Should Govt Be Involved in Golf?

[Jeff_Brauer]

http://www.mlive.com/sports/jackson/index.ssf/2010/12/governments_role_in_owning_gol.html

This topic comes up every so often and this article encapsulates both the govt and privately owned public golf course points of view.

Discuss.

[Bill Rocco]

Looks like Matt Ward beat you to the punch, he posted a thread on the subject and article

[Dan Kelly]

Without understanding the matter well enough to foresee the implications, I'm inclined to agree with this -- from the article:

“If a single penny of taxpayer money goes to subsidize a golf course, it’s one penny too many,” LaFaive said. “This is the least necessary of least necessary government services.”

I also think: The "public option" is a good thing for golf -- so long as golfers, not taxpayers, pay the freight.

[Mike Nuzzo]

I'm not saying if the city should or shouldn't - just that it is worth more than a penny.
How much does a park (with basketball and tennis courts) cost to build and maintain and keep safe?

[Jim_Kennedy]

In 2006 there were 823 privately owned and 91 municipally owned golf courses in Michigan.

Where's the beef ?

[Matt_Ward]

Jim:
Not all publicly owned courses break even or make a profit -- in that case the taxpayer has to contribute to their operating expenses.

I only wish Archie S sees this thread to weigh in.

[Jim_Kennedy]

Matt,
True, and others break even or make money, and they put money in the pockets of the investors who bought the bonds that the municipality sold to finance the project in the first place.    

[Kevin Lynch]

Isn't this really a question of whether Government should "get out" of the existing business?  The term "involved" gives the impression that some governments are actively starting new involvement with courses.  From most of my exposure with muni courses, there are very few that were developed recently (i.e. in the last 30-40 years).  It seems like most municipal courses I have seen were built in a time when privately-owned public golf courses weren't too prevalent or when there wasn't too much private interest in building a course that the community could benefit from.  

I really haven't heard of too many new courses where a municipality has made the investment and added "subsidized" competition to an existing marketplace.  If that were the case, then many of the "anti-involvement" points in the article would be more valid.

However, in the case of existing municipal courses, I don't think the arguments of "inappropriate involvement" or "improper competition" hold up.  Many of these courses were built at a time when private investors weren't willing to make such an investment because the sport was not as popular as it is today (and was viewed similarly to a public park or other service made available because the private sector was not servicing the community).

It seems a little disingenuous for private-sector advocates to want so badly to get involved only after the municipalities had made the hard initial investment and helped contribute to the growth of the game.  Turning these courses over to private interests doesn't seem like an optimal situation, especially when the municipal courses are often the refuge for beginners, as well as lower income / fixed income populations (e.g. senior citizens).  These populations generally are under-served by those driven more by "profit-motive" than "non-profit community activity."


Of course, there does come a point where the cost of "community activity" is too high and would be unfair to the general taxpayer.  I agree with Mike Nuzzo's point that the "single penny" shouldn't be the barometer, as there are other less controversial activities (swimming pools / tennis courts / etc. ) which do have some level of cost.  

[Tim Martin]

I agree with Kevin in that very few municipal golf projects have broken ground recently. As far as older municipal golf course operations unfairly cutting into the business of private developers seems a stretch. If the developer does his due diligence he knows how many rounds the muni does a year and what demographic uses its course. In a down economy rounds will increase at municipal facilities due to their price points. These prices have always been available but are much more enticing due to the decrease of disposable income. What munis do as far as growing the game is invaluable just from the junior golf aspect alone.

[Duncan Cheslett]

State owned golf courses?

I never realized that socialism was alive and well in the US of A!

[Ken Moum]

As I said in Matt's thread:

If golf is going to survive and thrive, there are currently too damned many CCFADs and not enought munis.

That said, I don't think that golf has the standing it needs in most communities to get a tax subsidy.  Sadly, golf has an image problem that keeps it from getting the love that parks, softball complexes, soccer fields, etc. get.

Without decent, cheap places to play golf, the game is going to die a slow, agonizing death.

[Matt_Ward]

Kevin:

I don't know where you can say that most muni's were not built in the recent time frame -- the last 30-40 years.

Frankly, there have been -- in plenty of jurisdictions throughout the USA. Many of these jurisdictions jumped in because of the opportunity to make $$ and because of certain ingrained advantages (no property taxes and the wherewithal to use contractual services for lesser costs than on the open market) they opened their doors.

My area of the USA -- metro NYC -- has some of the highest land costs in the nation and the taxpayer-owned jurisdictions went ahead and opened up various courses -- some though the private condemnation process -- even when privately-owned daily fee courses which were already there. One of the classic examples along the Jersey Shore which Archie has mentioned numerous times is McCullough's Emerald Links (named for the Mayor of the town) which competed against the other AC-area daily fee layouts.

Ken:

Isn't it possible that the daily fee courses won't alter their fees to reflect that situation and get those players playing there? It's either that -- or they perish. I can tell you this as a locally elected public official that with the budgetary crunch that everyone faces it's hard for a local juridcition or county one for that matter to justify holding on to such "luxuries" when vital services (e.g. police & fire) are on the chopping block.

[Kevin Lynch]

Matt -

Admittedly, I haven't researched all the "municipal" courses built by year around the country, but I was thinking primarily about Upstate New York and Cleveland Metro Area.  Similar to the course in the article, most municipal courses in these areas were built in the 1960s or prior (Cleveland has an 80 year old Stanley Thompson).  Also, in your neck of the woods, I was thinking of Bethpage particularly.

If, as you say, there are governments getting involved in already-established markets, than I think some of the arguments in the article make sense.  But it sounds like the areas where governments are getting newly involved are in growing high-population areas, where the prospect of making a profit is available (not really the case here).  In that case, then you have to assess whether the municipality is taking away from privates through unfair competition, or if it is simply providing a low-cost alternative that is being neglected or underserved by the privates. 

Perhaps the solution is in some type of hybrid, which has been done in recent years in Buffalo.  There were a few municipalities that received donated land to build a golf course, but the government couldn't justify the bond outlay.  In these cases, the land was turned over to private interests for development, with the stipulation that provisions be made to ensure golf development (i.e. through First Tee programs / discounted rates for certain populations).  I don't consider these to be "municipal" courses (since profit / loss risk is born by private entities), even though they may appear like that in certain statistical analyses.

[Matt_Ward]

Kevin:

Upstate NY is in a severe DEPRESSION ! Ditto the greater area in and around Cleveland.

You'd be surprised to know that plenty of locations in the metro NYC area used vacant land or land that was condemned and then taken for public usage during the last 30-40 years. Since these jurisdictions don't pay property taxes and since the cost to remain in business as a privately owned daily fee grew and grew they simply pushed the private layouts further away and with less of a margin to squeeze needed dollars to keep things going.

Counties such as Morris, Somerset and Monmouth in NJ all contributed a range if taxpayer-owned layouts -- ditto for counties like Hunterdon which opened their first with Heron Glen. LI was also quick to act -- Oyster Bay, a TF design in Woodbury is a great example of this type. Other spots included Harbor Links in Port Washington is another good example.

CT opened up with Pete Dye's effort in Wintonbury Hills -- just outside of Hartford.
Frankly, many of these developments came about in recent times as citizens in these area wanted such facilities paid for by the broader taxpayer base. Privately owned daily fee layouts simply got squeezed by costs that taxpayer-owned facilities were free to ignore.

You also state another erroneous conclusion -- the NYC metro area is not growing rapidly -- in fact, it's losing population when held against other states that are indeed growing. So what's happening is that growth in taxpayer-owned courses are working against privately held counterparts with a declining population base and with an overall golf population that is diminishing. As a result, you have more courses chasing less players -- the taxpayer-owned ones are simply subsidized by the taxpayer purse. That a huge advantage.

The issue is whether taxpayer-owned jurisdictions should be in the business when massive cuts are being made elsewhere -- often times those cuts are in more critical areas -- the golf course side, while noble to have, pales against those priorities.

Your example in Buffalo would be a workable concept but frankly there are simply too many courses in the overall market place anyway.

[Matt Day]

the Aussie municipal/council courses seem to run more profitable than the US.

We will pay for the 2010/2011 financial year $1.5 million back to the Town as a dividend for ratepayers, which equates to a subsidy of $150 per household. Other council courses (7) in Perth return dividends ranging from $100,000 to $600,000.

All as far as I know are totally self funded, they are not allowed to use public funds unless paid back as loans at commercial lending rates

[Kevin Lynch]

Matt -

Good to know I'm surving a depression here in WNY - however, I think your newspaper may be dated.  Most of the manufacturing left a few decades ago, so really we've simply been in a "low growth" period.  But at the same time, when your job market isn't oversaturated and real estate isn't speculatively valued, it certainly helps soften the blow of the recent times.

Regarding NYC, I meant to type "growing / highly populated area" (either) - meaning areas that there would be a reason for a government to add a golf course to a market.  If, as you say, an area does not have excess demand, then I think the criticisms in the article may be valid.  If the point is for a municipality to make a profit at the expense of existing privates, that could be viewed as "unfair competition."  However, if the course is truly self-sustaining and not having losses subsidized, it diminishes the "unfairness" argument.  But to a different point, what other usage would you suggest for condemned or abandoned land?  If not converted to something that had a public use (albeit, possibly to the detriment of other courses), what other usage would you suggest?  Would you give it away for housing / office development (which may give a new private developer an unfair advantage vs. existing developers?)  Or would it be better to leave the land idle so other private course operators could function with less competition?

Now, if municipalities are converting existing land for a community purpose that is underserved or over charged, I don't view that as a problem, unless there are large losses being subsidized.  If the course is break-even or even turning a profit, then I can't understand why there would be any relationship between the golf course operations and budget cutbacks elsewhere. 

Sorry - starting to wander in my thoughts - maybe I'll take a break for the night to watch my Sabres!

[Mike_Young]

Most can try to justify the muni project until it is your course that is competing with them and they are being subsidized....I have seen a mid sized town where the politicians were not big fans of the local "country club, semi private golf product"....they built the project susidize it to the tune of about $200,000 per year and closed the "country club" after about 2 years.....I don't know the answer but I do know that you don't see many private softball/tennis court complexes because they can't compete....and it might be golf takes that route for the next 25 years....don't know...

[Ken Moum]

Ken:

Isn't it possible that the daily fee courses won't alter their fees to reflect that situation and get those players playing there? It's either that -- or they perish. I can tell you this as a locally elected public official that with the budgetary crunch that everyone faces it's hard for a local juridcition or county one for that matter to justify holding on to such "luxuries" when vital services (e.g. police & fire) are on the chopping block.

Can't disagree with any of that, especially if the muni is sucking up a lot of tax money.  But I don't think they should do that under any circumstances.

What gripes me is the instances where operators of expensive daily-fee courses blame munis for their problems and demand that they be shut down to protect capitalism. 

My experience with public recreation facilities is that they are community assets, and are worthy of some support.  But golf courses aren't currently in a place politically where they can get much subsidization--unlike soccer and softball complexes.

K

[Phil_the_Author]

Since there are two threads on this same subject and I believe this to be an important point that has so far been overlooked, and especially because I don't want my buddy with the tacky red plaid blazer to think I'm ignoring him , let me repeat what I posted on the other one:

Long Island has a great number of private golf clubs, many pay-as-you go courses, county-owned and state-owned. There is such demand that only a Bernie Madoff scandal even in this economy could reduce the private club numbers.

This is where the government owned and operated courses have both the greatest impact and the greatest benefit for without it there would simply not be enough courses for the poubl;ic golfer who can't afford either private club membership or high-end daily fee courses to play.

What is the net result? Bethpage State Park PAYS for the majority of the budgets for the rest of trhe New York state PARK system. Not other golf courses, the entire park system! Those who want to spend a day climbing Bear mountain can thank those who play golf at Bethpage for covering the deficits that park runs up.

The problem in a discussion like this is that it IGNORES the success stories where EVERYONE in a state, county or community benefits. There are a number of them.

[Matt_Ward]

Kevin:

NY State will LOSE two Congressional seats with the current census. Job growth is way down and the tax collection efforts are only serving to drive more and more people elsewhere.

Kevin, when excess land is there -- how bout sell it commercially ? Why not use it for other purposes -- such as assisted living for seniors or for those who are mentally challlenged and may need group homes and the like. Those concerns dwarf those who want to play golf and I say that as an avid golfer.

I have no issue with taxpayer-owned courses -- how bout the model for them be executive style layouts that serve beginners and introduce new people to the pipeline. Do such taxpayer-owned courses need to be CCFAD style courses -- simply the reason for that is those in the town want OTHERS to support their golf need and want to have all the amenities to boot while someone else coughs up the $$.

I serve as a locally elected council person in my home community of Clifton in northeast NJ. We will likely be laying off public safety people because of the downturn -- we don't have a course under our domain but if we did then I'd be looking at either leasing it to a private provider or selling it completely. Other needs are more important to the general welfare of our community. Likewise the same story can be repeated for other locales as well. Kevin, one other point -- even if taxpayer-owned courses are doing well financially -- they exist through the public dollars they receivce -- it's no different than the arts being supported by the public treasury. Do golf an dthe arts provide a valuable item for many people. Certainly. But in tough times tough decision have to be made. Golf can exist through taxpayer-owned facilities -- but often times those erecting such faciltiies want monument akin to the pyramids in Egypt.

[Kevin Lynch]

Matt - I don't think we're in disagreement, given the circumstances you have described in your neck of the woods.  The Municipals in most areas I have visited generally fit the following pattern:

-  Were built decades ago when the private sector was underserving the community - thus, they didn't "squeeze out" privates through unfair advantages.  In these cases, I don’t buy the private sector’s cries of “unfair.”
-  Generally aren't CCFAD Models - these usually provide a low cost alternative.  In my area, I don't consider these to be "competition" to the local privately owned courses.  For seniors who want to play 60+ times a year, a $350 season pass is not something that would be made possible under any private course.   When these are able to “self-sustain” (without requiring subsidies from general taxpayers), I don’t have much of a concern.

It really never occurred to me that there would be municipalities getting into the Golf Business as a new investment in areas that are already adequately served.  But from what you have stated, it sounds like that is the case (and I wouldn't disagree too much with your opinions on those situations).

Regarding the excess land questions I proposed, I wasn’t sure what condition the land was in or what other viable uses existed.  Several posts ago, you mentioned that munis were built using land that was vacant or condemned.  Based on that comment, I was assuming that the reason the government took over the land was because there were few commercial prospects or residential building was not possible (e.g. environmental issues).  However, if there are viable alternative uses (e.g. assisted living), I would concur with your priorities.

[Matt_Ward]

Kevin:

Vacant land issues don't arise so often for municipalities to claim them -- usually they happen if there's a tax delinquency situation. You also have municipalities considering using enviromentally-sensitive parcels for golf usage because not much else can be used there. A great example is when ARC worked with a MT-community in Anaconda that created a JN design called Old Works. It's very successful -- maybe someone more familiar with its financial bottom line can answer. I've been there twice and it's quite imaginative on what was done there.

In these tough times -- if a taxpayers-owned facility can be sustained through the revenues it produces for users then more power to it and likely it can stay around. Those that lose $$ -- and there are more doing so not because of graft and / or corruption or mismanagement but because of clear circumstances tied to the general economy and the associated costs in keeping a course open with less people playing the game.

[Dan Herrmann]

All I know is what I've seen and experienced - And that's that municipal golf got me into the game and I'm forever in gratitude for its existence.

Whether it was town, county, or state - these were my "rota", and I loved them.

[Matt_Ward]

Dan:

I too share your love for "muni" golf -- I started my interest in the game at a county-owned facility where grass growth was tied more to the generosity of the Almighty than by any efforts from the staff.

The place was not special from a pure GCA standpoint -- but it provided a foundation to start with.

Those taxpayer jurisdictions capable in having such courses should target those just starting and those who don't need all the "bells & whistles." The pipeline is indeed drying up -- sadly.

[Tom_Doak]

Matt,

Like Dan, I grew up playing a municipal golf course for the junior rate of one dollar per round after 3 p.m.weekdays.

If not for that course ... the land was donated to the town by the farmer to build a course ... I would not be writing this, be use I could not have afforded to play golf.  So, I think there is a place for munis.

Local governments have done a TERRIBLE job of developing these facilities over the past 30 years in many instances.  However, recent economic circumstances are similar to the salad days of muni golf, when towns stepped in to keep failed cow try clubs from being abandoned entirely.  I understand that there are other operators competing in the same market today, but capitalism comes with no guarantees.