Uncertain future: Walker County ponders options for Mountain Cove Farms Resort
Walker County Commissioner Shannon Whitfield is considering the future of the county’s resort property after years of it losing money.
Whitfield said the county loves Mountain Cove Farms and supports its preservation. But he isn’t sure county management is in citizens’ best interests, suggesting private sector management as a preferable option.
“I still personally feel like the county should not be in the retail business,” he said.
Mountain Cove Farms Resort was losing roughly $400,000 per year when Whitfield took office in 2017, he said. The county was $70 million in the red, which included a lien against the resort and several other county properties to finance revenue bonds, he said.
“We got to the point as a county that we could not sustain that debt,” he said.
Because of the lien, the county could not sell Mountain Cove Farms, and Whitfield hesitated to seek private investment while the property’s status as collateral on a loan muddied the waters for leasing it.
Whitfield said the county has cut expenses, slashed its debt by $30 million and also repaid all of those bonds so that it owns all of its buildings and properties free and clear, including Mountain Cove Farms.
Now the county is better positioned to seek proposals from private investors to manage the facility or possibly to purchase it.
The county will weigh these options in early 2020. The county’s Development Authority will oversee the process for requesting proposals.
Mountain Cove Farms has also become a destination wedding venue, with 29 weddings already booked for 2020, and the facility is attracting more events, like the Forever Bluegrass Festival and Vintage Market Days next fall, Walker County Public Relations Director Joe Legge said.
“Our goal would be that all existing contracts for 2020 be honored by those responding to the RFP (request for proposal),” Legge said.
Not competing as a business
The commissioner acknowledged that the venture is “still losing a bit, but we’re making progress.” He noted that the facility lost $70,000 in fiscal 2018, a fraction of its losses for preceding years.
“It’s getting closer to a break-even point,” he said.
A solid financial footing should make management or purchase more attractive to potential bidders.
He is proud that the number of nights booked has climbed dramatically from 162 nights in 2016 to 908 nights in 2018. The facility is on track to exceed 1,000 total nights booked for 2019.
The government should not compete with private sector lodging businesses, such as Hidden Hollow Resort in Chickamauga, he said. For the same reason, he stopped alcohol sales at the country store at Mountain Cove Farms.
“The county has no business in the alcohol sales business,” he said. “Local government should only be in the business of taxing alcohol.”
Mountain Cove Farms has persistently drained the county’s finances. One audience member at a recent commissioner’s meeting asked about the future of the property as the buildings are due for maintenance.
A history of financial woes
In 2008 the county and state partnered to purchase and preserve the Mountain Cove estate.
The state bought nearly 2,000 acres to set aside for permanent conservation. The county purchased the 285-acre property, including stables, cabins, barn and a Civil War-era house, for $2.2 million to serve as a resort and wedding business.
In the following five years, it lost nearly $1.5 million, prompting the county to consider outsourcing its operation.
In 2016 the county requested proposals to lease the property. But the process was unsuccessful, including the county receiving a bid of questionable legitimacy.
Meanwhile, in 2015, the resort property was used as collateral for a $15.2 million bond, repayable over 20 years, to help the county pay off a $10 million loan.
The Walker County Development Authority issued bonds, using as collateral the county-owned civic center, agriculture center, two industrial parks and Mountain Cove Farms.
Proceeds from the bonds were used to repay a New York-based hedge fund specializing in municipal credit instruments, for its extending a $10 million letter of credit to the county, about half of which was used towards county guarantees of loans for Hutcheson Medical Center.
This article originally ran on northwestgeorgianews.com.