Mission Viejo will spend $13 million, primarily out of its reserves, to buy the 69-acre Casta del Sol Golf Course and 35 acres south of the property.
“We did our due diligence and thought $13 million was an appropriate price for a pretty prime land,” Mayor Greg Raths said.
The council unanimously voted on Monday, Oct. 14 to approve the purchase, which city staff has been working on since the course’s owner, American Golf Corporation, put the property up for sale over the summer.
Council members said buying the land will allow the city to connect a missing link in the popular Oso Creek trail; Raths said the city applied for a $4 million state grant to help with that effort.
The purchase also will pair well with a nearby aquatic and tennis center and preserve the area for recreational uses, council members said.
“It’s not all about the money,” Raths said. “It’s about making sure there’s a golf course in the middle of the community.”
The most recent appraisal of the land, in 2008, placed the value at $12 million. However, former mayor Cathy Schlicht said the course’s condition has been deteriorating and asked the council for a new appraisal.
She also questioned whether the city would have to subsidize the course’s operation. According to one revenue projection model, the city could lose $310,000 a year by 2029.
“For this to make sense for the city, the city would have to sell off a portion of the facility to a developer,” Schlicht said.
But City Attorney Bill Curley said a new appraisal would be “a waste of public money,” given the one in 2008 was done during the Great Recession, when property values were at historic lows.
“I don’t think you can find a human who would say the property has devalued since then,” he said.
Council members also said the course could add new amenities, such as a boutique hotel or a banquet facility, that can generate revenue for the city.
“If we are going to buy it and see a constantly negative flow, I would have never approved it,” Raths said.
It’s possible the state may force the city to designate some of its property for housing as it did by rezoning three commercial and residential properties in 2007. But council members won’t likely designate the golf course for housing, Raths said. “They would be recalled immediately.”
American Golf Corporation will continue to run the course for up to three years, helping the city learn the ropes.
City staff is evaluating the golf course’s environmental condition. If the evaluation goes well, the city will be closing escrow Dec. 2, Curley said.
