The club says that if the neighbors do not participate, construction will begin

SALEM, Ore. — Creekside Golf Club, a country club in Oregon’s state capital less than an hour from downtown Portland, is again asking a nearby neighborhood to back its results.

In exchange for an estimated $4.2 million, the club’s owners will suspend plans to develop the property into housing for five years, according to a proposal sent to owners last week.

In the first year, 65% of the funds raised would go towards deferred maintenance and infrastructure improvements at the golf club, such as replacing pond liners, upgrading the irrigation system and deferred maintenance of the swimming pool. The remaining 35% would support salary increases for club employees. This funding allocation may vary in future years.

The 588 members of the Creekside Homeowners Association will vote on the plan on June 29.

The club has struggled for years

The plan is the latest in a series of controversial proposals to keep the struggling golf course open.

Creekside Golf Club and the Creekside Estates neighborhood were created by the same developer, but otherwise have no legal or financial connection.

But many club members live in the neighborhood, and those with a view of the golf course have an interest in preventing development. Some residents said they bought their homes thinking the golf course would still be there.

The private club is owned by Creekside Golf Course, LLC. The owners of this company are Mountain West Investment Corp. by Larry Tokarski and Terry Kelly, a former Pence/Kelly Construction partner.

In February 2016, the owners sent a letter to landlords in the area saying the club had been losing money for years.

The club threatened to sell the golf course to a property developer unless the neighbors agreed to raise their association’s dues from $30 to $90 a month in exchange for limited club memberships, raising around 400 $000 per year.

When that failed, club officials asked the city of Salem to lower the rate it charges for water, which could save the company $140,000 a year. Creekside is the only golf course in Salem that irrigates with tap water. This proposal, which would have increased residential water rates by an average of $8 per year, also failed.

Meanwhile, club officials asked club members to contribute more than $1,000 each and increased golf dues by $65 a month.

In April 2016, the owners’ association filed a lawsuit asking a judge to halt any closure or development of the golf course. They argued that the land was a key selling point for housing lots within the community, amounting to a contractual promise to maintain its operation.

In May, Tokarski filed a pre-development application with the City of Salem for a planned 156-acre, 354-unit development. At the time, city officials said stormwater and wetland issues could prevent some of that development.

In 2017, a judge ruled in favor of the club. The owners appealed and the case is still open.

A judge also ruled that the Creekside Homeowners Association should pay club owners $422,789 for legal fees spent fighting the lawsuit.

Mountain West Investment Corp. de Tokarski did not respond to an interview request.

The Creekside Homeowners Association Board of Directors referred the questions to Community Management Inc., a management company of the Portland Homeowners Association. He declined to comment.

What the owners will decide

The latest proposal comes from the Creekside Preservation Committee, a two-month group that includes representatives from the homeowners’ association board and the golf club.

Owners will be asked to vote on two separate provisions.

The first provision creates a fixed 5-year assessment of $90 per month, or $1,080 per year, per household. The fee is in addition to the $47-a-month association dues owners already pay and doesn’t come with a club membership.

The fees would bring in about $635,000 per year. After five years, the fees could increase.

Two-thirds of the members present to vote must approve the monthly dues for it to be adopted.

The second provision creates a transfer fee of 1% of the sale price of any home sold to Creekside Estates.

Since the transfer fee requires an amendment to the CC&Rs, it would require the approval of 75% of all households.

He is expected to bring in around $200,000 a year for the club.

If the owners of the club decide to close the course after five years, both provisions would be cancelled.

The proposal also contains some additional elements, which will be enacted if either provision is approved:

• During the 5 year term, Creekside Homeowners Association will have the right of first refusal on any sale of the golf course.
• The owners of the golf course will defer payments on $211,767 owed by the HOA in previous lawsuits regarding the development of the golf course. Any money raised under the proposal that exceeds the projected $835,040 per year would be used to repay that amount.
• If the golf course is closed and developed, future owners must join the owners’ association. However, the development will not have to adhere to HOA architectural guidelines.
• The Homeowners Association will not oppose the development of three lots across from the 14th green, nor the development of condominiums to be built along Creekside Drive.
• The 153-acre, 18-hole golf course was built in 1993. It was designed by traveling golf professional Peter Jacobsen.

Tracy Loew is a reporter for the Statesman Journal. She can be reached at tloew@statesmanjournal.com, 503-399-6779 or on Twitter at @Tracy_Loew.