Chambers Bay in Trouble?

[Richard Choi]

Just read a local golf magazine article that Chambers Bay is $700k in the red for this year.

I understand that with the economy being what it is, but I am having a hard time understanding how they could lose that much money. Does that include all the work they have done with building new tees and rebuilding the green on #4?

Anybody with some insight on this subject?

[Tom_Doak]

How much was it they borrowed in bond financing?  Twenty or thirty million dollars?

It's probably debt payments that are killing them, not the operating costs.  But if your debt payments are higher than your maintenance budget, it's hard to fix the problem by cutting back.

[Jim Nugent]

The cost to build figure I saw was $20 million.  Also that in mid-June, 3000 fewer golfers had played there this year than they budgeted.  Plus the average cost per round was $15 or $20 less than they expected, and sales of other items also lagged. 

Back then the deficit was in the $400k range.  Now it's over $700k.  So looks like they did not get a huge boost this summer. 

[Garland Bayley]

We might have to give Cos a sewage payment "scholarship".
 

[Anthony Gray]

  The course had plenty of play the two days I was there. The problem must be debt insted of lack of business.

  Anthony

[Joel_Stewart]

I played a local public golf course on both weekend days last month.  It was packed.   In talking with the GM, its not the weekends, but the weekdays that are killing them.

I haven't been to Chambers Bay but with no carts and high green fees (over $100) you have eliminated a large market share, seniors, people on a fixed budget and women.   I'll assume that the winter months are pretty close to be in the Northeast, very little play.  So if they are saddled with $10 or $20 million in debt, the economics are just not viable.

[Steve Lang]

  Risk reward.. with tax payer monies..

Is this the future of american public golf.. economic exclusivity.. who are the sustainable development folks?

http://www.topix.com/city/university-place-wa/2009/08/chambers-bay-golf-course-deficit-expected-to-last-but-pierce-county-official-isnt-worried

Chambers Bay golf course deficit expected to last, but Pierce County official isn’t worried
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DAVID WICKERT; The News Tribune
Published: 08/19/09  12:05 am   |   Updated: 08/19/09   6:26 am
 Comments (5)
 Recommend (0)This year’s budget trouble at Pierce County’s Chambers Bay Golf Course may spill over into next year as well.

Deputy county executive Kevin Phelps told the County Council on Tuesday that “the likelihood is strong” that Chambers Bay will finish this year with a budget deficit. And he also expects the course to run a deficit next year as well.

But Phelps said the county will come out ahead when revenue from the 2015 U.S. Open championship is taken into account. He told the council that payments of up to $5.5 million from the United States Golf Association in coming years will more than cover those deficits and pay for course improvements.

“Yes, we think there will be a deficit,” Phelps told the council. “We’re doing everything we can to minimize it.”

Chambers Bay finished the first half of the year with a deficit of more than $700,000. While a strong August and September might help, it’s likely the course will finish this year in the red.

County officials say the recession limited the number willing to pay up to $169 a round at the University Place course.

While the course is making enough to cover its operations, it’s doubtful it will generate enough to cover an $800,000 debt payment due in December.

Phelps has said the course may borrow from the county general fund or sewer fund to cover deficits. He told the council that guaranteed payments from the USGA – payments due under the county’s contract to host the U.S. Open – would be used to repay any interfund loan.

The County Council will have the final say over how the county covers the Chambers Bay deficit. Previously the council pledged to sell land near Chambers Bay to help repay the $21 million golf course debt, if necessary.

In other Chambers Bay news:

 • County Executive Pat McCarthy told the council that USGA officials who visited Chambers Bay last week remain committed to staging the U.S. Open here. In fact, McCarthy said they indicated it’s possible the course will be included in a regular rotation for the championship, perhaps every 10 years.

 • The county is having a hard time finding a private developer to build a permanent clubhouse, lodging and restaurant facilities. But McCarthy said the USGA isn’t worried about that and is more focused on improving the course.

 • Pierce County is close to announcing two major sponsors for next year’s U.S. Amateur championship. McCarthy said those two sponsorships would generate $350,000. She said the county hopes to raise $1.2 million from sponsors.

County officials have said they will need to raise $600,000 to cover the cost of hosting the U.S. Amateur.

David Wickert: 253-274-7341

david.wickert@thenewstribune.com

blogs.thenewstribune.com/politics

[Tom Yost]

Rather than start a new thread, I'll just glom onto Rich's.

Someone posted a review and some photos on another site from a visit on Labor Day.  I noticed that it looks the #4 green renovation has been grassed.

[Tiger_Bernhardt]

The debt service schedule is the rub. They are covering costs with ease. The debt service obviously was not set up for normal course maturity and growth. And of course did not anticipate the lock down in consumer spending of the last 12 months. To  say the course is in trouble is highly irresponsible and flat not correct though.

[Jim Nugent]

The debt service schedule is the rub. They are covering costs with ease. The debt service obviously was not set up for normal course maturity and growth. And of course did not anticipate the lock down in consumer spending of the last 12 months. To  say the course is in trouble is highly irresponsible and flat not correct though.

At this pace, they will lose something like a million dollars in 2009.  If they are not in trouble, sounds like it's only because of the payments they expect from the Open and Amateur. 

Suppose the economy turns down even more over the next few years.  CB will get even less play.  The deficit could go even higher.   

[Tiger_Bernhardt]

Jim Plzzz you know enough about governemnt and finance to know that simply throwing a number in the air means little.  We have an all knowing friend and local from Tacoma who rightly or wrongly knows that the Am and Open as well as the positive buzz from CB has done for Tacoma. It has improved the quality of life in that area too. The park/green space component of the course is not figured into the math either. See what it costs a city to maintain a thousand acre park.

[cary lichtenstein]

Is this a model for the US Government under Obama?

I learnt in my 30 years in business that debt "kills"

[Joe Hancock]

Cary,

It wouldn't be a surprise if Chambers Bay never penciled out. But I'm pretty sure Obama had nothing to do with it.

OT: The government(take your pick on size/ location) isn't fiscally responsible because the vast majority of voters don't want them to be nor demand them to be.

Back to your regularly scheduled Chambers Bay programming.....

[Patrick_Mucci]

How much was it they borrowed in bond financing?  Twenty or thirty million dollars?

It's probably debt payments that are killing them, not the operating costs.  But if your debt payments are higher than your maintenance budget, it's hard to fix the problem by cutting back.

Tom Doak,

Who owns Chambers Bay ?

Who operates Champbers Bay ?

Is a default or Chapter 11 an option ?

[Richard Choi]

Is this a model for the US Government under Obama?

I learnt in my 30 years in business that debt "kills"

Cary, are you insane or just ignorant? The planning for this course started even before Obama became a Senator. Drop the remote and step away from the Fox News.

[Richard Choi]

Tom Doak,

Who owns Chambers Bay ?

Who operates Champbers Bay ?

Is a default or Chapter 11 an option ?

Patrick, CB is a true muni, owned by the Pierce County. It won't default because the county will cover the debt until the US Open payment is made. I was really wondering whether or not this is due to an inherently bad operational model or something else.

[Michael Dugger]

Is this a model for the US Government under Obama?

I learnt in my 30 years in business that debt "kills"

Cary,

I'm sure that gazzlion dollar Iraq war had nothing to do with our debt problem... which I do believe went down under Bush.

Nobody around here cares for snipes of your sort, it's played out....and a complete fabrication.

As someone who "owned businesses" you sure don't seem to be very smart sometimes.

I'm quite positive Chambers Bay is not the only course built in the last 10 yrs that dug themselves a huge hole.

[Craig Sweet]

Cary probably has forgotten that the Ronald Reagan "stimulus plan" back in 1981 consisted of spending $600 billion dollars the country didn't have......

[PThomas]

Cary probably has forgotten that the Ronald Reagan "stimulus plan" back in 1981 consisted of spending $600 billion dollars the country didn't have......

and during the campaign against Carter Reagan complained about the $60billion deficits Carter was running

[Ulrich Mayring]

Somehow I don't think the USGA will dump millions of dollars into Chambers Bay so they can repay their debt. I guess they'll mandate it all goes into course and infrastructure improvement.

Ulrich

[Steve Lang]

 

Ulrich... $ probably go into a general fund, no way for USGA to dictate where they go

speaking of $..  this isn't my father's or my muni golf economics.. sure must be a lot of disposable income in Tacoma..

from:
http://www.chambersbaygolf.com/layout10.asp?id=173&page=3352

Rates shown are NOT inclusive of Washington State sales tax.
 
  Reservations for groups of 16 more may qualify for a group rate, and are subject to group outing terms and conditions. 
Contact Chambers Bay at (253) 460-4653 for group outing information. 
 
              August-September           
   October   
 
Guests   Mon-Thur $149
Fri-Sun, Holidays $169
   Mon-Thur $119
Fri-Sun, Holidays $139
 
Pierce Co. Residents   Mon-Thur $89
Fri-Sun, Holidays $109
   Mon-Thur $69
Fri-Sun, Holidays $89
 
Replay*   Mon-Thur $69
Fri-Sun, Holidays $79
   Mon-Thur $49
Fri-Sun, Holidays $69
 
Sunset Rate
 
Guests   Mon-Thur $89
Fri-Sun, Holidays $109
   Mon-Thur $69
Fri-Sun, Holidays $89
 
Pierce Co. Residents   Mon-Thur $69
Fri-Sun, Holidays $89
   Mon-Thur $49
Fri-Sun, Holidays $69
 
August Sunset Rate begins at 3:00 p.m. Monday-Sunday.
September Sunset Rate begins at 2:00 p.m. Monday-Sunday.
October Sunset Rate begins at 1:00 p.m. Monday-Sunday.

 

Caddie Fees**
 
Single Bag $45
 
Double Bag $90
 
Forecaddie $50
 

[cary lichtenstein]

Is this a model for the US Government under Obama?

I learnt in my 30 years in business that debt "kills"

Cary,

I'm sure that gazzlion dollar Iraq war had nothing to do with our debt problem... which I do believe went down under Bush.

Nobody around here cares for snipes of your sort, it's played out....and a complete fabrication.

As someone who "owned businesses" you sure don't seem to be very smart sometimes.

I'm quite positive Chambers Bay is not the only course built in the last 10 yrs that dug themselves a huge hole.

My point is about unrealistic planning, taking on massive unrealistic debt compared to the brillance of the Bandon minialist approach. That is why I compared it to the Obama model, because someone gets stuck in the end with the bill. Each foreclosure, resiental, commercial or other wines up with the taxpayer footing the bill.

[Richard Choi]

Cary, comparing a debt model that a local municipality that took on year before the president even began campaigning and trying to tie that to the current administration is not only twisted, it is intellectually dishonest, petty, and just plain stupid.

If you have something to add to the discussion of a large project muni dealing with debt problems, please enlighten us.

If you are just looking for yet another thread to bash the administration, go do it somewhere else because I think I speak for most people here that is not welcomed.

[Steve Lang]

  calm down richard, it looks like you're personally defending BHO,, he can take care of himself..

and please don't try to speak for 1500 gca.com folks

isn't the issue whether losses were foreseen as part of the business plan for CB?  and now how will they mitigate the losses?   i assume some tac area folks who don;t value golf might see this as a bit of foolishness, not sustainable development and not something the general public can really enjoy

[Richard Choi]

calm down richard, it looks like you're personally defending BHO,, he can take care of himself..

I agree he can take care of himself and he couldn't care less what people like Cary posts on some random website.

However, I don't appreciate the thread being hijacked because a member has a beef with the administration. If it had even some tangential relations or at least some humor, I wouldn't mind, but this is neither.

We get it, you don't like Obama. You think he is the socialist devil spawn who is sent by lucifer to drive this country to the ground. Whoopee for you.

Now, can we talk about the matter at hand?