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Salt Lake City golf program in danger of 'death spiral,' report says

Published March 24, 2014 10:49 am

Revenues won't be able to keep up with costs of maintenance unless city officials act quickly.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

If dramatic changes aren't made soon, Salt Lake City's golf program could slip into a "death spiral," in which revenues can't keep pace with maintenance, leading to fewer golfers and even less revenue.

That's the finding of a 206-page report commissioned by the municipality to enhance the eight-course system that has racked up $22 million in deferred maintenance and capital improvements.

One of the most striking options outlined in the report by Florida-based National Golf Foundation is the recommended closure of Rose Park Golf Course and nearby Jordan River Par-3, which has nine holes. Those courses provide less revenue than the city's other courses.

The city's golf courses operate through an enterprise fund that is not subsidized by taxpayer dollars. Its annual revenues of about $8 million keeps pace only with day-to-day operations, said Rick Graham, director of public services.

But according to the report, all the city's courses are in "declining physical condition" and have a lack of adequate amenities, such as clubhouses and food and beverage services.

"Our review showed that Salt Lake City golf courses generally do not compare well to their immediate competitors, with playing conditions and clubhouse amenities that are below standard," the report states. "However, despite the conditions, Salt Lake City golf courses tend to offer a comparable pricing schedule. ... The overall value received for the green fee paid was low."

Nonetheless, the consultant said there is "a lot of reason for optimism" because "the issues that led to declining financial performance are correctable."

Millions in upgrades • The report lists at least $11 million in upgrades that should be made in the near future. Where the city will find the funding, however, is unclear.

The City Council will begin discussing the matter at its March 25 work session at 2 p.m. in Room 326 of City Hall, 451 S. State.

The report is a call to action, according to Graham.

"I'm glad we got the report," he said. "It was very enlightening and thorough and drilled down into the core of the issue — the fund can't survive without investment."

The consultants also offer an alternative to closing Rose Park. The city could "re-configure the property to a more manageable, efficient and market-appropriate mix of amenities," the report states. A so-called "executive course" that is shorter is one consideration.

The report also said the cost of water far exceeds national benchmarks and "threatens the ongoing financial viability of the golf courses."

The city's courses operate on culinary, rather than secondary water, and pay the full rate, even though Salt Lake City operates the water system. Last year, the golf water bill was $1.3 million.

Despite their shortcomings, Salt Lake City's golf courses are popular, the report states. And revenues could be improved with better technology for setting tee times and the creation of databases, better marketing using that data, website marketing, better branding with a Salt Lake City golf logo, more advertising and more tournaments. In addition, the program could enhance revenues through naming rights, donors and partnerships, the report states.

Not least, the city could sell land adjoining courses for a one-time infusion of money.

For years, Graham said, city officials have planned such things as new irrigation systems and clubhouse upgrades, but because the golf program was set up to be self-supporting, most of those plans were financially beyond reach.

"The golf fund needs money," Graham said. "This [report] takes us to the place we've hoped it would" as the Becker administration and City Council begin budget deliberations for the fiscal year that begins July 1.

Course closing, fee hikes? • Salt Lake City golfers want better maintenance, but they don't want to lose the Rose Park course, said avid golfer Ron Cohn, who often plays those links. Closing or redesigning the course makes no sense, he said.

"It's a fun layout and is one of the gems of all the city's courses," he said. "Even in its rundown state, it's still a gem."

Cohn said it's hard to believe the Rose Park course doesn't make enough money, because it's often busy.

"There has been mismanagement," he said. "Mistakes have been made."

Cohn agrees, however, that the golf system desperately needs an influx of cash.

"It hasn't had normal maintenance in years and years and people notice that," he said. "People want a place to go that's clean and hip. For the future, it needs an update. But you don't have to start over."

The study also suggests changing green fees at various courses. The consultant recommends that green fees at Mountain Dell be increased from $49 to $72 for an 18-hole round plus cart, and Wingpointe should go from $47 to $50. It also suggests that Glendale be decreased from $44 to $30, and that green fees at nine-hole Nibley be reduced from $34 to $31. Bonneville and Forest Dale should remain at current rates of $49 and $37.44, respectively.

It adds this caveat: "Increase fees on a consistent basis to keep up with inflation."

Council Chairman Charlie Luke said the city cannot put off capital improvements and deferred maintenance any longer.

"The longer we wait, the bigger these problems become," he said. "Business as usual is not going to work. We have to change our approach."

Luke does not favor closing the Rose Park course, but he said the report "opens a lot of opportunity for discussions" on a number of topics within the golf system, including redesigning the links at Rose Park.

Naming rights and partnerships will be important to the future success of the program, he said. "The hole has gotten so big that we'll need help filling it," he said.

But the council chairman said options other than bond financing should be exhausted before the city takes that step. Nonetheless, all funding options are bound to be part of the council's discussions as it moves into budget deliberations.

"We'll have a better sense Tuesday when the report is formally presented to us" by the consultant, Luke said.

csmart@sltrib.com

Recommended green fee* changes

Mountain Dell • Increase from $49 to $72

Wingpointe • Increase from $47 to $50

Glendale • Reduce from $44 to $30

Nibley • (Nine holes) Reduce from $34 to $31

Bonneville • No change from $49

Forest Dale • No change from $37

Rose Park • (If it remains open) Reduce from $42 to $32

*(18 holes plus $14 cart)

Source: NGF Consulting

 

 


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