A country club in Shorewood Hills, Wis., is asking village officials for a bailout to reduce its rent and repair a parking lot.
The Wisconsin State Journal reported on Wednesday that village trustees had decided “to get taxpayers’ input on whether to help Blackhawk Country Club out of a financial bind” by adding an advisory referendum on the issue to the April 7 ballot.
In recent years, declining membership due to the recession and increased local competition has taken a toll on the club’s finances, eventually forcing it to take out a $1.5 million loan.
Blackhawk, which uses village-owned land, is requesting a 25 percent rent reduction, which would reduce its lease payments to about $100,000 a year, as well as $150,000 from taxpayers to repair its parking lot. (RELATED: Research Sheds Light on Corporate Welfare in the States)
Supporters claim the proposal would benefit the overall community, but some locals are skeptical about spending tax dollars to bail out a private business. “To me it smacks of corporate welfare,” one resident told the Journal.
Village president Mark Sundquist claims that most Village Board members support the deal, but also acknowledges that, “There are people who feel we are not getting as good a deal as we should,” and so would not rule out modifying or delaying the arrangement. (RELATED: Coburn Identifies $345 Million in Corporate Subsidies)
Blackhawk’s current lease, which has been in place since 1986, “requires payment based on 3.97 percent of gross revenues,” so although the average rent payment has been around $124,000 during that period, the village could see rent payments fall below $100,000 if the club continues to lose revenue and the lease is not re-negotiated.
The new lease would also grant local residents expanded access to the club, allowing them to golf up to four times per year (instead of three) and extending twice-monthly dining room privileges from three months to six months.
According to Watchdog, Blackhawk would not be the first Wisconsin company “serving wealthy lifestyles” to receive taxpayer subsidies since the beginning of the recession.
Last year, the Small Business Administration awarded a $4.1 million loan to Morningstar Golfer’s Club through a program created to help small businesses expand and survive economic hardships, even though the club had filled all of its membership openings for the past three years.
With fees ranging from $2,800 to $10,800 for annual membership, Morningstar “largely caters to middle- to upper-class clientele,” and critics feel the club should increase its self-imposed maximum of 250 members rather than seeking handouts from the government. (RELATED: Gov Lending Programs Disguise Corporate Welfare Spending)
Since 2007, Watchdog claims, the SBA “has guaranteed about $67 billion in borrowing to businesses nationwide” that sell high-end goods and services, including “Rolex jewelers, Lamborghini and BMW motorcycle dealers, plastic surgery clinics, artistic dental firms, and Napa Valley wineries.”
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