report is not a “snapshot on a given day”, but more of an on-going process to maintain a
“current status”. In any normal financial scenario there will be revisions and additions as the project
evolves and updated data is obtained. Our procedure involves a personal “computer model”
design to allow predictable revisions as the project progresses such as costs, revenues/expenses,
rates and terms, structure, etc. For this reason, our fees are normally higher than others at the
front end, but less upon completion, because we do we not charge for revisions.
Don MacLaren and myself are two active members of GCBC, a new affiliation of Golf Course
Business Consultants. This affiliation of professional golf consultants has many available talents
and expertise to offer, if and when needed. Don MacLaren has agreed to assist me in operational
review, and McCall will benefit from the services of two professionals at no additional costs.
However, in the future, services from other professionals may be necessary because the ultimate
financial success of a golf operation is determined by talented Management support by a
predetermine Marketing Plan.
Whether selected or not, if we can be of assistance in answering your questions, please don’t
hesitate to call without obligation. We appreciate the opportunity to be considered and look forward
to your reply.
Doug Spear
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P O Box 5585 Cary NC 27512 919 319 0707
Web: www.spearltd.com E-mail <doug@spearltd.com>
a professional consulting firm
specializing in the business of golf
Response to RFQ
Golf Course Market & Feasibility Study
McCall Municipal Golf Course (McCall, ID)
November 1, 2003
SPEAR CONSULTANTS
Proposal for Services
Services Page 3
Qualifications Page 4
Recent Projects Page 5
Evaluation Content Page 6
Evaluation Pages Page 7
Confidentiality Page 8
References Page 9
Agreement Page 10
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Spear Consultants SERVICES
Spear Consultants specializes in the preparation of business Evaluations for proposed or existing
golf projects entitled Preliminary Review of Financial Viability Report. The purpose of this Report is
to establish a concise written document created by an objective industry professional that
summarizes the operational and financial details of a golf project. The Report identifies market
conditions, costs, income, expenses, profitability, structure, physical aspects, risks and
opportunities. The Report is entitled Preliminary because revisions are anticipated as a project
moves from conception to reality. By being an independent report, it will add credence and
credibility to your project, as well as a "layman's" understanding of the operations.
Each Report is customized, project specific, independent and confidential. The client always
controls the use of the Report. Generally four to six weeks are needed to complete the work.
However, this is largely dependent upon the availability of information and co-operation. A Report is
an informative condensed evaluation of a project that is helpful in identifying the risks and rewards of
a golf course development and ownership. Our Reports are often prepared for the specific purpose
of determining values to share with interested investors and lenders.
Prior to funding by private or public placements, the client’s investment funds are commonly used for
the financing of the golf course design, regulatory approvals, permits and the construction bids for
the golf course improvements. The Report is organized to accommodate changes as additional
information or changes to the project require. However, if significant changes are made requiring
substantial rewriting of the Report, there may be additional charges incurred. Such situations are
rare and are always pre-approved by the client. The primary objective is to assist in determining
financial success and secondary to acquire funding for the design, construction and operation of the
golf club.
Because Spear Reports are a conceptual plan often reviewed by interested lenders and investors
the report is also dependent on information supplied by others. The fees for the professional
services of engineers, architects, land planners, appraisers, golf course designers, attorneys, etc.,
are not included and are incurred and paid directly by the project’s owners.
The fees charged for a Spear Golf Evaluation generally range from $25,000 to $40,000 depending
upon the scope of work required, the availability of information from the client and the volume of
finished product needed. (See accompanying Service Agreement)
Upon completion the client is provided with a file copy and one reproducible copy that may be
shared with others. If desired by the client, Spear may assist in identifying interested operational
options and/or funding.
Included in our assignment are the services as listed in your “scope of work to be performed”:
Economic Benefits (property taxes, local business, residents of McCall)
Operational Review (golf market, compare to competitors, course & related facilities,
operations review, marketing program and recommendations for improvement)
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Qualifications Spear Consultants, Ltd.
FACTS: Evaluations start out over hundred pages, but is condensed down to 30-40 pages of relevant facts.
Our digested reports are recognized and accepted by all major lenders and educated investors.
We use relevant facts, informed judgment and common sense in assisting our clients with their goals.
Demographics are used as a foundation, but personal contact reflects truer and more useful data.
We accent the positive elements of a project or market, but always address the negative.
We introduce, when appropriate, other necessary professional firms to assist in the project.
Our Evaluation adds creditability and credence to clients efforts with owners, lenders and investors.
An Evaluation determines:the type of course that yields greatest potential
should the project be a public, private or resort course
who are the most comparable courses in the area
is their sufficient golf demand to support this project
selected management abilities and experience
an assessment of existing and proposed marketing activities needed
actual and projected costs to renovate, build or buy
projected and attainable income from play and related sales
projected expenses for clubhouse, maintenance and administration
is there sufficient cash flow to service debt
when does stabilization occur
an acceptable debt to coverage ratio
difference scenarios other than one projected
SPEAR CONSULTANTS, LTD • P O Box 5585, Cary NC 27512 • call: 919 319 0707 • fax: 919 319 0708 e mail: doug@spearltd.com • Web Page: spearltd.com
Experienced Banker, RESI, Loan Broker, RTC, FDIC, SBA • Educator for the GCSAA and PGA
For over thirty years,Spear Consultants,Ltd.has been involved in the financial side of golf business.We have
assisted in directing clients through the potentially confusing phases of buying,constructing and financing of golf
projects.We provide numerous services,from market and feasibility studies to funding assistance and investor
opportunities.Doug Spear,a frequent speaker and writer for many golf associations,assists clients with
EVALUATIONS to identify profitable opportunities as well as associated risks.Our Evaluations will predetermine a
plan for successful implementation and a successful operation will be assured through a professional management
team incorporating a customized marketing plan.
A consulting firm specializing in the business of golf After years as a lending officer with a major bank ,
Doug Spear incorporated Spear Consultants,Ltd.in1974 as a golf consulting firm.It was founded to assist and direct
clients in obtaining necessary information to determine the financial viability of their existing or proposed golf project.
The information is obtained from the client and outside professionals,along with sitespecific information,demographics,
market conditions, etc. These reports are prepared in confidence and their use is directed solely by the client.
Assist with Loan &Equity Placements Weprepare confidential business plans,analyze debt
service ability,and generate past,present,or future financial information.In addition,we direct the client in locating
financial sources for debt and/or equity capital.We develop and prepare a concise written report for tangible and
intangible assets reflecting past,present,and future values.Such values are essential in determining interest from
lenders and investors.With our completed Financial Viability Report,we assist clients in acquiring financial sources
through approved lenders, investors, public and private placements when needed.
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Evaluations by Spear Consultants RECENT PROJECTS
Since 1968, Spear Consultants has completed over 300 Evaluations and some of our recent projects are as follows:
1993 Ironwood Golf Club - Greenville NC *1999 Smoky Mountain - Cherokee NC
1993 Oak Hills Golf Club - Columbia SC *1999 Feather Bay Golf Resort - Brownwood TX *
1993 Crickentree CC - Columbia SC *1999 Hermitage Golf Club - Clayton NC
1993 Oakwood Hills - So Pines NC *1999 Rock River - Bakersville NC *
1994 Champions Club of Gwinnett - Atlanta GA *1999 Jackson Bend - Knoxville TN
1994 Pine Island CC - Charlotte NC *1999 Pine Island - Biloxi MS *
1994 Austin Creek Golf Club - Wake Forest NC *1999 Falls River - Raleigh NC
1994 Myrtle Beach National - Myrtle Beach SC *1999 Poplar Hill Golf Club - Farmville VA
1995 Taberna Golf Club - New Bern NC 2000 Eagle Nest - Dublin OH
1996 Montpelier Golf Club - Lynchburg VA 1999 Whitetail - Mercersburg PA *
1996 Legacy Golf Links - Pinehurst NC *1999 Copper Mill - Zachary LA
1996 Professional Practice - Wilmington NC 1999 Finisterra - Holly Sps NC *
1996 Oak Grove Island - Brunswick GA *1999 Black Horse - Gettysburg PA *
1996 Fifeshire Links - Baton Rouge LA 1999 Regents' Glen - York PA
1996 Las Lobos Golf Club - Albuquerque NM 2000 Tauqueta Falls - Lookout Mt GA *
1996 Carolina National - Southport NC *2000 Royal Oaks - Maryville TN *
1996 Jamison Glen - Charlotte NC 2000 Beech Creek - Bakerville NC
1996 Maple Glen Golf Club - Cleveland OH 2000 Huntmere - Lenior NC
1996 Bay Lakes Golf Club - Elizabethtown NC 2000 Lanvale - Wilmington NC
1996 Deerbrook - Shelby NC *2000 Banana Grove - Lockport LA
1996 Olde Stage Golf Club - Garner NC *2000 Lariat Golf Club @ Stroh Ranch - Parker CO *
1996 Shannon Links - Greensboro NC 2000 Carter Plantation - Springfield LA *
1997 Cornerstone Links - Myrtle Beach SC 2000 Hampton Club - St Simons Island GA
1997 Tryon Golf - Raleigh NC 2000 Ocean Isle Beach - Ocean Isle Beach NC
1997 Asphodel Club - Jackson LA 2000 Paschel - Wake Forest NC
1997 River Bend - New Bern NC *2000 Kinderlou - Valdosta GA *
1997 Tarlton Turn - Scottsville TX 2000 Bear Trail - Jacksonville NC
1997 Crow Creek - Calabash NC *2000 Eagle Nest - Dublin OH
1997 Caroline Farms - Raleigh NC 2000 Edgewater Golf Club - Gaffney SC *
1997 Fox Squirrel - Boiling Spring NC *2001 Raintree Golf Resort - Ft Lauderdale FL
1997 Piedmont National - Lexington NC 2001 Laurel Island Resort - Kingsland GA *
1997 Oxford Hills - Oxford NC 2001 Redhawk Resort - Temecula CA *
1997 The International - Bolton MA *2001 Brierwood Golf Club - Shallotte NC *
1997 Walnut Cove - Asheville NC *2001 Northwoods Golf Club - Asheville NC *
1997 Trestle Tree - Oxford Depot NY 2001 Tee Times - Florence KY
1997 The Links of Sturbridge - Sturbridge MA 2001 Fair Oaks Golf Club - Oakland TN
1998 Steele Creek Golf Center - Charlotte 2002 Audmor Golf Course - Monroe GA
1998 Anderson Creek - Pinehurst NC *2002 Poplar Hill - Farmville VA * revisions
1998 Rolling Hills - Salisbury NC 2002 Tiger Greens Golf Resort - Perryville MO *
1998 Ocean Harbor Golf Links - Ocean Isle NC *2002 Olde Colony - Caryville TN (rev)*
1998 Cedar Grove - Marshall, TX 2002 Edgewater Golf Course - Gaffney SC (rev) *
1998 Pro Star Golf - Raleigh NC 2002 Apex Golf Club - Apex NC
1998 Jersey National - Cape May NJ 2003 Dragonfly Golf Club - Hugo OK
1998 Maple Ridge - Columbus GA 2003 Wicked Stick Golf Club - St Robert MO*
1998 The Savannah - Denham Springs LA 2003 RiverDale Golf Lodge - Nixa MO *
1998 Big Woods - Chapel Hill NC *2003 Fox Creek Golf Course - Hartsville SC
1999 Oak Hills - Columbia SC *2003 The Pointe Golf Club - Parker CO (rev)
1999 Eagle Ridge - Garner NC *2003 ArborLinks Golf Course, Nebraska City NE*
1999 Carmen Club - Richwood OH 2003 Royal Oaks Golf Club - Mannings SC *
Due to confidentiality, most projects originate under a "code name" and present name may differ (* indicates projects involving funding).
SPEAR CONSULTANTS, LTD. PO Box 5855 • Cary NC 27512 • Call 919 319 0707 • Fax 919 319 0708
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Spear Consultants, Ltd.EVALUATION
Conditions assumptions and limiting conditions of scope of work and written report
Introduction sources used in regards to analysis and projections
Certification Letter signature letter of independent review process and other professional participation
Executive Summary summary of ownership, funds needed, structure, designer, demand, management, etc.
Project project's physical characteristics, weather, roads, utilities, site data, market, and strategy
Industry & Trends background and highlights on golf course development and other trending data
Market Profile demographics (populations, education, income, etc.) for selected market area
Demand methods to determine demand from general public and participation golfers
Survey review courses within market radius of 30 miles (up to 60 miles if signature or resort)
Survey Factors capacity of rounds, weather, and playing factors
Survey Map location of courses within determined market
Survey Courses review some or all other golf courses in market area to determine play and rates
Survey Summary review of course averages comparing type of facility, play and rates
Projections ownership, professional firms involved and funds needed
Costs estimate construction costs for proposed course or acquisition costs for existing course
Assumptions explanation and definitions of projected income/expense items
Rounds estimated type and number of rounds - expressed in 18-hole equivalent
Rates & Fees projected rates, fees and revenue multipliers for a seven year period
Operations seven year projections of all revenues, expenses and net operating income
Cash Flow projections of cash flow for debt service and/or investor's distribution
Charts graphical illustration of financial performance for gross and net income
Expenses line item expenses for pro shop, maintenance, administrative and personnel
Sensitivity Analysis illustrate "shortfall" scenarios (less than projected) for worst case debt coverage ratios
Graphs list of design and construction process and procedure for a successful golf course
Definitions & Terms definitions and terms used in golf industry and this evaluation
Qualifications company profile and list of recent projects by Spear Consultants, Ltd.
Attachments various reports by other professionals used or referred to in this report
EVALUATION
Financial Viability Report
Spear Consultants, Ltd
P O Box 5585 Cary NC 27512
Spear Consultants is a golf consultancy assisting clientsthrough the complex
process of buying,selling,building,and financing golf projects.An Evaluation
identifies the profitable opportunities and known facts of a given project.
However,our process (and resulting report)goes beyond just the study of
demographic data.With over thirty years experience in the golf industry,our
reports are based on informed judgment, relevant facts, and common sense.
This confidential report titled “Review for Financial Viability”is initially
comprised of 90+pages of information.From this,we create a 30 -40 page
condensed version of the larger document.This condensed version
emphasizes the relative facts,and informs readers of the opportunities
without all the superfluous details.
An Evaluation outlines present and future opportunities to determine financial
viability,and the third party approach adds credence and credibility to client’s
efforts.The report is structured to be comprehensive and to provide vital
information to investors and lenders.
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Conditions
Introduction
Certification Letter
Executive Summary
Project
Industry Trends
Market Profile
Golf Demand
Survey Factors
Survey Summary
Projections
$
Costs
Assumptions
Rounds
Rates & Fees
Operations
Cash Flow
Distribution
Charts
Expenses
Sensitivity Analysis
Loan Request
Risks
Graphs
Definitions & Terms
Qualifications
Over 30 years
and more than
300 projects
Pages of An Evaluation An Evaluation outlines present and
future opportunities to determine financial viability.Our third party
approach adds credence and credibility to the client’s efforts.Based
on data collected during the Evaluation,a comprehensive report is
developed to provide vital information to investors and lenders.This
confidential report titled “Review for Financial Viability”is initially
comprised of 100+pages of information.From this,we create a 30 -
40 page condensed version of the larger document.This condensed
version emphasizes the relative facts,and informs readers of the
opportunities without all the superfluous details.The following outlines
a typical Evaluation:
EVALUATION
for Financial Viability
Spear Consultants, Ltd
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(for client’s file – client does not sign)
COVENANT OF
CONFIDENTIALITY
between SPEAR CONSULTANTS, LTD. and CLIENT
SPEAR CONSULTANTS acknowledges that the CLIENT has been requested to and will furnish to
SPEAR CONSULTANTS certain confidential information relating to the business affairs and
operations of the above project for study and evaluation by SPEAR CONSULTANTS. It is
acknowledged by SPEAR CONSULTANTS that information obtained for the above project is
confidential; therefore, SPEAR CONSULTANTS covenants not to disclose information pertaining to
CLIENT or its project and not to disclose that any discussions or contacts with the CLIENT have
occurred or are intended, other than as provided for in the following paragraph.
It is acknowledged that information to be furnished to Buyers / Lenders / Investors is in all respects
confidential in nature, other than information that is in the public domain through other means, and
that any disclosures or use of it by SPEAR CONSULTANTS except as provided herein may cause
harm or damage to the CLIENT, and its owners and officers. Therefore, SPEAR CONSULTANTS
covenants that Doug K. Spear will not use the information furnished for any purpose other than as
stated above, however, that (a) information furnished may be disclosed to those directors, officers,
employees and advisors of SPEAR CONSULTANTS who need such information for the purpose of
evaluating any possible transaction, and (b) any disclosure of information may be made to Buyers /
Lenders / Investors which CLIENT consents. If SPEAR CONSULTANTS or its
buyers/lenders/investors have no interest in the above, all information provided will be returned to
CLIENT.
It is further agreed that all communication regarding a possible transaction, requests for additional
information or facility tours, and any questions regarding a transaction or procedures relating thereto
will be directed to CLIENT. It is understood that SPEAR CONSULTANTS makes no independent
representation as to the accuracy or applicability of information supplied by others.
Doug K Spear
Date: 11/01/03
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Spear Consultants REFERENCES
As per your request, the following references for Spear Consultants are provided:
Better Business Bureau, Raleigh, NC
for a verbal or fax report call 919 872 9240 and enter account # 919 319 0707
(same as telephone number).
Dun & Bradstreet
for a report, call 1 800 234 3867 and enter account # 00-264-1074
Robert Fowler President – Public Finance Consultants
717 657 5450 P O Box 6347, Harrisburg, PA 17112
Gary Grubbs Director of Marketing - Bay Golf LLC
915 437 0833 451 Pine St, Suite 509, Abilene TX 97601
Ron Garl President - Garl Golf Design
863 688 8383 704 South Missouri Ave, Lakeland, FL 33815
Clay D. Brittian, Jr.Chairman - Myrtle Beach National Company
803 448 4541 P O Box 1936, Myrtle Beach, SC 29578
Jack Brennan President - Paladin Golf Marketing
813 759 6708 3019 Forest Club Drive, Plant City, FL 33567
Roger Watson President -Carolina Golf Group
919 467 3185 396 Edinburgh Dr. Cary NC 27511
Please feel free to contact, however, all information pertaining to their individual projects
are confidential.
Spear Consultants, Ltd. P O Box 5585, Cary NC 27512 919 319 0707 fax 919 319 0708
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SERVICE AGREEMENT
November 01, 2003
Mr. Dan Pillard
City of McCall
216 East Park Street Ref: existing golf club, McCall ID
McCall, ID 83638
Dear Mr. Pillard
Spear Consultants (Spear) is pleased to present you with a Consulting Services Agreement for your
consideration on the above project.
As you know, our company specializes in preparing independent and confidential reports entitled
Preliminary Review of Financial Viability to aid clients such as yourself in their evaluation of a golf
project investment potential. Spear and/or its associates hold no ownership in the project and is
harmless from any liabilities incurred as a result of this engagement. Please refer to the
accompanying description of professional services.
In fulfilling its obligation under this Agreement, Spear will perform the work necessary to complete
the report. However, client participation is needed to identify and accumulate some of the project
information. This assistance is vital and usually involves several discussions and a more formal
interim Draft Review conference. The competed report will include information supplied by you as
well as various industry sources.
Our price of preparing an Evaluation for the above project is $29,690
Payable upon signing this agreement $19,690
Payable upon “draft review” with four weeks $10,000
In addition, normal and customary travel expenses will be submitted for reimbursement at time of
payment for the Draft Review and Final Report. Generally two site visits are needed to accurately
evaluate a project and interview all the key individuals involved. Any assistance from outside
professionals is not included in this fee and not contemplated. If needed, this assistance will be
approved in advance and paid directly by the client.
My associates and I appreciate the opportunity to work with you, and I look forward to a successful
completion of this project. If you have further questions please contact me at you earliest
convenience.
Sincerely,Agreed and Accepted
Doug K Spear _____________________________ _____
President Dan Pillard Date
SPEAR CONSULTANTS LTD
P O Box 5585 Cary NC 27512
Office 919 319 0707 Fax 919 319 0708