DALLAS — Scottsdale, Ariz., will spend $10 million of the proceeds from this week’s sale of $42.5 million in excise tax revenue bonds to upgrade and improve the city-owned Tournament Players Club Scottsdale golf course and clubhouse.
The sale of 25-year bonds by the Scottsdale Municipal Property Corp. will also include $32.5 million to reimburse the city for an earlier acquisition from the state of 69 acres near the golf course and WestWorld equestrian and special events center, also owned by the city.
TPC Scottsdale is owned by the city and operated by PGA Golf Tour Properties Inc.
Scottsdale’s excise revenue bonds are rated AAA by Standard & Poor’s, AA-plus by Fitch Ratings, and Aa1 by Moody’s Investors Service. The city’s GO bonds are rated Triple-A by all three ratings agencies.
Snell & Wilmer LLC is the city’s bond counsel.
Standard & Poor’s upgraded the city’s excise tax bonds from AA-plus to triple-A in August.
“These are very, very strong bonds,” said Bill C. Davis, managing director of Piper Jaffray & Co., the city’s financial adviser. “Scottsdale’s bonds have always been attractive in the marketplace, and the S&P upgrade can only help with that.”
“The ratings and reports from Fitch and Moody’s are also strongly supportive of these bonds,” he continued. “We’re hoping for a great market on Wednesday.”
With the sale, Scottsdale Municipal Property’s outstanding debt will total $269.5 million.
“The Arizona State Land Department had some vacant parcels near these facilities that the city used for unpaved parking during large events,” Davis said. “The state wanted to sell some of the land, and the city purchased several parcels to protect the parking capacity. Purchasing the land also allows the city flexibility for a wide range of projects if these facilities are ever expanded.”
The bonds are supported by a variety of excise taxes, including general sales taxes, the city’s share of the state sales tax, and franchise fees and permits.
In fiscal 2005, those revenues totaled more than $200 million. On a per capita basis, retail sales in Scottsdale are 200% of the Arizona rate and 195% of the U.S. level.
The par-70 Desert Course at TPC Scottsdale will be overhauled to make it stand out from the many courses available to golfers in the competitive Phoenix market, Davis said.
“The city’s goal is to make that course more competitive and attract more golfers,” Davis said. “Golf is a year-around sport in this area, and the city felt it was important to bring a little higher quality of play to the Desert Course.”
The Desert Course will be shut down through most of 2007 for the improvement project. It is set to close in February after the conclusion of the FBR Open — formerly the Phoenix Open — and reopen in November.
The work will not affect the TPC’s premier course, the par-71 Stadium Course that hosts the FBR Open and its some 500,000 spectators.
The project is the first significant upgrade since TPC Scottsdale opened in 1987.
The overhaul, under the direction of golf course designer Randy Heckenkamper, will increase the length of the Desert Course to approximately 7,100 yards. Every hole will be redesigned, a TPC spokesman said, bringing the course to a championship level and increasing par from 70 to 71.
Significantly improved drainage and irrigation systems should provide more consistency in playing conditions year-round, and greater elevation changes are designed to make the course more artistic and challenging.
The existing clubhouse will be expanded with the addition of indoor seating, a covered patio, and a larger area for food preparation.
