What is the Role of Municipal Golf????

[Rob_Waldron]

The GCA, excuse me Jersey Golfer "Get Together" at Essex County CC provided some interesting insight into the role of Municipal golf courses.

Shortly after an award presentation to a representative from Somerset County, NJ. a group of golf course owners and operators offered their views about the status of the golf course industry.

Chris Schiavone the President of RDC Golf noted the concerns of his company and other golf course owners who continue to compete with a growing number of municipal courses. Chris is very active with the New Jersey Golf Course Owners Assn. as well as the National Golf Course Owners Assn. The subject of Municipalities being in the golf business has been a "Hot Button" for quite some time.

Municipalities who historically have provided recreational amenities to their communities have determined that unlike ballfields, tot lots and basketball courts golf courses can provide a revenue stream. Since it is the municipality itself that oversees the approval process of all golf courses a rather distinct conflict of interest is readily apparent.
 
Municipalities finance their courses through tax dollars and bond issues. These funding sources are not available to the private golf course developer. Municipalities also have a vested interest in having their project approved as well as a delaying the approval of a competing project.

Historically municipal courses were purely recreational amenities. The high development costs for golf courses
was prohibitive for all but the wealthy who built private country clubs and municipalities. Municipal courses were for the most part poorly designed and not maintained very well. At that time the role of Municipal courses was to introduce beginning golfers to the game and provide affordable recreation.

With the introduction of the "Country Club for a Day" concept in the 1990's Municipalities saw an opportunity to turn their Parks and Recreation Departments into a source of revenue as opposed to mere cost centers.

Unfortunately the most important roles of Municipal golf courses, that of introducing beginning golfers to the game and affordable rounds is rapidly disappearing. How do we increase the number of golfers?  It starts at the grassroots level, the municipal golf course!  
 
 

[Brent Hutto]

Unfortunately the most important roles of Municipal golf courses, that of introducing beginning golfers to the game and affordable rounds is rapidly disappearing. How do we increase the number of golfers?  It starts at the grassroots level, the municipal golf course!  

I doubt that many municipal governments are on the same page with you about the importance of their introducing new golfers to the game. They may have a conception of bringing golf opportunities to "underserved" portions of the community but it is from a point of view of service to those otherwise disadvantaged citizens rather than growing the game or producing the next generation of golfers.

I can't imagine why a local governmental entity would be interested in producing new golfers per se as opposed to offering a recreational product to a pre-existing population of golfers. It may be necessary to somehow convince them that creating new golfers is somehow in their interest or is their responsibility.

[Kyle Harris]

You pretty much touched the role of municipal golf: a revenue stream.

Personally, I don't see this as all bad. If it packs a local government's coffers with extra cash, and that cash can be reallocated elsewhere... how is this a bad thing?

As for bringing new golfers into the game. I think the municipal course fits that role more by accident then design. Municipal courses are easily accessed and typically less expensive (especially if they offer an residency rebate) than any daily fee course. They also, as you said, tend to be designed in a simpler and easier playing way, so the attraction to the beginning golfer is even higher.

That's not to say this should continue. Makefield Highlands Golf Course in Makefield, PA is a municipal track designed by Rick Jacobsen. It stretches to just over 6700 yards from the regular tees and is by no means a course for a rank beginner. Furthermore, green fees peak at around $60 on the weekend.

I think your point about the conflict in interest is a bit unfounded. Municipal courses have to deal with the same market conditions of all golf courses in an area, and furthermore, they are under the scrutiny of taxpayers, both golfers and non-golfers. While municipal tracks may enjoy simpler licensing, et al. All it takes is one public appeal to bog down construction for months and even years.

[Craig Sweet]

Brent,

Golf numbers are down even at municipal courses. When you see a 10%-20% reduction in rounds, you are talking some real moeny. Why WOULDN'T they want to attract new golfers?  The revenue stream generated from muni's often goes into the general fund and pays for programs that might otherwise have to be eliminated.

For example, where I live the local University course, a 9 holer that is no great shakes, generates $78,000 free and clear for the University. That kind of money coming into a local government can fund after school programs, another cop, a city planner, free summer swim programs, etc. etc. Would these golf course owners rather pay higher taxes for community programs, or eliminate this source of revenue?

My experience has been muni's compete fair and square with private courses. Many pay there own way and rely on little if any taxpayer support. They do not cost any less to maintain, and they generally charge a similar fee for play.

[A_Clay_Man]

While I can empathize with the course owners, I cannot do so, for their association.

Which came first, Ex-post facto, sour grapes! Take your pick.

The golf "market" is an interesting one, since most of it appears to have evolved from the "garages and trunks" of many an entrepreneuer. A large part of that evolution has been through municipalities (Jackson Pk 1897) offering the much needed recreation.

The issue is not about the golf courses, persey, it's about the perception of impropiety that governments have with their creative accounting, and their opportunity for patronage abuses.

The owners have no right to criticize their inability to compete, expost facto. They entered the market. They knew about the competition. I bet everyone of them played a muni as a kid.

They would do us all a service to make sure that abuses are either set right, or the abuses are quantified and legislated into laws, with such a penalty, that no one would take another kick-back ever again. While making sure the perception of impropiety is completely removed from all levels of government. (now that's a conflict of interest)

[mike_malone]

 Affordable golf

[Brent Hutto]

Golf numbers are down even at municipal courses. When you see a 10%-20% reduction in rounds, you are talking some real moeny. Why WOULDN'T they want to attract new golfers?  

Oh, I didn't mean to imply they don't want to attract new golfers. Just that from their point of view (as I imagine it) attracting new golfers to the game is simply one of many avenues for growing their business. Rob was saying that bringing in new golfers was of some particular value or responsibility to municipal courses. My point is that a muni is just as happy to get their tee sheet filled with one golfer as another. Surely they don't see newbies as qualitatively different than any other potential user of the course.

[A_Clay_Man]

Surely they don't see newbies as qualitatively different than any other potential user of the course.

In Germany they do. They realize how counter productive it is, to put someone out on the course, who doesn't know how to act, or golf.

Americans could take a lesson from that, but they won't.

[Buck Wolter]

Where municipalities enter the market in direct competition with existing private ventures it strikes me as a waste of taxpayers money and unfair competition. While it may create cash flow in the minds of those who think there's a social security trust fund, I doubt these are the wisest use of public monies.

[Brent Hutto]

Surely they don't see newbies as qualitatively different than any other potential user of the course.

In Germany they do. They realize how counter productive it is, to put someone out on the course, who doesn't know how to act, or golf.

Americans could take a lesson from that, but they won't.

Well I'll bet in Germany they don't host a great many carts-only, four-man scrambles with $5 mulligans and $2.50 beer, either.

[JakaB]

Buck,

You surprised me with that one...how do you feel about Forest Park....What I wouldn't give for a public facility like that a little closer to home..

[Kyle Harris]

Buck,

The numbers disagree with you on that one, at least in my township. Thanks to Five Ponds, Warminster enjoys the most well managed and well stocked Library in the county, an excellent park system where 20% of the town is parkland, an affordable place to play golf, and numerous Recreation programs for adults and children.

And what do I pay for these amenities? Nothing...

[Craig Sweet]

I think there is a myth here that municipal courses are supported by tax dollars. My experience has been they not only pay their way, they generate excess funds.

[Craig Sweet]

Newbies? Boy, for 4 weeks this summer I saw a steady stream of 6-12 year olds following behind the pro heading out for golf lessons like gaggles of geese. I'm sure the muni wasn't doing this as some feel good, community charity event. They were developing future golfers and revenue producers. I think muni's are very serious about generating new golfers and maintaining them.

[Buck Wolter]

John-
I meant new developments not existing courses. I'm a huge fan of municipal golf and would probably be a bowler without it. Most of these courses were built long ago and before there was private money invested in golf for the public. In that case caveat investor to a new development,  but to have a competitor come in that doesn't pay taxes, can condemn land to get there hands on it, issue tax free bonds for the investment and then raise property taxes on people who think this stuff is free strikes me as Un-American. I sure don't want a taxpayer subsidized company competing against me, the product will probably me mediocre but they can lose alot more money than I can.

Let's protect the municipal courses around the country from Hale Irwin Designs and improve gems like Waveland in Des Moines. But City Hall should stay out of Golf Course development.

Buck

[George Pazin]

 

We "discussed" this a few months ago in pretty much detail.

 

[Buck Wolter]

A repeated topic on GCA? Are we running out of things to talk about?

[Kyle Harris]

Buck,

What if City Hall uses golf course development as a way of reclaiming old industrial sites or other unusable land? How about to preserve open space and keep suburban sprawl at bay?

[Kelly Blake Moran]

I would hope the majority of revenue generated by a municipal course would be plowed back into the course in the form of establishing accounts to help fund the upgrading of maintenance equipment, building maintenance, salary increases to help hire the best people, etc...  Let the book people find ways to fund the library and so on.  

Adam's concern for kickbacks is laudable.  The biggest kickback on a muni courses comes in the form of prevailing wages, particularly during construction.

The other monetary issue that is troubling is the low bidder situation.  While you can qualify bidders I am somewhat convinced that the contractors that bid to win do so with intentions to exploit any opportunity to claim a change order whether real or not.  Furthermore, even though you can qualify bidders, you tyically lose a lot of excellent contractors who do not want to participate in a prevailing wage job.

Finally, I do not beleive municipalities get any preferential treatment from DEP, DEC, Soil Conservation, US Corp of Engineers.  At least not in my experience.  You go under the same scrutiny as any other developer.  The one advantage in terms of permitting that the Township has is with the Township engineer, who can be a source of extreme irritation.  Township officials can give the word to their engineer to back off.

I think there are excellent formulas for municipal and private partnerships in developing golf courses. This should probably be the arrangement that is most employed.  I'll guarentee that the guys at the GCA conference that were dismissive of the role of municipalities in developing golf course would be very open to a public/private venture.  I guarentee it.

[Kyle Harris]

KBM,

In Warminster, there is a significant chunk of revenue and profit devoted to the course, and to capital and non-capital goods for the facility. The equipment isn't new, but it is on the same level as any daily fee facility in the area (Island Green, Bucks County Country Club, et al.)

The superintendent works minor miracles considering his budget and the ground the course is in (Five Ponds, can quickly become Five Lakes, in any storm). Granted, we make the sacrifice in conditioning at times, but the course still merits replay.

As for private/public cooperation, hasn't there been some signigicant success with such a venture in Philadelphia?

[Rob_Waldron]

Several years ago John Shields, the President of the Maryland Golf Course Owners Association attended a public hearing in Anne Arundel County regarding the approval of a new 36 hole facility.

When it was his turn to speak John asked the County representatives why they felt it was important for the County to assist in the financing of a golf course considering less than 10% of the residents were golfers. John also noted that 100% of the County residents ate food yet the County refused to consider subsidizing a food bank. Just food for thought!  

[Kyle Harris]

Rob,

That's a syllogism. What percentage of the county population would use the food bank?

[Rob_Waldron]

Kyle

I think the point is that The National Golf Course Owners Association feels that Municipalities have no place in private enterprise. Mr. Shields was trying to determine why the County would decide to enter into a business that would serve such a small percentage of its residents. By the way it is my understanding that the County Executives at the meeting refused to respond to him.

[Kyle Harris]

Haha, just checking...  

Either way, you do get a bunch of out of county players too, I would imagine.

Sorry if I came off as stand offish - had an annoying weekend that involved losing my tread on the NJ Turnpike at Exit 11 and sitting in Perth Amboy for two hours waiting for a tow that cost me $300.

And to boot, there's snow on the ground again.

[Doug Siebert]

This argument that private developers can't compete with municipalities that can finance through bonds, don't pay taxes, etc. is silly.  That's like a developer saying that some guy who wants to turn his 160 acres of family farm handed down through four generations into a course is unfair competition because he didn't have to pay for the land he already owned!  What's next, Borders arguing against city funding of public libraries?  I'm sure their sales would increase somewhat if people couldn't check out books for free.

Sometimes developers can take advantage of municipalities, too.  Around here a developer built a nine hole course about 15 years ago and developed all around it.  Once it was pretty much all developed, he went "bankrupt" (in quotes because you all know how developers will sometimes go into bankruptcy protection after transferring millions in assets to others to protect them)  He was losing $200K/year on the course, so he gave it the city and got a huge tax writeoff in exchange.  As part of this someone else rolled along and gave the city a great deal on some other land they owned adjacent to this to build another nine.  And then they sold off all the land around that for more housing, netting them more than enough extra from those lots than they lost selling the land to the city cheap (and probably found a way to get a writeoff there based on the market value of that land)

There are probably 10 situations like this where private developers use the city like this for their own personal profit for every one where the city goes out and deliberately screws private investors.  I'm not saying this is a bad thing, because the city and its taxpayers IMHO got a good deal, and hopefully the 18 hole version of the course will at least break even -- though if it loses money I wouldn't view it any different than a public park that costs the city money to maintain but brings in no revenue and thus "loses" money.

The guys who complain are probably just pissed they couldn't work a deal to advantage of the municipal course development like this!