Hershey school's purchase of golf course helped investors

October 03, 2010|By Bob Fernandez, Inquirer Staff Writer
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  • The clubhouse was built to enhance Hershey's investment in the golf course, a spokeswoman said. Former chairman AnthonyJ. Colistra said the trust had paid $12 million for a course appraised at $4 million because the land was "strategically essential."
  • The clubhouse was built to enhance Hershey's investment in the golf course, a spokeswoman said. Former chairman AnthonyJ. Colistra said the trust had paid $12 million for a course appraised at $4 million because the land was "strategically essential."
  • Golfers putt at what is now Hershey Links. Richard H. Lenny was head of the Hershey Co. and a trust board member when the purchase covered his $75,000 investment, plus at least $15,000.

The Milton S. Hershey School, the nation's largest residential school for impoverished children, purchased a money-losing golf course at the inflated price of $12 million in 2006, saying it needed the course as "buffer land" for student safety.

The price for the Wren Dale Golf Club, which had opened in 2003, was two to three times Hershey's own appraisal and the fair-market value calculated by the Dauphin County tax office. One club investor acknowledged the deal helped "bail us out."

After acquiring the private course, the board members who administer the charitable school spent an additional $5 million to build a clubhouse, billed as Scottish-themed, with a restaurant and bar, and opened it to the public.

The deal tossed a financial lifeline to 40 to 50 local businessmen and doctors who had invested in Wren Dale and faced substantial losses. One of them was Richard H. Lenny, then-chief executive officer of the Hershey Co. and a member of the charity board that approved the purchase.

Notwithstanding the seeming conflict of interest, the Wren Dale purchase and construction of a well-appointed clubhouse appear to violate the strictly worded directives of Milton S. Hershey for spending his $7.5 billion fortune on behalf of the school and its poor students:

"All revenues must be spent directly on the care and education of the children. No monies are allowed to be or are spent for any other purpose; there are no grants to other organizations or non-MHS related spending."

Using the golf course as a buffer property between new student homes and the community falls under Milton Hershey's mission regarding care of children, Hershey School officials said. They said they feared a developer's purchasing the course, rezoning the land, and building high-density housing.

The school, for prekindergarten through the 12th grade, is free to students who qualify.

The Wren Dale purchase was supported by LeRoy S. Zimmerman, a former two-term Pennsylvania attorney general who was the designated chairman of the Hershey Trust board in 2005. An avid golfer, he now holds the chairman title.

Neither Lenny nor Zimmerman would comment, despite repeated attempts to seek their accounts.

As CEO of the candy company, Lenny had close ties to the school. He sat on the board of the Hershey Trust, which administers Milton Hershey's philanthropic legacy. The board's role is to act on behalf of the students at the Hershey School.

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