2003: Course causes problems for Thunderbirds
Wednesday, November 9, 2011
By Scott Kauffman
Not having a title sponsor for this week’s PGA Tour Phoenix Open is the least of the Thunderbirds’ problems these days.
Just 14 months after the Phoenix area’s preeminent civic group opened Thunderbirds Golf Club, the organization that annually plays host to the wildly successful Phoenix Open recently had its $12 million course placed on the auction block.
Meanwhile, to exacerbate matters, Thunderbirds Golf Club LLC and Scottsdale-based course operator Western Golf Properties are being sued for $20 million over the death of 15-year-old Nils Beeman.
Beeman died July 19, 2002, after allegedly drinking contaminated water during a tournament held at the Thunderbirds course, which, at the time, was being managed by Western Golf, according to the suit filed Nov. 7 by the Phoenix law firm of Stinson Morrison Hecker LLP.
Beeman choked to death on his own vomit “due to probable acute viral (Norwalk) gastroenteritis,” according to the Maricopa County medical examiner’s report. Beeman was one of at least 84 participants who “suffered from severe vomiting and/or diarrhea shortly after being at Thunderbird’s Championship Course between July 16 and July 25,” according to the suit filed by Beeman’s family.
It’s all an unfortunate turn of events for the Thunderbirds, who developed their 18-hole course and adjacent nine-hole First Tee layout with the right intentions. The main focus of the 50-50 venture with local landowner Luther Alkhaseh was to provide affordable access for youths and raise money for the Thunderbirds Junior Golf Foundation.
Instead, the course became a casualty of the faltering golf economy.
Bank One decided to auction the course when the Thunderbirds notified the Phoenix-based bank last September it could no longer make debt payments on the 147-acre property. The Thunderbirds cited a weakened economy and an inability to gain tax-exempt status for the club among factors contributing to the club’s demise.
According to a source familiar with the Jan. 8 auction, a Phoenix-area buyer offered $4.8 million for the 18-hole course. Scottsdale-based Intrawest Golf has managed the facility with mild success since Sept. 23, 2002, when the club was put into receivership.
The Thunderbirds, which funded the course project in part through past Phoenix Open proceeds, walked away from the 18-hole venture after sinking an estimated $5.5 million of their own money into development and construction. The organization owed Bank One $6.5 million, according to Scott Henderson, known as Big Chief of the Thunderbirds.
The group conceded it probably overspent on a course located in a depressed part of south Phoenix.
“We probably built too nice a golf club for the risk attended to it,” said Henderson, whose organization will continue to run the First Tee facility. “Plus, we opened in mid-October, a month after 9/11, so all the assumptions on group play went to zero. . . .
“The pro forma turned out bad. With no travel, no group play . . . golf falls off the wall.”
According to Henderson, if the Thunderbirds were a for-profit organization they might “suck it up for 6 to 7 years and try to hold out.”
“But we decided to take our money and put it into charity,” said Henderson, whose organization makes $3 million to $4 million from the Phoenix Open. “We need to stay with our core competency and that is being a volunteer group that puts on a golf tournament every year and gives money to charity.
“Now we can give more money back to charity.”
As part of that mission, Henderson said his organization remains committed to the nonprofit First Tee of Phoenix program.
The Thunderbirds closed the First Tee operations late last year when “funds got tight,” but Henderson said his group was scheduled to reopen the course in late January.
That means children once again will be able to play golf for $1 on the $1.5 million, Tom Fazio-designed layout, certainly a bargain by Fazio standards.
Said Henderson: “It will be the most outstanding First Tee facility in the country. But an awful expensive one.”