Chambers Bay Struggling Financially

[JC Jones]

The word is that one of the two winners of last night's $355mm Mega Millions drawing is from Washington.  I wonder if Richard will follow through on his pledge to support Chambers Bay

[Garland Bayley]

Doc

What you are forgetting is that Rustic has a top whack charge of $60 or $70 AND it is quite walkable.  I sure would be more enticed to tee it up there rather than CB for its top whack and from the coverage I saw on tv that course looks to be a harsh walk. 

Why was the county held on the hook for the mining cleanup?  Is it possible the mining company paid money for a cleanup at an earlier date, but left it to the county to do the job?  Or perhaps the county bought the land at a cheap rate knowing the cleanup had to be done?  It just seems an odd setup to me.

Ciao

Sean,

Have you walked either of these courses? I see very little difference in the walks. Chambers Bay has no walk like the climb to the 16th tee at Rustic. Personally, I am not particularly conscious of the walks tee to green as I am engaged in the game. It is the walks green to tee that stand out for me, and Chambers wins for me on that account.

I don't know the history of the mining cleanup responsibilities. I looked on Wikipedia and found that the county bought the 930 acres of land in 1992 for 33 million. Don't dwell on the "cleanup". There was really no environmental mitigation to do that I know of. Cleanup means turning the land into something that could grow grass for a golf course. Perhaps a more appropriate thing to think of is the cost overruns that RGD encountered when they discovered they had a huge expense to remove rock from Rock Creek Cattle Company.

[Adam Clayman]

Dr. Garland, It's not so much their arduousness as it is their necessity. Why would you design a walking only course and have those long walks, in a setting that is nothing special? As I recall the walk to #3 has one's back to the water view.

[Garland Bayley]

Dr. Garland, It's not so much their arduousness as it is their necessity. Why would you design a walking only course and have those long walks, in a setting that is nothing special? As I recall the walk to #3 has one's back to the water view.

I believe you mean the walk to #4. It is the worst walk at Chambers Bay, but it is hardly the problem the walk to the 16th tee at Rustic is.
Chambers does provide a cart shuttle for that walk. Last time there I declined the shuttle and arrived less than 30 seconds later than the shuttle riders.

The other two walks of about the same length are done downhill facing the view over Puget Sound. You can't call that "a setting that is nothing special." Other than those three, the walks are not untypical of a modern course.

[Richard Choi]

Adam, my understanding is that Bandon has bent mixed in with fescue. CB is almost all fescue, especially the greens, which is very rare in US. And the same walk for #3 serves as the walk between #14 and #15, and you get to face the water at that time.

[Michael Dugger]

Adam, my understanding is that Bandon has bent mixed in with fescue. CB is almost all fescue, especially the greens, which is very rare in US.

That's not really true.  Most courses are a blend of grasses...including Bandon...including CB....including Ballyneal.

This document states as much RE: CB....

http://www2.cybergolf.com/kemper/images/232/Turfgrass.pdf

About 6% Colonial Bent in the CB mix.

Conversely, I pulled this from a thread about Old Mac.  Seems Bandon has eliminated the bent.  

Tom Jefferson writes:

"The current seed mixture for Old Macdonald (and all the other turf areas here) is as follows: Bridgeport II Chewings fescue, 35%; Barswing Chewings fescue, 25%;  Barcrown Creeping Red fescue, 20%; (and seed coating 20%).  That mixture has changed slightly (I believe) since the first season's seeding, but I couldn't say exactly how.

The seed mixtures have evolved since the initial seeding of Bandon Dunes, then Pac, Trails, and now Old Mac, chiefly by the reduction in % by weight of the colonial bent component, culminating in the absence of bent in the current mix.

If I sound like I know what I am talking about, it is only because Eric Johnson and I just went out and got a current seed tag from the seed room!"

[PThomas]

Dr. Garland, It's not so much their arduousness as it is their necessity. Why would you design a walking only course and have those long walks, in a setting that is nothing special? As I recall the walk to #3 has one's back to the water view.

same issue as at Erin Hills

[Garland Bayley]

Dr. Garland, It's not so much their arduousness as it is their necessity. Why would you design a walking only course and have those long walks, in a setting that is nothing special? As I recall the walk to #3 has one's back to the water view.

same issue as at Erin Hills

Why don't you two talk to C&C and ask them about Bandon Trails? After all, we are only speaking about one walk at Chambers Bay, so it is analogous.

Or send a PM to Jay Blasi on this site.

I suspect the answer would be that they found the best holes they could in the terrain. It was unfortunate that left a slightly ungainly walk, but that is what the terrain left them with. Chambers Bay at least has an excuse that it was not a natural terrain to begin with like Bandon Trails was.

[William_G]

Adam, my understanding is that Bandon has bent mixed in with fescue. CB is almost all fescue, especially the greens, which is very rare in US.

That's not really an accurate statement.  Just about every course is going to have a blend of grasses...including Bandon...including CB....including Ballyneal.

This document states as much....

http://www2.cybergolf.com/kemper/images/232/Turfgrass.pdf

So, about 6% Colonial Bent in the CB mix.

Conversely, I pulled this from a thread about Old Mac.  Tom Jefferson writes:

"The current seed mixture for Old Macdonald (and all the other turf areas here) is as follows: Bridgeport II Chewings fescue, 35%; Barswing Chewings fescue, 25%;  Barcrown Creeping Red fescue, 20%; (and seed coating 20%).  That mixture has changed slightly (I believe) since the first season's seeding, but I couldn' t say exactly how.

The seed mixtures have evolved since the initial seeding of Bandon Dunes, then Pac, Trails, and now Old Mac, chiefly by the reduction in % by weight of the colonial bent component, culminating in the absence of bent in the current mix.

If I sound like I know what I am talking about, it is only because Eric Johnson and I just went out and got a current seed tag from the seed room!  Of course Eric (or Ken Nice) COULD have chimed in and helped you out of your little predicament!  It was left to me to be the messenger here!"

Thanks for the link and the info.

[Lynn_Shackelford]

My goodness there are a lot of experts on this site concerning golf management.

Don M.  You are right about how cities should run a golf course, but you are talking about leases.  Management companies as a rule probably take out too much from leases without putting back as they should or as the citizens think they should.  Don, you shouldn't use Torrey Pines as an example of a good operation by a city.  Most golfers in San Diego will tell you horrific stories about waste and neglect.  We should watch what San Antonio is doing and how it works.  It could be the model to which you are subscribing.

Chambers Bay is a management agreement.  Kemper Sports is paid a fee to management the facility which means they have to provide employees, benefits, insurance, accounting and expertise in all areas.  They are reimbursed for these costs plus their fee.  At Chambers Bay, the NOI is positive.  If public employee unions and their benefits were involved the cash flow may not be positive.  It is only after you apply the debt there is a negative cash flow.  The decision to build Chambers Bay was made by the County and most of the negatives in costs should probably not be attributed to the management of the course.  Maybe some of that blame could go to the designer, but I am not expert on that.  Most cities are moving toward a preference for management deals instead of leases and with today's golf economy that suits management companies just fine.

After the 2015 Open, this discussion needs to be held again.  Pierce County should receive millions in increased tax revenues and play will probably increase with the exposure from TV.

Garland, comparing Rustic Canyon and Chambers Bay is apples and oranges.  One was built to shine, the other to provide daily play for daily fee players.  Perhaps your budget can allow you to play twice weekly at Chambers Bay, but most people cannot, but could at Rustic Canyon.  They both have their purpose.  As my son was involved, I don't want to get into a debate, but I think the strategy is at Rustic Canyon is terrific, I think that Chambers Bay is pretty and has great views, but the strategy of driving to one side of the fairway because of the hole placement or missing short or long is frequently prevalent at Rustic.  I have played Chambers only once and cannot fairly judge strategy.
Some on this site think Chambers is a bit overrated, good par 4's but the par 3's and par 5's aren't all that great except for the views.  I would need to play it a couple of more times before commenting on that.

[Adam Clayman]

Adam, my understanding is that Bandon has bent mixed in with fescue. CB is almost all fescue, especially the greens, which is very rare in US. And the same walk for #3 serves as the walk between #14 and #15, and you get to face the water at that time.

Richard, I was told the same disinformation from the shuttle driver at CB. He was wrong! Not until I spoke with Ken Nice was the truth revealed. As I recall, they no longer blend the fescues at Bandon, after the first course was built. They may not have blended the first course, but I'm qualifying it, due to faulty memory.

[Don_Mahaffey]

Don M.  You are right about how cities should run a golf course, but you are talking about leases.  Management companies as a rule probably take out too much from leases without putting back as they should or as the citizens think they should.  Don, you shouldn't use Torrey Pines as an example of a good operation by a city.  Most golfers in San Diego will tell you horrific stories about waste and neglect.  We should watch what San Antonio is doing and how it works.  It could be the model to which you are subscribing.

 

Lynn,
Actually I never commented on how Torrey was managed good or bad. My comment was in response to a post that stated CB got the US Open because of a management company and I was using the opens at Bethpage and Torrey as examples of publicly owned courses that have hosted the Open and are not managed by a private company.
I will be watching San Antonio to see how it works.
I think leases are better for the cities because at least the lease holder has an interest in net profits/loss. I guarantee you the management company ranks would thin if they were a little more on the hook for what they manage.

[SB]

Don M.  You are right about how cities should run a golf course, but you are talking about leases.  Management companies as a rule probably take out too much from leases without putting back as they should or as the citizens think they should.  Don, you shouldn't use Torrey Pines as an example of a good operation by a city.  Most golfers in San Diego will tell you horrific stories about waste and neglect.  We should watch what San Antonio is doing and how it works.  It could be the model to which you are subscribing.

 

Lynn,
Actually I never commented on how Torrey was managed good or bad. My comment was in response to a post that stated CB got the US Open because of a management company and I was using the opens at Bethpage and Torrey as examples of publicly owned courses that have hosted the Open and are not managed by a private company.
I will be watching San Antonio to see how it works.
I think leases are better for the cities because at least the lease holder has an interest in net profits/loss. I guarantee you the management company ranks would thin if they were a little more on the hook for what they manage.

Don,

Lynn and I have spent more time than you can imagine discussing the benefits of municipal golf leases.  Unfortunately right now, there isn't a golf pro or a management company who would take the risk and sign a lease right now.  Most of the existing ones are losing money, and 2010 didn't show anyone that the industry was at the bottom.  So that leaves management contracts, which is halfway there.  You get the experience of the guys in the company but without the financial commitment.  That said, most management contracts are year to year, so if the owner isn't getting 100% of what he deserves, then they can always be replaced.

A management company isn't far off from the structure you outlined, because if you take a super and a pro, then you have a management company.  The only difference is your guys show up once a quarter for free and a management company gets paid to think about it every day.

Kelly,

Good find.  Hurdzan's comment was only slightly off.   

[Don_Mahaffey]

The super and the pro in my example are on the BOD and they make sure quality people are ON SITE thinking about it everyday.
We can go round and round, so I'll drop it other than to say I do believe there is a better way that serves the municipalities better  (citizens) and could still be structured so a for profit entity could be involved. Sort of a hybrid lease/management deal if you would. I just think if a group is telling you what to do, how to do it, what to buy, and how much to pay for it, they should be a little more involved in the outcomes of their decisions then just drawing a check every month.

[Matthew Essig]

http://www.thenewstribune.com/2012/02/17/2030945/chambers-bay-lost-about-850000.html?storylink=rss

Oh boy, here we go again.  

Will the hotel, bigger clubhouse, and other stuff for the us open be built?

Anybody still think it is possible for it to lose the us open?

[Kris Shreiner]

The numbers being mentioned in this article are astounding! $21 million to build it. $2.5 million annually to maintain the course.  A staggering $15k and change profit from the highly successful U.S. Amateur ! Crushing debt service figures every year. Even if it was a "moonscape" prior...this never should have been built given the disastrous financials involved. If Chambers Bay was killing it...and they're not, it would take gobs more revenue to satisfy the debt load.

That sewer department subsidy is course welfare. You really have to hand it to those folks though, their creativity and justification for funding a quasi-attractive money pit is remarkable.

I WILL give them credit for at least establishing a caddie program there, which is a rare effort in the municipal arena, though the trending in golf passes and the like will certainly impact caddie rounds there. The key to improving the bottom line for Chambers Bay is blending increased destination play with local rounds...that is a tricky proposition few have mastered. It will ALWAYS lose money, the question is just how much?

To me this is just another example of the game losing its way. How can you reward a blunder like this with our most highly-respected championships? What message does this send to the non-golfing folks in our society?


Cheers,
Kris

[Jim Colton]

I'd like to see the pro forma that has them losing 850k in 2011, projected losing 840k in 2012, then suddenly breakeven in 2014.

[John Kavanaugh]

Big box government projects worth can not be measured on such simple terms. The only thing worse than seeing the dollar payback for the St. Louis Arch would be seeing the cityscape without it.

[Patrick_Mucci]

http://www.thenewstribune.com/2011/01/02/1485733/chambers-bay-still-in-red-figures.html

The unreported rumor is that Richard Choi has pledged to cover the operating losses until 2015.

Is this an indication that the USGA picked the wrong site ?

[Michael George]

I am always skeptical of municipal profit/loss statements.  I would love to dig down these numbers and see what they are expensing through the golf course.  It is often easier for politicians to find patronage in these types of projects than adding people to unionized departments.  

[Terry Lavin]

Build it all. They'll make $30 million plus, won't they?  I'm sure the USGA will subsidize them until they get on their feet, won't it?

[Tim Nugent]

I'd like to see the pro forma that has them losing 850k in 2011, projected losing 840k in 2012, then suddenly breakeven in 2014.

I would like to see the ProForma for them not developing it as a golf course but rather, as a passive park.  This would bring some comparitive sanity to an one-sided argument.

I would also like to see how they mainage to spend $2,500,000 on annual maintenance.  Does anyone else see this as a high number?

[Ken Fry]

A few thoughts after reading the article:

- If a private investor/owner took the chance to build this facility and ran out of money, the project would be dead.  A government entity does it, they take money from one place to sustain the other.  Does this logic work for anyone?  This is yet another example why government should not be involved in golf.

- Poor economic policy and business decisions give golf another unneeded black eye.

- After the "windfall" year of the US Open, is this really a self sustaining project?  $2.5M in course maintenance each year??  What about the operating expenses for all other departments??  Would this be a good example of what the Olympic Committee is trying NOT to have happen in Rio??

Ken

[Greg Chambers]

I was just about to comment on the maintenance expense, Tim.  Yes, $2.5 million is extremely high.  I can't even imagine how they get to that number, unless all of the work being done to the course is falling under maintenance expenses.

[Don_Mahaffey]

I wouldn't call how CB operates a financial struggle.

Anyone with half a brain and some honesty knew there was no way it would ever make money without some creative accounting. 20+ million to build and 2.5M to maintain isn't going to get you in the black, ever.  You simply do not spend that kind of money for development and expect a return on greens fees. Wasn't going to happen. The course will stay open and the tax payers in the area will continue to pay the bills.

Struggling financially is a family that will lose its house when they can't make their mortgage payment.
Struggling financially is when a small business can't make payroll.

Government entities like CB don't struggle, they issues press releases proclaiming some sort of successes that aren't backed up by a shred of real evidence.

Chambers Bay Golf Course was never about the course itself making money. I think John's tie in to the St Louis arch is as on the money.