Island Talkback: Golf Complex
By Robert T. Sullwold
Nearly a year ago, the City Council chose to negotiate a long-term lease of the Chuck Corica Golf Complex with KemperSports based on Kemper’s purportedly superior ability to fund capital improvements the city was unable to pay for. But the council made clear that the “starting point” for negotiations was continued operation of two regulation 18-hole courses (with the nine-hole Mif Albright course to be operated by a non-profit organization).
At a special council meeting on January 25, Kemper appeared to come through on the financial front: It said it was willing to commit $5.25 million for capital improvements. But the commitment came with a catch: Rather than continuing to operate two 18-hole courses, Kemper conditioned the financing on reconfiguring the golf complex into three nine-hole courses. (As it turned out, Kemper really had no intention of investing any of its own money in the golf complex. Rather, it expected – allegedly based on a promise by the former interim city manager about which other staff claimed to be blissfully ignorant – that the city would float a bond to pay for the capital improvements.)
Fortunately, the acting city manager nixed the idea. Unfortunately, she declared that her only alternative was to go back to Kemper for a revised proposal.
It appears that somebody has been fooling somebody. The folks in Chicago continue to call the tune, and, once they make their next proposal, the city’s job is to decide whether to salute.
At numerous council meetings, the golf community has made it clear that golfers want to retain the existing courses. To the golf community, turning two 18-hole courses into three nine-hole courses would be like airblasting the image of one of the Presidents off the face of Mount Rushmore.
Outside of pricey resorts, it is rare indeed to find a golf facility in Northern California that offers two championship 18-hole courses presenting, as the golf complex does, vastly different challenges.
No less an authority than the National Golf Foundation, which was commissioned by the city to conduct an operational review of the golf complex in 2007, recognized the value of the 36-hole configuration. According to NGF, “The Chuck Corica Golf Complex benefits from having two 18-hole golf courses with the potential to offer unique and rewarding golf experiences … Opportunity exists to position each city course uniquely, taking advantage of strengths associated with each course … Pride and quality can be restored to the historic City of Alameda golf asset.”
Two major tournaments are held annually at the Chuck Corica Golf Complex: the East Bay Juniors (in its 76th year) and the Commuters (in its 85th year). Both of these tournaments require two 18-hole regulation courses. Turn the golf complex into three nine-hole tracks and Alameda may have seen the last of them.
This is not just a historic preservation issue, but an economic issue as well. Tournaments generate significant revenue, not only in entry fees but also at the pro shop, driving range, and restaurant. With 36 holes, the golf complex can run a tournament on one course and enable regular golfers to play a regulation round on the other. If that opportunity is taken away, golfers who aren’t playing in the tournament are likely to go elsewhere.
For whatever reason, city staff and Kemper have been peddling the preposterous proposition that the 27-hole plan is the only way to save golf in Alameda for future generations. For years, the parks director and other city staff have been telling council that the golf complex is bleeding cash from the city.
Staff’s assertion is a canard. The golf complex always has generated an operating profit. It never has taken a dime out of the general fund. In fact, the opposite is true: The city not only transfers all of the golf complex’s operating profits to the general fund (rather than using them as intended, to fund capital improvements), but it also draws down the golf enterprise fund whenever annual operating profits are insufficient to satisfy the city’s desired subsidy. The city has been treating the golf complex as a cash cow – and milking it dry.
Equally false is the argument that revenues from operating two 18-hole courses have been spiraling downward so rapidly that only a radical reconfiguration can avert calamity. According to the city’s own data, revenue from Fry and Clark greens fees, monthly passes and cart rentals in the last fiscal year was virtually the same as it was five years ago.
The city already has been given a road map to preserving, and enhancing, profitability for operating two 18-hole courses. Unlike Kemper, the other long-term lease bidder, Bellows Golf Management/Landscape Golf Group, presented a detailed plan showing how two 18-hole courses would generate enough profit not only to pay rent to the city but also to fund capital improvements and to establish a reserve fund besides! After the Kemper proposal hit the wall, Bellows renewed its interest in operating a 36-hole Golf Complex and two other golf management companies chimed in with their own expressions of interest.
At the council’s January 25 meeting, Kemper’s vice president insisted that the golf complex was suffering from “overcapacity” and that three nine-hole courses would be adequate to satisfy demand. He also maintained that, while Kemper could “afford” to pay the debt service associated with making capital improvements to 27 holes, the cost of improving all 36 holes would be prohibitive.
The “overcapacity” argument is appears to be based on the mistaken assumption that utilization of the golf courses is evenly distributed between weekdays and weekends and throughout the day. In fact, weekends get more play than weekdays; early mornings get more play than midday. Were nine holes eliminated, the golf complex would have to operate at 87 per cent capacity to accommodate demand on an “average” weekend day. Should demand exceed the average on a weekend day, golfers would be turned away during the peak – and most profitable – periods. And if they’re turned away, they’re unlikely to come back.
The “cost of improvements” argument is no more persuasive. Kemper told council that renovations to 27 holes could be done for $5.25 million but that it would take $8 million to fix up all 36 holes. Kemper didn’t bother to explain why the incremental cost for nine holes – $2.75 million – was so high. In addition, for the $8 million figure, Kemper cited NGF. But what NGF actually said in its September 2007 operational review was that the cost of improvements would be about $3 million for the Jack Clark course and $3.25 million for the Earl Fry course. Bellows/Landscape later estimated that renovation of the entire 36 holes – and of the clubhouse and driving range – could be done for $5.15 million.
One final point: If nine holes are shut down, what’s going to happen to the land on which the closed nine holes sit? Even if someone wanted to build houses so close to the Oakland Airport runway, section 22.12 of the City Charter would make it difficult for the city to sell or lease it to him. Back in 2009, when the parks director was hot to close the Mif Albright course, he told council that it would cost as much as $4 million to convert that land into another recreational use. And even if the land is left to lie fallow, the grass would have to be mowed and watered – at City expense.
If past is prologue, city staff will unveil its recommendation for a long-term lease of the golf complex on the Thursday before a Tuesday council meeting. And then the Kemper team will fly out from Chicago armed with their PowerPoint presentation touting a revised version of the 27-hole plan. Members of the public will get the usual three minutes apiece to make the case for preserving two 18-hole courses. One can only hope council will listen – and they won’t get fooled again.
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