...After creating various cash flow models for Chuck Corica, we also concluded that “cessation of some, or even all, of the transfers, while a necessary component of any potential economic recovery, is likely to ultimately prove insufficient if the goal for the Golf Fund is to generate enough revenue to be sustain operations for the long term and fund necessary capital improvements”... (p.7)

That's right folks, the consultant has said that even if the City were to continue to "rebate" those ROIs back to the Golf Course from now until whenever, it wouldn't be enough to keep the Golf Course afloat.  The ultimate recommendation is one that they had offered way back when which was that:

...a lease agreement is the best solution for the City if it wants to stem the financial downturn, and preserve the golf facility asset for future generations. The lease would shift the burden of risk to the private operator, provide a guaranteed net cash flow to the City, and provide a means to partially or fully fund needed facility improvements that the City would not otherwise be able to fund under the current operating scenario or with a management company... (p.7)

The report goes on to list a series of Potential Revenue Enhancement options (p. 8) which includes:

• Sales of on-facility advertising revenues
• Leasing Mif Albright land as is (which would probably only generate $50K annually because of zoning restrictions, interesting factoid, Mif Albright is the only course irrigated with potable as opposed to recycled water.   Seems pretty wasteful to me)
• Lease and rezone Mif Albright land for use as a Hotel/Conference center with recreational component (like tennis courts, etc...)

However, they nixed the idea of adding a surcharge to fees specifically for improvement saying that golf course loyalty is pretty low these days and the added fees might chase folks away.

There are more specifics about how the renovation of the Golf Course would be phased in, it gets pretty indepth, but if you are into that I suppose it would be pretty interesting.   It would appear that all the courses would be getting a face lift and a marketing niche.   For example the Earl Fry course which was apparently designed by a prominent father/son team of golf course designers, would fulfill this blurb that was written for it:

The Earl Fry Course is a step back in time. In its classic parkland setting, the course is reminiscent of the Golden Age of golf — a time when bunkers were rugged and their use was sparingly. The course draws from the design philosophy of William Park Bell and his son, William F. Bell. The Bells, noted California pioneers of golf architecture, believed in strategic holes with tempting routes to overcome hazards. A round at the Earl Fry is like looking through the history pages of golf in Alameda. (p. 14)

Also unlike the decision that was made by the Golf Commission recently to raise fees for residents, the report instead says:

NGF’s recommended business model for this facility includes a green fee policy that will result in significantly higher priced non-resident green fees effectively subsidizing the lower resident green fees, a scenario that is common at many higher-end municipal facilities. (p.44)

However, I assume that is for golf courses that are so nice that they are a draw for players outside of the city in which it is located in.  In fact, one of the municipal golf courses mentioned as an example was one that was recently used for some bug name golf tournment.   The recommendations that staff has made based on these reports is for the Council to take three separate actions:

1. Issue a Request for Proposals to secure a long-term operator for the Chuck Corica Golf Complex.
2. Issue a Request for Proposals for an Interim Operator in order to reduce costs immediately.
3. Define options and identify the actions necessary to implement the Master Plan recommendation regarding the hotel/conference center development.

At this point, given the information everyone has available, what other choices does the City have?  I know that the Golf Commission is holding a special meeting tonight to present recommendations to the City Council for ways to increase revenues, it will be interesting to see how these recommendation align with those made by the consultant.

In other Golf Course news, how wacky were the two items from the police blotter that were directly connected to the Golf Course.  First, someone breaks into the "snack shack" and steals $532 worth of booze and then someone gets punched out on the greens.   Weirdness.

...Commissioners refuted the accusation that they've done nothing to address the financial problems of operating the municipally-owned golf course and took great umbrage at repeated references by the council to "rebating" the return on investment (ROI) next year, especially with the council equating the return on investment to subsidizing the golf complex.

"For years, the golf complex has been subsidizing the city, by paying it close to $1 million per year off the top," responded the commission.

In fact, National Golf Foundation Consulting, Inc., hired by the city to review the city-run operations, said in its Sept. 4 report that the golf enterprise paid $4.5 million over five years to the city's general fund. But, that was before the economy went sour...

Seems like the is a bit of a disconnect between the City Council and the Golf Course as to what the City is entitled to from operations of the golf course.    The Golf Commission appears to believe that all the money that is made by this muncipally owned Golf Course should belong wholly to the Golf Complex itself.   The City Council seems to believe that the ROI is just another bill that the Golf Course should expect to pay like salaries and toilet paper.   Considering that the ROI has been paid for the last five years, maybe more, at this point, in my opinion, it's a bill that the Golf Course should have anticipated annually and included in part of its budget.      And considering that our other money making operation, AP&T, pays an ROI every year into the general fund, why would the Golf Course be any different?

If the Golf Course were privately run and looking into hard times, they wouldn't be asking one of their creditors to "rebate" money back to them because it would be a hardship to pay it.  If the Golf Course can't make it work, then it's time to lease out operations. 

Even if the City were to decide that the money would be better left in the Golf Course's coffers than in the general fund to pay for, oh, public services like the fire department, it still leaves the Golf Course several million dollars short of how much it would cost to revamp the facilities to make it truly competition for the other golf courses in the Bay Area, including the stone's throw away Metropolitian Golf Links near the Oakland Airport.    The Golf Course is going to need some pretty deep pockets within the next few years to bring it up to snuff, were they going to ask the City to fund those improvements out of the general fund?  

While raising the rates might be a good start, there is no indication that folks have come flocking back to play golf in record numbers, and I imagine with the downturn in the economy and the pinch that most folks are feeling in their wallets, the likelihood that there will be an uptick in players to start making a financial difference is pretty slim. 

I guess we'll just have to wait and see what the Master Plan report due from the consultants says in July about the future viability of the Golf Course.

...[G]lobal warming will sink large swaths of Alameda and the Bay Area, according to long-range research on local climate change impacts unveiled by a state official Tuesday.

Both Oakland and San Francisco airports will be underwater in 100 years' time — even under best-case scenarios developed by the San Francisco Bay Conservation and Development Commission...

While scientists weigh the efficacy of constructing storm gates at the Golden Gate, Travis said wetlands restoration and higher density housing are the strongest arrows policy makers have in their quivers. "Tidal wetlands absorb flood waters like a sponge and they remove carbon dioxide from the atmosphere," he said, noting his agency's efforts to return several sprawling South Bay salt ponds into wetlands habitat. "This, more than anything — more than changing light bulbs, more than buying Priuses — is the single biggest thing we can do to stop global warming," Travis said.

...

Travis cited statistics showing that 50 percent of the greenhouse gases emitted in the Bay Area are transportation-related. That compares with 41 percent for California as a whole and 14 percent worldwide. Travis attributed part of Bay Area's larger figure to longer commutes.

...

Travis said he was certain to generate much angry e-mail with his other suggestion: that citizens demand more high-density housing. "The next time there's a public hearing about a housing development, rather than complaining about traffic or views you should be testifying that it's not big enough...

Make sure to take a good long hard look at the map connected to the article, in the caption it says that the majority of the main Island will be unaffected except for the beaches.  While it's clear that all of Oakland Airport will be underwater if this scenario is true, even Chuck Corica Golf Course won't make it either if these predictions are accurate, which means that Earhart School in 2100 will be prime waterfront property.  That should be the golf course's new advertising gimmick, "Golf here today, because it won't be here tomorrow!"   They can give away souvenir galoshes to every 10th customer.

I would have included Will Travis's email address so that the hard core Measure A supporters could write him angry letters about proposing higher density development and how Measure A is "green" enough for Alameda, but the website for his agency is non responsive this morning, so they'll just have to find it themselves.

...Over the past decade, the leisure activity most closely associated with corporate success in America has been in a kind of recession.

The total number of people who play has declined or remained flat each year since 2000, dropping to about 26 million from 30 million, according to the National Golf Foundation and the Sporting Goods Manufacturers Association.

More troubling to golf boosters, the number of people who play 25 times a year or more fell to 4.6 million in 2005 from 6.9 million in 2000, a loss of about a third.

The industry now counts its core players as those who golf eight or more times a year. That number, too, has fallen, but more slowly: to 15 million in 2006 from 17.7 million in 2000, according to the National Golf Foundation.

...golf, a sport of long-term investors — both those who buy the expensive equipment and those who build the princely estates on which it is played — has always seemed to exist in a world above the fray of shifting demographics. Not anymore.

...

Jim Kass, the research director of the National Golf Foundation, an industry group, said the gradual but prolonged slump in golf has defied the adage, “Once a golfer, always a golfer.” About three million golfers quit playing each year, and slightly fewer than that have been picking it up.

...

Surveys sponsored by the foundation have asked players what keeps them away. “The answer is usually economic,” Mr. Kass said. “No time. Two jobs. Real wages not going up. Pensions going away. Corporate cutbacks in country club memberships — all that doom and gloom stuff.”...

Chalk it up to golf being yet another victim of tough economic times.  For most people it probably is an issue of time in addition to the economics.   My husband like to golf, but hasn't golfed in the past six to eight months at least because there simply is not the time.

And I hate to go back and further flog Richard Bangert's follow-up My Word, but one of the points he made at the end of his Devens is Heavens commentary was this:

...A delegation could visit Devens. While in Devens, that delegation could stay at the new Marriott Hotel and Convention Center, play a few rounds of golf at the new 18-hole championship course, and ponder why our golf course/hotel plan is still on the shelf...

We can't get our current golf course up to snuff, trends are showing that the interest in golf is decreasing, not increasing, I personally hope those golf course plans for the Point stay firmly on the shelf.

Convoluted "Decision" by Council on Private Lease for Golf Course

At last night's meeting, the Alameda City Council considered the National Golf Foundation’s Operational Review of the Chuck Corica Golf Complex. The Council was also supposed to make a decision on a recommendation to authorize City staff to begin the process to secure a long-term operator for the golf complex. While the Council did make a decision to have "requests for proposals" prepared for private companies to make offers, it was wrapped with so many strings attached that, in essence, no real decision was made. The problem for a private company proposing a lease is that the Council waffled on whether they want the lease to include the entire complex or just a part or parts of it. Such decisions, which should have been made last night, will have to be brought back to the Council at a future date, with no assurance that the basic issue of leasing the entire golf complex will ever be made.

In actuality,  several decisions were made and considering the strength of the Golf Commission's alternative proposals, plus the entirely generous offer by Lil Arnerich to run the Golf Course for a year gratis, the Council made a wise decisions to weigh all their decisions, but yet set some longer term items into motion.   From the Alameda Journal:

...In a unanimous vote, the council called for a "hybrid" private-public partnership that would manage the facility. The details will come back for discussion before an operator is sought.

Also on Wednesday night, the council unanimously voted to develop a community-based master plan for the complex. It's estimated that a master plan process also would take at least nine months.

"I think we need a master plan regardless of which way we end up going," said Councilwoman Marie Gilmore, referring to the possibility of leasing out the management of the facility.

...

As an alternative on Wednesday night, golf commission chair Jane Sullwold offered a list of about half a dozen improvements that could be done to the complex more inexpensively while improving the overall facility.

...

The council in its first motion voted to further examine the feasibility of the commission's alternatives but in the meantime sought to reduce the amount of money the course has been losing...

So this is what the Council did in a simple numbered list, not in motioned order:

1. Agreed to have City Staff take a look at the Golf Commission's recommendations from that night to see if the recommendations would be able to make the Golf Course appealing to more players, some of the recommendations included leasing out portions of unused land from the Golf Course in order to bring in additional revenue;
2. Have City Staff develop a community-based master plan for the Golf Course, it would be necessary even if the City decided to lease out the operations, but could provide good direction for the City if they decided to retain control of operations;
3. Have City Staff look into current operations at the Golf Course and start cutting the "bloated bureaucracy";
4. Have City Staff begin drawing up a Request for Proposals for possible opertators, one of the reasons why the details will come back to the Council is because it would be a waste of time for the Council to sit up on the dias to hash out language for an RFP.

The sense that I got from watching, or rather listening, to the City Council discussion is that the majority (or even all of them, some council members kept their opinions pretty close to the vest) would rather see the alterative options work prior to leasing out operations to a private operator.   It sounded as though any operater, according to the National Golf Foundation consultants, who would put in the sort of investment necessary to bring the Golf Course up to snuff would probably want a minimum lease agreement of 10 years.   What I appreciated about the Golf Commission's recommendations is that there was clearly a passion for keeping the golf operations within the City, but an acknowledgement that if their recommendations wouldn't make significant difference, they understood that the private operator would be inevitable.

...the golf commission, which has "reluctantly" supported turning over the operations of the complex should the city be unable to commit the $10 million needed to complete needed improvements, primarily to the Jack Clark and Earl Fry courses.

"If you polled the golf commissioners, if they favor turning it over to a private operator or not, they all would say no -- or the majority would say no," Humphreys said Friday. "I don't know why the city has to spend $10 million all at once."

...

That request followed a report released in September by the National Golf Foundation, which found that between 2001 and 2006, the number of rounds played at the complex declined by nearly 73,000 rounds or about 35 percent, while total receipts fell by $1.35 million or about 25 percent.

During the same period, wages and benefits increased by $502,000 or some 27 percent.

...

As of Oct. 31, the complex had $2.1 million in reserves. A recent city report notes that the complex lost $42,000 a month in the first four months of this fiscal year. "Unless changes are made, the decline in reserves will continue until they are exhausted."

Humphreys' letter takes issue with the analysis, saying that the city is draining off money from the course in the form of "payments-in-lieu-of taxes (PILOT), return-on-investment (ROI) and surcharges and other cost allocations.

"These payments are essentially coming out of the course's reserve funds," the letter says, "which will be completely depleted within the next several years if the city insists on continuing such fees."

However, assistant city manager David Brandt on Friday said the course still would be operating in a deficit if the fees were no longer being collected...

While there are certain elements of the two page letter that might be compelling, in the end it's all based on speculation.   Speculation that in five to ten years when more baby boomers retire that they will be drawn to the golf course as though that is their calling in life: to golf.   Speculation that if the Mif Albright course (recommended for closure) was reworked and the practice area was removed then it would be appealing to short course players.  Speculation that if the Golf Course could be released from paying fees to the City that they would be not be bleeding money -- that one was refuted by David Brandt in the Journal article.

Then there is the issue of: "just find the money to fix it and continue running it ourselves" position.   Personally, if there were about $4 million in Rec and Park money to use somewhere I wouldn't put it into the Golf Course.   A lot of parks need some form a maintenance or upgrades and to me, a Golf Course that could be run just as ably by a private company who would expend their own money to make the necessary upgrades, would be so far down the list for needing funds.  $4 million is the number used to just build the banquet facility and upgrade the driving range.  

For me the letter was very, "why can't we keep it the way it is?" A very Alamedan sentiment, I must say.  However, the consultant report was very clear about the what the problems with the golf course are and what it needs in order to draw more players.   The regional competition has much more superior facilities than Chuck Corica and even the lower greens fees can't draw folks to play.   Something needs to be done, and unfortunately, the letter from the Seniors Club simply did not provide a strong enough alternative.