Is it a good thing that golf courses have become businesses?

[Mark Johnson]

3)  This will be the most controversial of all my reasons, but I don't believe municipalities should be running golf courses at a loss.   I think there are too many other important things and as a big advocate of less government, i dont really think there is a role for government here.

What about other sports and activities. The pool example above is an excellent one, but there's also tennis, basketball, shooting, archery, etc. (and in a decent sized municipality, the diversity can be impressive).

Do you think that municipalities should not be running any of these at a loss? Or is golf somehow different? Whereby it's ok to run the pool at a loss, but not the adjacent golf course?

I think any fee-based activity should not be run at a material loss to taxpayers.   I think park district should definitely give discounts to residents, but not to the point where it is not profitable.   (to you point, i have no issue with a park district provides some basic maintenance to a non-fee based location (e.g. a park or tennis courts) which are not staffed.

In Edina, we are actually in the opposite situation where the driving range is so profitable, it literally underwrites the entire parks program.    As a result, there are many activities which are run unprofitably and rather irresponsibily.

[Bradley Anderson]

Municipal swimming pools, tennis courts, ball diamonds, picnic areas etc. are all underwritten by tax dollars. So why are municipal golf courses under such intense scrutiny from park commissioners these days?

I wonder how many of the original municipal golf courses were developed as profit centers? It seems to me that municipal courses were originally chartered to provide recreation to their community. Generally the land was donated and the modest fees barely covered the cost of operations.

Then in the late 80s and through most of the 90s the municipal courses became big revenue makers. Now that the golf bubble has burst and municipal courses are back to merely breaking even, park commissioners are looking at the golf course as a poor performer.


 

[Sean_A]

Aren't the 80s and 90s also times when municipalities also started to get more heavily involved in expensive munis?  I have nothing against an affordable muni (pool, hockey rink etc) running at a reasonable loss unless the land can better be used as an alternative amenity for local citizens.  I do have a problem with developing expensive munis (read anything over about $30) or even cheap munis when the area is already well served.  Its one thing for a guy to start a golf course when he knows there are competitive, well established munis about, but its quite another for munis to get into the game when an area is well served - thats bad government.   

Ciao

[Rich Goodale]

I think all golf courses have always been "businesses" in the broad sense of being a financial entity created and operated for the benefit of owners and users.  The only difference these days is that more and more courses understand this fact.

[Mike_Young]

There is nothing wrong with the "for profit" public golf model.  The problem is the model that was adhered to for so long.  Over the last 25 years you either had a RE development in which the course was there to sell lots or you had an overbuilt "CCFAD".  People that were sbeginners could not learn to play on these because they were always designed and built to "best" the one that was built down the road the last week. 
I am still of the opinion that the marketing idea of using golf architects as a marketing tool was the downfall of golf over the last 30 years.  We never knew who the architects were growing up....but the cost incurred to golf in trying to "best" the other is the problem.  Forget that and you can still do well with public golf for profit.

[Jason Connor]

Very interesting thread.  I agree that courses have always been businesses.

I learned the game on two different 9 hole courses, both privately owned.  I don't think there is a municipally owned course within 3 or 4 counties of where I grew up (in Appalachia).  Both were very cheap -- cheap enough that my blue collar dad could take himself, me and a one of my buddies to play often.

The most interesting thing about CCFADs to me is the pace.  People join a CC largely for availability and pace of play (that's why I would anyway).  But oftentimes CCFADs offer neither of those.  They really just offer a 'pretty' course and at least on weekend, full and cramped tee sheets.  And certainly most guys I see at CCFADs would find a regular public course plenty challenging for their mediocre games (and I have such a game too, so that's not a slam -- my own lack of talent makes the game hard, I don't need ponds and fountains and 13-stimping greens every hole).

I'm pretty politicly conservative (financially anyway) but I don't think every  public entity has to pay for itself (e.g. the pool, the golf course, the baseball fields).  I suspect when I'm old and never use the public pool,  I'll still think my money is well spent for a place where the kids get fenced in and stay off my lawn.

That said, I don't think muni's should try to compete with CCFADs, keep 'em cheap and available to the kids, the seniors, and the working class.  Especially since real estate prices have driven many private courses up in cost and away from a cost structure that allows for such a broad user base.

[Jason Topp]

Aren't the 80s and 90s also times when municipalities also started to get more heavily involved in expensive munis?  I have nothing against an affordable muni (pool, hockey rink etc) running at a reasonable loss unless the land can better be used as an alternative amenity for local citizens.  I do have a problem with developing expensive munis (read anything over about $30) or even cheap munis when the area is already well served.  Its one thing for a guy to start a golf course when he knows there are competitive, well established munis about, but its quite another for munis to get into the game when an area is well served - thats bad government.   

Ciao

I do agree with this perspective although the price point should vary by the dynamics of the location.  I see a government run golf course as a wonderful amenity if it is for the purpose of providing recreation at a reasonable cost to citizens who would not otherwise have such recreation available.  When it goes into the CCFAD mode, priorities get tangled up in the wrong direction.  It creates a bunch of perverse incentives and puts financial pressure on taxpayers that often is hidden.  We see the same sort of dynamic with respect to gevernmental broadband investment.

[Andy Stamm]

Municipal swimming pools, tennis courts, ball diamonds, picnic areas etc. are all underwritten by tax dollars. So why are municipal golf courses under such intense scrutiny from park commissioners these days?

I wonder how many of the original municipal golf courses were developed as profit centers? It seems to me that municipal courses were originally chartered to provide recreation to their community. Generally the land was donated and the modest fees barely covered the cost of operations.

Then in the late 80s and through most of the 90s the municipal courses became big revenue makers. Now that the golf bubble has burst and municipal courses are back to merely breaking even, park commissioners are looking at the golf course as a poor performer.

That's my biggest gripe, that golf courses are treated so differently than other similar recreation centers, when there isn't a good reason why, and I think it's detrimental to the courses and golfers.

I think it strange that some people think that a course should be run to break even (more or less) and then additional profits be forgone to give discounts to residents, juniors, etc. Profitibility is an arbitrary point. It makes more sense to say either, the course is run as an amenity (and a lose is ok) not for profit, or it's run to maximize profits. After all, additional revenues are going to be put to use in other areas and/or offset other taxes.

The 'big munis' (like Bethpage Black, Harding Park, and Torrey Pines) are good examples. Presumambly they could be run to make (quite a bit) more money. And I'd guess that they don't lose much money because they're busy and not that cheap. If you think they're a public service, you set a price that allows access and provides some revenue. If they're about makning money, you run them like any other course and use the money made elsewhere. To aim for a point of break even is completely arbitrary.