February 2014 - Parks & Recreation - 68

Operations
Municipal Golf - What's the Best
Management Path? (Part Two)
By Larry Hirsh

n Part One of this series on municipal golf management strategies, we concluded by establishing this fact: Today, regardless of how golf operations
were viewed in the past, municipalities are seeking to maximize financial
performance and compete with an oversupply of competitive golf properties.
Today, there is additional political pressure to ensure that municipal golf
courses do indeed represent the " highest and best use " of publicly owned land.
That's really where municipal golf
finds itself in 2014. With privately held
golf courses being shuttered in record
numbers, and still more competition for
golfers than ever before (an amazing irony), it's only natural that municipalities
are looking at their golf operations with
greater scrutiny. Indeed, privately held
golf courses are closing their doors because those owners have assessed what
the highest and best use is for those
properties, and they've decided (in some
cases) it's not golf! In other cases, it is
golf - only with more
prudent management or proper
market positioning.

Parks & Recreation

A decision on how and who should
manage municipal golf facilities is not
so simple. It must be carefully weighed,
because while municipalities have
options, there is no single way that is
right for every facility. Each individual
community has its own goals and objectives. Each individual golf market is
different. Only when all these factors
have been soberly and independently
assessed - and reckoned in terms of
the finances, the market and existing
personnel skills - can an appropriate
and effective decision be made.
In the first installment of this series,
we looked at the pros and cons of two
" in-house " management options:
1. Direct Management: Whereby the
city engages its existing employees
to manage the entire golf course operation, usually as part of the park
and/or recreation department.
2. Indirect Management: Whereby
the city hires experienced golf industry professionals (also, typically, as part of a park/rec department
budget) to operate the golf course
and report to the city manager.
Here in Part II, we will discuss the
two major " outsource " options:
3. Private Management: Whereby
the municipality retains a third-par-

| F E B R UA R Y 2 0 1 4 | W W W. N R PA . O R G

ty, private management firm on a
contract basis for an extended period (three years or more). In these
cases, the third party and the municipality share revenues and costs,
though often the third-party manager has revenue incentives built in.
4. Lease to Private Firm: Whereby
the right to operate the golf course is
leased entirely to a private firm or individual, which/who retains all the
revenues and is responsible for the
operating expenses in return for a
rental payment, which often includes
performance percentage rents.
Private Third-Party Management
This option has become very popular
in recent years and has been an area of
growth in the golf industry as many
golf management firms add management contracts to their portfolios.
Many municipalities have concluded
that they need professional assistance
to achieve revenue optimization, and
there are a number of substantial and
qualified firms in the marketplace
seeking such assignments. The primary benefits of engaging a management firm - along with their high
level of expertise and the number of
experienced personnel in various disciplines - have been summarized by
the National Golf Foundation, which
recently concluded the following in
response to this question: Why hire a
golf management company?
Personnel Policies: One of the
most glaring areas separating mu-

February 2014 - Parks & Recreation

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