Crooked Creek (Act 2):  Road Abandonment Haunts City of Milton and Subdivision 7 Years Later

Crooked Creek golf course

The moral of today’s story is that decisions made at Council reverberate across the geography of Milton . . . but also across time.  The unintended consequences of the gating of Crooked Creek are perhaps unknown to most Crooked Creek residents and certainly unknown to most Miltonites.  And given the trajectory of events, additional collateral damage to the subdivision and the broader community is a distinct possibility.  In the case of Crooked Creek, the unintended consequences concern the subdivision’s golf course, but let me digress a bit to provide some context . . .

My consulting work often takes me into areas where I never imagined venturing.  And golf courses briefly became one of those areas.  In 2001, I was working with executives at Duke Power in Charlotte, NC to help them to identify new unregulated business ventures that would leverage their core capabilities.  I interviewed a number of senior executives, one of whom was responsible for Duke Power’s investments in golf courses . . . that’s right, an electric utility investing in golf courses.  At the time, the utility was achieving incredible returns on its investments in golf courses, returns that I suspected were not sustainable.  At the time, the demand for golf and for golf course lots was far outstripping supply.  And this meant that the price to play golf and the price for golf course lots were steeply increasing . . . a classic bubble in the making.  And as Economics 101 teaches us, strong price signals will spur an increase in supply to meet demand.  And in certain cases, supply will far overshoot demand . . . causing an investment bubble not to slowly deflate but to suddenly pop.  In our local golf market, we have seen the effects of golf’s boom-and-bust.  Despite the Milton’s increasing population and wealth, some of Milton’s golf courses have failed or are failing.  Two courses have shuttered, with one purchased by the City of Milton for greenspace (more about this below) and with another being redeveloped as a subdivision.  This decrease in local golf courses is driven by both the supply-demand dynamics described above, but also by another economic factor:  the rapidly increasing value of land in Milton for other more attractive commercial and residential development purposesCrooked Creek’s golf course presents an especially attractive target for (at least) a couple of reasons.  First, the golf course’s frontage along Highway 9 is zoned commercial.  And second, and perhaps more importantly, the golf course’s abutment to Highway 9 means developers have access to sewer, meaning high density housing is a distinct possibility (and developers will argue, sewer is their right) behind any commercial development built along Highway 9.

So how does City Council’s abandonment of the Crooked Creek’s roads fit into all of this?  Well, road abandonment/privatization and the eventual gating of Crooked Creek entailed significant additional expense for residents.  Residents now had to maintain their roads and streetlights.  There were capital expenses to build gates and guard houses.  And there were additional operating and maintenance expenses associated with the gates and 24-hour security.  According to some residents (source:  Laura Bentley), the significantly increased HOA fees caused many residents to drop their golf memberships and this sent the golf club into a downward spiral.  Of course, I heard this lore secondhand.  However, confirmation was provided when the City purchased (actually overpaid for) the Milton Country Club in late 2017—the City’s first land purchase using Greenspace Bond money.  The Milton Country Club had been on the market for many months, without a buyer.  In fact, a citizen had alerted the City (in June 2017) to the property’s availability, but the City failed to act.  Instead, the club was purchased for $2.65M by a golf course investment company.  Within a few weeks of the purchase, the City of Milton—late to the game—engaged the new buyer and negotiated a purchase price of $5.0M—an 89% premium.  The City’s dithering had cost citizens $2.35M.  (The City defends itself by stating that the property appraised at $5.0M.  However, it is hard to accept such an appraisal, given that the property sat for many months without a buyer and sold just a few weeks earlier for $2.65M.)  At the time, the property’s investor-owners asserted that developers were vying for the property—again difficult to believe given that the property sat for many months without being purchased.  However, the City was also advised not to worry . . . the windfall profits were to be used by the seller to purchase the Crooked Creek golf course and to make needed improvements.  Well, this was music to ears of the Crooked Creek HOA . . . it (and the City) had found a lifeline that might mitigate the unintended consequences of their poor decision to privatize the roads in Crooked Creek (and to gate the subdivision).  So on top of giving Crooked Creek an asset (Creek Club Drive—an essential public road) worth many millions of dollars, the City was now going to overpay (by a few million dollars) for the Milton Country Club to bail out Crooked Creek’s country club.  You really can’t make this stuff up!  The confirmation of this story, which I was hearing secondhand, was provided when officers of the Crooked Creek HOA spoke at Council in support of the City’s purchase of the Milton Country Club . . . I’ve never seen these folks before or since that meeting (except when they advocated for the City’s abandonment of the subdivision’s roads), but there they were at Council, in their Sunday finest, advocating for greenspace.

And, of course, the City (and Crooked Creek’s HOA) fell for the seller’s representations hook-line-and-sinker.  Chalk it up to spending Other People’s Money—i.e., the your and my hard-earned property taxes.  Well, the outcome was predictable:  the investor-sellers took the money and ran, probably laughing on their way out of Milton.  And as the city soon found out, the MCC property was very complicated—loaded down with encumbrances, including a number of tricky easements—justifying the original investor’s purchase price of $2.65M, not the City’s inflated purchase price of $5.0M.

Crooked Creek’s lifeline was a mirage.  And the golf course is still a concern.  (My hope is that the golf course’s fortunes have improved from 4 years ago.)  Seven years after it began, the story of the gating of Crooked Creek has still not concluded.  However, it quite possible it will not end well for either Crooked Creek or the City of Milton.  And it makes one wonder what costly new scheme will be concocted by the City to rectify its mistake of abandoning the roads in Crooked Creek.  Stay tuned for Act 3 . . .

Advocating For Accountability,

Tim

Postscript:  BTW, it has been nearly 4 years since the City purchased the Milton Country Club.  Using Greenspace Bond funds (aka your tax dollars) the City has purchased many other parcels, totaling several hundred acres for greenspace.  Not one square inch of city-purchased greenspace has been opened to public use.  Only recently was a plan approved for converting the MCC property to a passive park.  I will blog more about the City’s unacceptable lack of progress in opening greenspace to citizens.  Suffice to say that the City needs to commit to an aggressive timeline (12 – 18 months) to opening ALL purchased greenspace to the public.