Chambers Bay Struggling Financially

[PCCraig]

It looks like a very cool place.  Loved watching the amateur, but I reiterate that with limited time and budget, why would one travel to CB over Bandon?

If they happen to be in the area? I am planning on trying to get a round or two in while in the metro area visiting a college friend in March.

[Adam Clayman]

C'mon Richard. Not even the Kremlin would've approved this.

[Mark Provenzano]

Mixed feelings here as well...played there on September 30th, a gorgeous early fall day. The out-of-county weekday rate was $155.00 + tax. (It wasn't very crowded.) They had just aerated and top-dressed the entire course, so it was a bit of a sandbox out there throughout, not just in the bunkers/waste areas. The proper thing to do would have been to charge the October rates ($89 non-res./$59 res.) based on the conditions. Counting tip to a partner's caddie (who helped everyone in the threesome out--and you really have to take a caddie the first couple times there or you'll be lost) it was over $200 spent on the day. Not the sort of thing I'd do too often.

Financial and conditioning issues aside, Chambers Bay is a whole lot of fun. Interesting holes and shotmaking options throughout. (Except for when one of our group 6-putted--he wasn't having fun there.) It can beat you up in spots, but we left with a smile. Worth a play when in the area, but not a special trip.

The other two guys I played with and the caddy had all played the Bandon courses many times. They said Chambers Bay would compare to them (when under perfect conditions), but all preferred Pacific Dunes, Bandon Dunes and Old MacDonald. But they love it as a "locals" course at senior rates.

[Steve Lang]

duuuuhhhhhhh!

$21,000,000
divided by $169/round
= 124,260.35 rounds

$21,000,000
divided by $75/round
= 280,000 rounds

we played on way back from Seattle, twilight rate

don;t need to play there again.. Bandon, well lthat's another story..

[Jud_T]

Uhh, Richard, check your facts:

http://www.businessweek.com/news/2010-10-20/bank-bailout-returns-8-2-beating-treasury-yields.html

[Richard Choi]

Jud, that is what Geithner and pals would love you to believe.

Just search about the 0% loan the banks got from the government to buy the Treasuries that pay 4 to 5%. Basically free money for the banks and didn't require any approval from the Congress. Vast majority of the profit over last couple of years in Wall Street came from that ponzi scheme.

And we haven't even mentioned all the mortgages that banks dumped to governent to stop the bleeding.

As it currently stands:

GRAND TOTAL: $4.72 TRILLION DISBURSED
$13.86 TRILLION MAX. AT-RISK
$1.93 TRILLION OUTSTANDING

http://www.sourcewatch.org/index.php?title=Financial_crisis_and_bank_bailout_resources

Open your eyes...

[Jud_T]

So now you're comparing an overnight loan with a long term treasury? That's called risk...What about the home equity loan I currently have at 1.75% that I invested in Akamai and made a 140% return?  I suppose the government subsidized that as well?  Dude, I'm all in favor of Ann Arbor's progressive pot laws, but seriously it may be time to clean the pipes.... Also, I don't know if you've checked but anyone who bought longer dated treasuries banking on the FED QE2 buyback and financing it as you say has lost their ASS over the last few months.

I'll give you the benefit of the doubt that your opinion of CB is not quite so cloudy...And RichRod has got to go....

[JC Jones]

Oooh this is fun.  And here I thought you two would be fighting over RichRod.  Fewer things are better than wolverine against wolverine.  I find it similar to women mud wrestling, both in style and intensity. 

[Richard Choi]

Jud, if government wants to give me a $100 million loan at 1% so that I can buy treasuries at 4%, I would do it in a heartbeat. And anyone in the right mind would. Who would say no to 3% free interest?

Why would anyone in the right mind lend you money at 1% so the you can turn around and lend it back to me for 4%??? Why does the government need a middle men? They could just buy the Treasuries themselves and get 4% return instead of 1%!!! This is a pure payout scheme to direct free money to Wall Street.

What risk are you talking about? If treasury fails, it pretty much means that US is in meltdown (hell, that would pretty much mean an armageddon for the entire world economy, which is why US treasury is still considered the most safe investment in the world) and short-term stuff wouldn't matter either. No one is going to bail you out if your investment in Akamai ended up in loss. The goverment has already demonstrated that they will back the Wall Street if anything goes wrong. What risk are you talking about?

And as you can see from the figures I linked, there are trillions that government is picking up for the Wall Street. If you disagree with any of the figures, I am all ears.

[Jud_T]

Don't believe everything you read:

http://activistcash.com/organization_overview.cfm/o/12-center-for-media--democracy

When the Village Voice calls these guys far left of liberal, you've really accomplished something.

[Richard Choi]

I can also say that Geithner and Bernanke are mere stooges for the Wall Street, but that really doesn't accomplish anything, does it?

Calling people names without disputing the actual fact is a classic demonstration of ad-hominem and is usually just an act of desperation because the facts are against them.

Come back when you are ready to dispute the facts.

[John Kavanaugh]

Richard,

You are not doing Chambers any favors falling for these distractions.   

[Jud_T]

Ugh...I don't usually have the patience for this type of Finance 101...but, OK, Today you borrow $100,000,000 from uncle sam at 0% (more like 0.17% in reality but let's call it 0% for arguments sake).  You then Buy $100mm of 30 year U.S. Government Bonds at 4%. Tomorrow you come into the office and realize the following:

1. You made $10,958.90 in interest overnight! Yeah!

2.  You helped the U.S. tax payer pay the balooning national debt at a slightly better rate for 30 years.

Let's even say that this wonderful positively sloped yield curve stays as is for 2 years.  Now you've made $8mm in "carry" interest!!

Unfortunately one of the following things happen:

1.  The economy is now booming because of all the stimulus and has finally gained traction and the employment rate is quickly falling back toward 5% and/or

2.  Inflation has reared it's ugly head in terms of inflation expectations or

3. U.S. Government Debt has been downgraded from AAA because of the inability of government to actually only spend what it takes in like the rest of us:

This results in year 3 in both short term, overnight financing as well as 30 year bond yields rising to 8% and, for the sake of this argument staying there till the bond matures.

At the maturity of the bond, aside from present value of money calculations, you will have lost $104mm in opportunity cost of investment...It's called a yield curve for a reason dude...

Now if your argument is that banks are too big to fail anyway, a couple points:

1.  The bankers are the bad guys for getting bailed out because some guys are "rich".  Don't know if you've actually tried to support a family of four in mid-town Manhattan on $250k, but you're not exactly living high off the hog.  The Government made back all their equity investment in the banks plus a profit...The car companies are the good guys for getting bailed out because they were the ignorant guys who got bullied by the the big bad bankers and only a handful of them make the magical $250k/year.  

2.  Your boy's Financial Reform Bill will pretty much ensure that all anyone can do is give you a nice mortgage, again if your not "rich", or a nice small business loan.  Well, they may actually be more likely to fail because THEY"LL BE MIRED DOWN IN UNNECESSARY RED TAPE and will be uncompetitive.

3.  Let me know when the Government stops subsidizing the following (for starters) before you get your panties in a bunch:

http://www.washingtonpost.com/wp-srv/nation/interactives/farmaid/

http://www.askmen.com/top_10/entertainment_150/185_top_10_list.html

http://www.sourcewatch.org/index.php?title=Estimating_U.S._Government_Subsidies_to_Energy_Sources_2002-2008

4.  The Fed has always offered loans at the discount window...before, during and after the financial crisis....

[Tiger_Bernhardt]

I think the Seattle metro area is blessed to have Chambers Bay. there have been many discussions on the politics and finances of the project over the last few years. There is more to the story than saying cost 21,000,000. There is no qstion it is a money loser and always would be if that is all there is to the story. Remember the site conditions and olbigations before course was built. Also it is large public green space with ocean views which is not free in most locations these days. The walking and running paths, viewing areas are special and very popular for Tacoma residents. The positive attention it has brought Tacoma which is a city reinventing itself has a value as well. i remember well what the Jones golf trail did for the tourist industry in Alabama's as well as its reputation and ability to expand its tourists draw from new markets.

[Kris Shreiner]

This should really come as no surprise, though some of the logic and analysis offered by posters seems disjointed. No doubt, the economic challenges have significantly hurt CB. The timing wasn't good, but other factors are in play as well that could have been prevented.

Keeping it simple...at anything over $25.00, inconsistent, often poor green surfaces = That course will be a dead loser financially.
This has been a common complaint of CB since its opening. As the price-point creeps north of $100, folks are less tolerant of marginal conditions. I believe this factor, more than any other, has cost Chambers Bay dearly.

The locals and State residents should get a break. That's just smart business.
The fact that was instituted ratherly recently shows short-sighted marketing or past greed, take your pick.

Despite the lauded Kemper Sports Management, the caddie staff there during those crucial, early days ... was inexperienced and marginally-trained... that often led to some poor experiences. When that caddie experience is a major component of your presentation, to give it the insufficient attention it requires sends visiting golfers away with negative impressions.
Though there has been inprovement, it's a shame that something which properly implemented, can be a tremendous differencemaker, for both the community and the facility, got off to such a mediocre start.

Does anyone know the marketing budget, ball-park figure, for CB? While free press for hosting an AM and U.S. Open is nice, in this climate you need to do a hell of a lot more than that to compete with the Bandon's, Pebble's and Pinehurst's. Even regular efforts to attract regional golfers requires "investment" to promote the facility.

In the end, what's there is surely better than what existed prior to the transformation and things can be improved. Any project of this scale must be evaluated on a long-term assessment. There are many layers of benefit. I for one hope that the verdict will be good in the end, but only time will yield that answer.

[Brad Isaacs]

I wish I was sold on the course. I enjoy playing Canterwood as much or more since their redesign as I did Chambers. I love to vist the pacific north west but there really is no comparison for me, as far as Bandon and Chambers Bay. I'll go to Oregon. I think the US Open is one and done at Chambers.

[Garland Bayley]

...I think the US Open is one and done at Chambers.

Lets see. They held the amateur there this year and they had some of the biggest if not the biggest crowds ever for a US Am. Practically everyone believes the event identified the best players. The grounds are huge allowing for the full US Open circus. The Pacific NW is starved for big time golf practically guaranteeing a huge gate. The course is absolutely stellar when compared to Torrey. The course is built to handle fast and firm instead of getting borderline freaky like at Pebble. The scenery is as good or better than any other Open course. I guess you have to admit it's going to be a flop as any newby can tell you.
 

[Sean Leary]

Brad,

Canterwood?? Seriously? I think CB is clearly the best course in WA. Canterwood would not  make my Top 25. Maybe even my Top 50.

[Don_Mahaffey]

Adam, let's not go overboard here. The county modeled their business after Bethpage Black and their success. It was planned during the go-go days of mid-2000's where money flowed freely. Not too many people, public or private foresaw the economic meltdown. 

After the trillions we have sunked in to support Wall Street (so they can pull out hundreds of billions in bonuses), I think we can safely retire government vs private enterprise BS. Everything is government supported at this point.

The problem with that logic is those in the golf business knew there were troubles ahead because although the mid 2000 may have been go go for some, in golf things were already starting to meltdown. Rounds and revenues were on a downward trend no matter what propaganda the NGF was putting out.

I was working in OR when the CB project was announced and I can remember discussing the project with some other golf supers and our feeling at the time was the project had no chance of financial success. Of course, none of us worked for the government so we had a different way of measuring success than those who support these types of projects.
You can count me in the camp of the money would have been better spent on meaningful social programs instead of a perpetual money pit which is what CB is well on the way to becoming.

[Tom_Doak]

Richard C:

The county may have THOUGHT they were building Chambers Bay on the Bethpage Black model, but Bethpage was not built with $21 million of debt to pay off.  Indeed, it was built with WPA money!!  Perhaps Chambers Bay was just ten years too early -- they could be building it now for a fraction of the price and employing a lot of locals in the process.

[Jeff_Brauer]

How much do they expect to take in from the AM and the Open to pay down debt?

I interviewed for that job, and recall thinking it was too much money, even then.  But they bought the property as public open space and wanted to reclaim it, so I figured if those parts of the costs were absorbed elsewhere it might make it on its own, but somehow, figured it would always need a one time subsidy to reduce its debt.

[Chris Johnston]

Anyone surprised?

$21 million is a ridiculous bubble related sum.

All part of the new (reset) template.

[Brad Klein]

They netted only $15,000 on the Amateur, and now they are looking to the lucrative tourism market from China to help stabilize the balance sheet until the flood of money from the U.S. Open. More wishful thinking.

[Peter Pallotta]

I saw a programme last night on PBS on the creation of the 1893 Chicago World Fair -- amazing what can be accomplished but so rarely is.  I don't understand the economics or the politics, but it seems that today on projects like CB (or most any Olympic Games) there are some strange/dark forces at work that actually want to ensure these projects are financial failures. It might be that failures/problems are more lucrative than successes, i.e. they keep more people working for more years trying to fix the problem, whereas success is sort of a one off (unless you're the guy who can take sole credit for the success -- but of course, those same dark forces ensure that no one person can take all the credit or blame).   

[George Pazin]

After the trillions we have sunked in to support Wall Street (so they can pull out hundreds of billions in bonuses), I think we can safely retire government vs private enterprise BS. Everything is government supported at this point.

Not quite. Everything BIG is government supported. You might consider looking up some definitions to see what that most closely resembles...

I hate someone dreaming with OPM.