In depth look at course closures

[Ira Fishman]

https://www.governing.com/topics/finance/gov-golf-courses.html


I played Red Gate a lot when I was younger.  Article is from magazine that covers state and local government.


Ira

[Steve_ Shaffer]

Interesting to note that the magazine will discontinue operations 





GOVERNING TO CLOSE
After 32 years, the magazine of record for state and local government will discontinue operations.

[Carl Nichols]

Unless I missed it, what's odd to me is there's no discussion in the article regarding greens fees and what, if any, efforts they made to increase revenue.   

[Wayne_Kozun]

There is also no discussion about how much revenue comes from alternate uses for the land.  Should a muni golf course be expected to turn a profit?  How much of a profit is earned by a public park or soccer field or baseball field?  Maybe they charge some rent to soccer or baseball leagues but if it is just a public access park the revenue is going to be zero and there will be expenses for mowing the lawn, emptying the garbage, building and maintaining playground facilities, etc.


Here in Canada many of the hockey arenas are run by municipalities and these typically run at a loss as they are part of the local recreation budget for the municipality.  Shouldn't a golf course be viewed in the same vein?

[Ira Fishman]

Interesting to note that the magazine will discontinue operations 





GOVERNING TO CLOSE
After 32 years, the magazine of record for state and local government will discontinue operations.

That actually is a shame.  I am a Public Policy guy, and Governing is the gold standard for state and local coverage. 


Ira

[Bernie Bell]

I never played Red Gate.  Red Gate's competition was the county revenue authority that operates 9 municipal courses as Montgomery County Golf (MCG).  In 2017, the last year for which I find usage data, MCG had 392,562 rounds over the 9 courses, and rounds were up 6% versus down 2.7% nationally and locally.  In 2018, MCG had revenue of $15.3m and operating expense of $13.1m.  Total net income just in the black.  MCG is run to be self-supporting, and as far as I am aware it has been so in the decades that I've lived here.  Not sure why Red Gate couldn't compete.  I'm sure MCG is advantaged over Red Gate by economies of scale across the 9 courses, some of which I know have individually lost money in the past.  And advantaged over other counties in MD and USA by relative wealth.  Regardless, I think the future of municipal golf in USA has to be on a self-supporting model, not as (yet another) taxpayer-subsidized "right."  There are simply too many stark and more compelling public needs and too few governmental resources. 

[Steve_ Shaffer]

As like many of the golf course " obituaries" I have posted here over the years- munis, public or private- the key ingredients for closure are location, financial,  changing demographics and land valuations or usage. In the munis arena, a lot depends on usage, financial conditions and local desire to maintain open space. Some state,city or county governments act differently than others depending on the own circumstances. 


I would think that in heavily congested Montgomery County MD keeping open space should be a high priority given that, as a whole, financial conditions appear to be good for the remaining courses. 

[Bernie Bell]

The biggest challenge to MCG's model is the county's decision to raise the minimum wage to $15 in $1 steps.  Each $1 step up in wage increases MCG operating costs by ~$300,000, or >2%.  To offset that will require additional ~$1 per year per round of golf played, if rounds remain constant.  Or savings elsewhere.