Note 5 - Capital Leased Assets

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Debt and Capital Leases Disclosures [Text Block]

Note

5

. Capital Leased Assets

In

November 2003,

Avalon entered into a long-term agreement with Squaw Creek Country Club to lease and operate its golf course and related facilities. The lease has an initial term of

ten

(

10

) years with

four

(

4

) consecutive

ten

(

10

) year renewal term options unilaterally exercisable by Avalon. Under the lease, Avalon is obligated to pay

$15,000

in annual rent and make leasehold improvements of

$150,000

per year. Amounts expended by Avalon for leasehold improvements during a given year in excess of

$150,000

will be carried forward and applied to future leasehold improvement obligations. Based upon the amount of leasehold improvements already made, Avalon expects to exercise all its remaining renewal options.

During

2016

and

2017,

t

he golf and related operations entered into leases for a vehicle and golf course maintenance equipment that were determined to be capital leases. The amounts capitalized in the Condensed Consolidated Balance Sheets under the caption “Leased property under capital leases, net” relating to these assets were approximately

$0.8

million at

September 30, 2017

and

$0.3

million at

December 31, 2016.

Leased property

under capital leases at

September 30, 2017

and

December 31, 2016

consists of the following (in thousands):

	September 30,			December 31,
	2017			2016
Leased property under capital leases	$	11,515		$	10,783
Less accumulated amortization		(5,145	)		(4,748	)
Leased property under capital leases, net	$	6,370		$	6,035