SQUAW CREEK Lease calls for $1M face-lift

Avalon Lakes is looking to acquire other area clubs that are struggling.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
The owner of Avalon Lakes Golf Club plans $1 million in improvements to Squaw Creek Country Club as part of a proposed lease.
Officials of the two courses reached an agreement in principle and expect to have it completed by the end of September, Avalon Holdings Corp. said in its recent quarterly financial report.
Howland-based Avalon would pay rent in the form of making improvements to the country club in Vienna. Rent would be valued at $150,000 a year.
Avalon would make $1 million in improvements in the first two years, with the cost of the work being credited toward future rent payments. The lease, including options held by Avalon, would last 50 years.
Neither Avalon nor Squaw Creek officials could be reached to comment about the lease or improvements.
Business goals
Dale Damioli, Squaw Creek president, had said in May that club officials were looking into alliances to stabilize its future. He said the club has had a dramatic decline in membership over the past 10 years.
Avalon has been looking to expand its golfing business for a couple years. It said in its quarterly report that several private clubs in the Warren area are struggling financially, and it is considering trying to acquire one or more of them.
Avalon tried to acquire Oak Tree Country Club in West Middlesex, Pa., in 2001 but was turned down.
Ron Klingle, Avalon chairman, has said he wants to give Avalon Lakes members more options.
After Avalon Lakes was remodeled in 1999 and 2000, a membership program was created. Members can pay $1,000 a year and $50 a round or $3,000 a year and golf for free. Greens fees were raised for nonmembers from $50 to $150.
The company has spent $11 million on course renovations and a new clubhouse, but the course hasn't made money since the changes.
The company said, however, that its number of members is increasing and course operations earned $200,000 before taxes in the second quarter. In the same quarter last year, it lost $100,000 before taxes.
Despite rainy weather this year, the course had net operating revenues of $900,000 in the second quarter, compared with $500,000 a year earlier.
Other businesses
Avalon Holdings also operates Dart Trucking and several companies related to waste disposal and managing landfills.
It said in its quarterly report that it is evaluating its "strategic direction." No transactions besides Squaw Creek are being negotiated, but the company will not necessarily be limited to its current lines of business, the report said.
The company has lost money for three straight years, and its stock has been trading at less than $3 a share for more than a year.
shilling@vindy.com