Should Govt get out of the golf course ownership business ?

[Dave McCollum]

Lou—
The ignorance or at least poor preparation is truly astounding.  Perhaps we were a bit lucky by framing the argument in a way that sort of painted the appraiser into a corner:  will you accept a revenue approach ?  Yes.  They maybe just wanted to get rid of me, a persistent pain-in-the-ass.  Who knows?

For those interested in this topic, the comments Archie, Ken, Jim, and others who are/were competing with muni’s match my own.  At the time we did the tax appeal I described, I had a partner who probably was something like the second largest private land owner in America (behind Ted Turner).  All of the suits in his tax department told me that I was wasting my time appealing for the same reasons you described.  They were right as far as appealing on an individual basis.  Even some “big guys” run into the same thing and, I assume based on experience, know the cost/benefit of continuing the appeal process.  As long as I did the work myself and didn’t run up massive legal fees they didn’t mind my trying.  The key was getting them to look at us as a class of property owners, not individual businesses. 

Luckily, we have some resources on property that allow us to contribute to the overall operation (subsidize ourselves).  We have an artesian geothermal well that generates as much energy as we consume, use the water to raise 250,000 lbs of fish annually, and to heat our facilities.  We are taxed and regulated on these resources as well, but at agricultural rates. 

Don’t get me started on regulatory agencies.

[Matt_Ward]

Archie:

Under your reasoning --


* there is no RUTGERS UNIVERSITY -- just go to Princeton University !

* there are no public libraries -- just head to the private stores which can charge what they wish.

* there are no public parks - we should only solicit those who provide such amenities on the private side of the aisle.

You stated a desire for term limits. Fine -- agree with you on that.

What you fail to understand or even appreciate is that NJ already has the 8th most expensive places to play golf. The private providers never really gave a hoot about the masses -- they just wanted to cherry-pick off the deepest of pockets. For them to cry about the blatant unfairness now -- is really amazing. Where were all the moans and groans when the cash register was ringing off the hook?

Archie, I'm not wise enough to comment on the local politics of Texas and Idaho. Maybe you are. I do know that issues of all types have arisen and do occur in NJ. I also DON'T make blanket guilty as charged comments as you have. If you have proof then present it. The generalized let's throw anything against the wall approach you take is driven because of one specific example in your neck of the woods.

Archie, I fully understand the heavy had of gov't when it reaches into the pocket of people in NJ. I try to make sure -- as a locally elected council person -- that such actions are not carried out beyond the necessary functional level. But, I also don't paint with the widest of brushes -- each situation needs to be weighed / examined accordingly.

I have enjoyed this conversation between the two of us -- you see to slay all that government does. I take a more nuanced position. So be it.

[Lou_Duran]

Archie,

I think that Matt was suggesting that Texas might be more corrupt than NJ, which I am sure it is not.

The relationship between high tax/high regulation regimes and the private sector can be confusing and counterintuitive.  As a long time SoCal industrial developer explained to me while playing at his outstanding private club, yes, he pays exorbitant costs for studies, plans, permits, etc. generated by consultants on the locality's approved vendor list, but he gets his projects approved.  So long as his competition has to incur these costs as well, they can't deliver a cheaper product.  And since the requirements are so formidable, the competition in his niche is relatively thin.

Without knowing my background, he stated authoritatively that it would be unlikely that I could be successful entering his market, but that he would have relatively little problem going to any major city in Texas and competing effectively with established local developers.  It really comes down to the barriers to entry erected by govt. which may result in a more consistent product, but at much higher costs.  At least back in the mid-2000s, he was happy as a clam traveling all over the country playing golf (he was a GD rater), knowing that his business was well protected at home.

I can see how the golf industry, particularly architects and superintendents, would be for getting all the help from government they can.  Short term, govt will have great opportunities, particularly if lenders get large numbers of courses back and the private sector can't recapitalize them.   And after getting whacked with a large plank on the side of the head, of the remaining prudent lenders, which are going to provide debt capital to a declining industry facing terrible demographis and a secular anti-business environment?  

[Matt_Ward]

Lou:

I never suggested such a thing.

I have no knowledge of the TX political scene. I do have some knowledge of my own area.

Just to set the record straight.

With all due respect to the rest of your comments -- the taxpayer-owned courses really have not caused the massive problems that so many private providers wish to convey. Its e-z to find the scape goat outside one's own business.

[Matt_Ward]

Kelly:

Interesting letter but frankly it's quite dumb -- ditto the ruling by the Ohio tax commissioner.

The land owned by the city is tax-exempt. Should they lease it to outside group the outside provider is paying the jurisdiction for the right to manage the property. The $$ paid to the jurisdiction should provide the appropriate level of "compensation" back to the aforementioned city -- in this case Cincinnati.

[archie_struthers]

 

Matt there you go again , assuming that I don't understand that NJ golf is expensiive . Yeah and hambugers in NYC cost more than those sold in Millville, what exactly is your point.

Again you state that I said that I seek to slay all government does, no I didn't.  You misquoted me ...again. If we talked you mightbe surprised ....


Would I love a state or country where government officials where more ethical....absolutely ....are there good politicians ...yes ...but alas they seem to be in the minority...the system generally corrupts even the good people.......   

Back to the question  Should NJ governments spend more money to build golf courses...absolutely not!

[Jim_Kennedy]

The fellow (Macke) from Cinncinnati who's teed-off tried to get one of his courses rezoned for housing back in '07, specifically the Hillview GC in Green Twp., but it seems like it's still in business so perhaps that plan was denied and added some fuel to his mission.

The seven city-owned courses generated 1.2 million in positive revenues for the city for the past three years (combined). Billy Casper Golf has a sweet deal, keeping 83% of the gross on F&B and 93% of the gross on Proshop sales. BCG has also been able to get waivers from the city every year so it can circumvent the living wage clause, used when the city contracts w/outside vendors. BCG's contract is up for renewal in 2011.

The real kicker:  the cities courses used to do ca. 400k+ rounds in the mid '90s, but 17 privately owned golf courses were built in Cinncinnati since 1999. The city courses did 288k rounds in '09.

Who's hurting whom?

[archie_struthers]

 

Hey Jim just a thought but if the 17 city owned courses paid property taxes on the land it would surely generate more revenue than
that ...at least here in NJ ....then again our taxes are surely higher ...

Also are city employees running any aspect of the Golf Division...if so is their compensation and benefit , pension cost factored into your numbers     

ps    who figured the p/l for the city 

[Jim_Kennedy]

Archie,
No one as yet (or as far as I've read) exactly knows what the taxes would bring, but a residential property with the same value as the cities Woodland course (just over $1 million) would generate $19,000 in taxes, but it wouldn't give anyone but the owner any enjoyment, now would it?

Private developers over-built in Cinncinnati, probably misgiuded by NGF forecasts. Now that the economy has foundered all that over-building has bit those same people in the ass and muni golf is the big target. I don't blame them for making their play on the tax issue, on the other hand I don't know any private developers of golf courses that are willing to leave green fee/F&B dollars on the table to keep golf affordable.

Do you?

[Matt_Ward]

Jim K:

You raise a good point -- often times the municipality or county that enters into a lease arrangement may not fully comprehend the smallest of the print. What can happen is that the taxpayers of that respective jurisdiction get shafted for less than what they should have been receiving.

Ditto on the motivation of the person who called for the tax on golf properties. Usually where someone stands on an issue is determined where they personally sit !

Jim, you are also right -- the reliance on NGF reports calling for mega golf coursre construction played a role. So did the greed of those who came onto the scene late with all their rosy residential sales projections when such courses were opened. Of course, it's e-z to blame the taxpayer jurisdictions with these failures as Archie is saying.

Archie:

I have stated your views quite accurately.

You only see room at the muni level -- low level stuff and nothing more than that.

Let me also point out that public land is tax exempt from real estate taxes -- are you advocating that taxes be paid on such properties?. Please name for me a jurisdiction that taxes it's own properties.

You also didn't seem to understand that I am not in favor of taxpayer jurisdictions creating mega Chambers Bay layouts either.

My point on pricing is that the very course type you are advocating in NJ has been the main culprit in charging the 8th most highest fees in the country. They have not really made an effort in spreading themselves open to the masses that play the game. Their primary intent has been the ones with the deepest of pockets. Please Archie -- try to realize that muni development golf came about because of this tunnel-like vision that CCFAD's and other such courses pursued. If reasonably priced privately-owned daily fee courses were available - the need for such munis would not be needed.

[archie_struthers]

 


Matt you once again misrepresent what  I said, please refer to page one where I clearly spoke differently as to Behtpage et al.

As to real estate taxes , would the question as to taxes have been raised if I didn't know municipalities were tax exempt. Many NJ towns have lost tremendous tax revenues due to open space purchases of undevelopable land.

Please tell me that your council  or county isn't looking at a project to build or acquire public golf ? If so in the light of full disclosure you should tell us.  

I clearly said government has educational responsiblities to its citizens , so your amalgram re Princeton and Rutgers is moot> at least relative to my stated opinions...another misrepresentation

I did clearly state that government should not own a hamburger or steak house , not because of any Mad Cow fears but rather there are people /citizens that have invested their hard earned money in the restaurant business and don't need any tax  payer assisted competition. Why  is golf any different

[Jim_Kennedy]

Archie,

As I'm sure you know, the govt. assists restaurants by its food safety programs, like USDA and inspections by local health departments.
These two programs put the power of govt. behind the dining transaction, in essence assuring the public that they have a modicum of safety when eating out. If I don't see an "A" on the wall I don't eat there.

Some municipalities let their seniors, homeless, and disabled persons use govt. subsidized food cards to eat at restaurants that have met certain criteria established by the municipality.

Google "Economic Development Commission", you'll get back 23,400,000 hits. From 'burgs to Broadway EDCs have provided taxpayer dollars to revitalize areas which bring in all sorts of retail establishments, including restaurants.

These are all ways that govt. has subsidized restaurants over the years. Never mind the cafeterias at state colleges, or the Pentagon's restaurant, or the restaurant at Langley, or the restaurant on Capitol Hill, and onandonandonandon.

Granted, we have yet to see a chain of govt. owned diners, but we have spent many tax dollars on all of the above. 


+

[archie_struthers]

 

Jim , I'm sorry that this disintegrated into a political debate . In my personal experience with big government here in NJ , I would have done much bettter working with Tony Soprano.

Perhaps someday we will fix it , but many enjoy the way it works. If you think regulation of business equates with owniership we are light years apart. That you speak to inspections only reinforces my argument as to unfair competition, Have you ever  seen a government owned entity get red tagged ??.   



 If the Omnibus Bill introduced today is transparency in government at its best , can you really trust them with anything ?

no mas only golf

[Matt_Ward]

Jim:

Well said.

The sad part is that Archie has a bad taste in his mouth because of a local related concern. I can understand that but it's totally inane to then paint with the widest of brushes. In Archie's world -- all politicians are suspect and all motives of gov't are clearly wrong-headed.

Archie:

Misrepresent ? Come again.

Minus the Bethpage situation -- you simply said -- and I repeat it again for your benefit -- that gov't should not be involved in the golf course side of things -- save for the low level muni's which would provide an entry point for most beginners and novice players. I believe that CCFAD's of the Chambers Bay sort is not the way to go with the limited tax dollars involved.

However ... I do believe that the efforts of such places as Monmouth, Morris and Somerset Counties -- all in NJ -- have done exceedingly well and can serve as the guiding post for others to follow.

Archie, you say "many NJ towns have lost tremendous tax revenues due to open space purchaes of undevelopable land." OK. Can you please cite for me the towns you claim and the itemize the amt of $$ you say have been lost. I'd be curious to know the specifics.
In the community I represent there is no desire to get into the golf side of things. We already have a county facility that provides the kind of bare bones type of golf that you favor and that I concur with.

Archie, you stated from the beginning that government should not duplicate what the private sector can provide. Under that reasoning there is no Rutgers University -- just go to Princeton.  The same can be said for public libraries -- just go to the private book store along any mall or elsewhere. Ditto for parks and other recreational programs -- let the private sector be the only provider.

What you always ignore -- simply because you can't refute it -- NJ has the 8th hightest green fees in the nation because privately-owned daily fee courses went hog wild with prices when the economy was humming along. Now that things have changed it's easy to cite the taxpayer-owned courses as the main culprit.

[Cliff Hamm]

I did clearly state that government should not own a hamburger or steak house , not because of any Mad Cow fears but rather there are people /citizens that have invested their hard earned money in the restaurant business and don't need any tax  payer assisted competition. Why  is golf any different

I will briefly enter the fray for better or worse.  Of course in the end this discussion does come down to politics and the role of government.

In the case historically government has played a significant role in providing recreational opportunities for its citizens.  Government has not historically been in the restaurant business. In New Jersey there are public pools, which directly compete with private pools.  There are public tennis courts which directly compete with private ones.  

Public access to the ocean in New Jersey is unfortunately quite limited.  So the state steps in and provides public state parks.  These compete with the fortunate few that have property giving them access.  There is also private access for a fee.  For example, I spent many a summer at Jenkinson's Beach in Pt. Pleasant.

Libraries, as noted are provided, competing with private book stores.  Public parks are provided.  The arts, such as classical music and opera, are typically subsidized not to mention museums.

One can argue where the line should be drawn.  Historically though government has seen fit to provide its less well off citizens with recreational opportunities.  This has included golf.

Examples of relatively recent government built golf that pass the sniff test include the many publics on Cape Cod.  Excellent courses.  Enhance real estate value.  Allow golfers to play quality courses as access to Eastward Ho does not come easily.

Makefield Highlands in Pennsylvania might be another example.  Built in an area where little quality public golf exists.  Fair, but not cheap greens fee, at least for non residents.  High quality course.  CCFD, not quite but still an excellent experience.  Again, a worthwhile government endeavor that has enhanced the township.

If one feels that government has no place outside of defense and infrastructure so be it.  But that is not our history and we are better for it.

[Steve_ Shaffer]

Just saw this in Athletic Business Magazine:


Melrose, Mass., mayor Rob Dolan has unveiled plans to use $5.5 million in revenue from a local municipal golf course to fund the renovation of the football and baseball fields at Melrose High School and the construction of two new athletic fields at a city park. . .

http://melrose.patch.com/articles/athletic-fields-legislation-on-governors-desk

[Jim_Kennedy]

Archie,

This isn't a partisan political debate, it's about the collective decisions that a community makes and the impact those decisions have on certain segments of the population, in this case privately owned golf courses.  

You and other owners feel screwed, the many tens of thousands of folks who play the munis in your state do not.

[archie_struthers]

 

Hey guys ...Cliff ...Jim and even Matt (God bless him )  merry christmas......I can tell you that unless you understand intimately how the government  can screw you , you will not understand my position.  My life has been blessed but I am very scared of the rampant growth of government and regulatory agencies against which there is no defense for the average joe.

I used to think it was a level playing field , it isn't.  Every permit we had to get cost five times that for the county course , and if I still owned it writing this would guarantee problems going forward.  It's really sad but true.  This is just the tip of the iceberg but I've already said more than I should and probably will be punished for it! 


 In my small home town of Ocean City , which is only slightly corrupt , the cost to get a permit for a deck is more than the construction of same......think about that for a second........it costs more to get the permit than the contractor makes on the job....you need an architect , two surveys , three inspections and whatever else the city decides to throw in ....if you protest , the legal costs are even greater than the fees so people just acquiesce to the machine.   

Hey guys thanks for caring , hope nothing but good happens to all , peace and love !

[Cliff Hamm]

Archie...thank you for the kind words during this season...It is obviously beyond unfortunate as to how you were treated.  While despicable I do not believe this is a reason to punish golfers by having no government run courses.  I suspect your experience was worse then most but hardly unique.

Your example of Ocean City does seem extreme. Perhaps a bit of an exaggeration that it costs more to permit than build the deck?  Costs routinely run 5-10K to build a deck.  In my area it is unheard of to need an architect for a new house, addition, never mind a deck.  As long as it passes code it is typically good to go.  At the same time the code can be onerous, encouraging many to just go without the permit.

Again, I do understand your feelings, anger and frustration with government. I have experienced the same but also with the private sector.  Try getting service for a warranted computer without frustration and anger.  Impossible..

Given all this though, again, it is no reason to stop economical golf.

Unfortunately I do not understand how some are so pro government and anti business and some so pro business and anti government.  I have come to the cynical conclusion that you can't trust either and that incompetence is rampant in both.

Merry Christmas!

[Mike_Young]

After reading all of this....one question....
Can the govt do a better job than the private sector?  No....
Can one give me one reason why the govt course competing with the privately owned course should not pay taxes?  No...

[Jim_Kennedy]

That's two questions.

1.- Govt. can do it just as well or better, as shown in the link just posted by Steve Shaffer.  

2.- Who would they send the tax revenues to, themselves?  

[Matt_Ward]

Mike:

With all due respect -- what planet are you on?

Public property is owned by the taxpayers. It is exempt from property taxes for the most obvious of reasons. Other taxes are indeed paid for employees working there.

In regards to govt doing a better job -- play the taxpayer-owned courses in Morris, Monmouth and Somerset Counties in NJ and decide for yourself. It's quite simplistic to say and flat out wrong to believe that everything that is government done is inadequate, poorly planned and mismanaged. 

Cliff:

Yes, we are better for it. Without the involvement of gov't it's likely few opportunities in a range of areas you mentioned would have been available.

Archie:

You make broad generalizations and it's e-z to state all are corrupt -- that the entire system is run by thieves hellbent on picking your pockets as well as others. I deal in specifics and while NJ does have its reputation in certain quarters -- there are fine minds that do right each day. Archie, when people get bad experiences -- they extarpolate that respective case and then shout that all are the same.

It's quite simplistics and frankly dead wrong. Enjoy your holiday -- peace and good will too.

[Mike_Young]

Jim and Matt,
Let me rephrase...
Should the private owner competing with the govt course be expected to pay taxes on his operation while the govt course does not?

And....I am sure there are some very well maintained govt courses....with very few exceptions I would bet they spend more for the same results....

[archie_struthers]

 

Matt , I didn't say all politicians are corrupt, but many are... we were forced to build a 3,000 foot bike path/sidewalk on the entire road frontage along the golf course....to this date the county course hasn't built a single foot of like path our cost over $85,000 their cost 0

We were mandated to put substantial plantings all along the same frontage ...they have still not put any in .....Our cost over $150,000
to 0$  

Twisted Dune was built by excavating fill and exporting it out to road jobs and to help fill the H-tract in Atlantic City, thus creating some nice elevation change and allowing us to build the dunes  (and recoup some money)

A county road supervisor said she whould testify as to the harassment we received by the township , as they consistently tried to shut down our job and truck traffic throughout construction

EHT tried to pass an ordinance outlawing any removal of fill from the township , it would have crippled our job, we fought and won with the help of the truckers who we employed to transport the material however the legal costs were really bad

there is so much more ....like the politically connected  middleman who made over 5$m  selling our fill  to the state job in AC when we made less than $ 2m , it cost me the golf course

 you've ccused me of having no specifics, there are four or five instances .. every day there was something new....just deal with the sidewaks and landscaping irregularities if you will...explain why the publicly owned course doesn't have to follow it's own ordinances tell me that they don't have an  unfair advantage

well it is Christmas so le's just enjoy the omnibus bill  

maybe they'll pass some earmarks for golfers who can't get on a great course for cheap  lol

[Jim_Kennedy]

Mike,
Let's call them what they are, municipally owned courses, and municipalities are groups of people. The citizens of a municipality have the right to dispose of any golf course the municipality owns at any time by voting to do so. They are also the people who approved the building of that municipally owned golf course in the first place. Munis also predate privately owned public access courses  by many years, there was no 'boom' in daily fee courses until the mid to late '50s, they are late to the party.  

I would say this: any community that has a muni course has made the decision to provide themselves with a recreational opportunity, even if privately owned public access facilities already exist in their town.

You should really be asking them your tax question.