The Pellucid Perspective - November 2012 - (Page 5)

GOLF COURSE DEVELOPMENT A tale of two cities By Jim Dunlap Cities choose different visions for golf — how that’s turned out so far hey are less than five miles apart, both are within sight of the Pacific Ocean in San Diego’s North County, battle for basically the exact same customers at very similar pricing, and for all practical purposes, were developed as municipal courses within the last 14 years. If such a thing as a French golf operations analyst exists, however, he or she would undoubtedly say “Vive la difference.” The two courses in question are Encinitas Ranch Golf Course in Encinitas, Calif., opened in 1998, and The Crossings at Carlsbad in (surprise) Carlsbad, opened in 2007. The Encinitas course, designed by architect Cary Bickler and developed at a cost of $10.7 million, is not technically a municipal course, since it is governed by a specially created Encinitas Ranch Golf Authority (ERGA) Board separate from the city, which retains course revenues and is responsible for the original $10.7 million development bond for the course’s first 30 years of operation, at which time revenues will be shared between the city and the original developer, Carltas Companies. The course’s day-to-day operations are run by San Diego-based JC Resorts, reporting to the ERGA Board. The Crossings at Carlsbad, on the other hand, is a municipal course, although it is definitely not your grandfather’s muni in terms of site, layout, clubhouse … or development cost. During 20-plus years of political wrangling and threatened or actual litigation from virtually every environmental group short of Green Peace, necessitating two dozen or more different routing plans from beleaguered course architect Greg Nash, the total cost of the facility eventually escalated to an estimated $63 million, which is almost certainly a record for a municipal golf course. The Crossings has been operated since its opening by national course management firm KemperSports, which is in the final days of its initial five-year management contract, and was among a number of other operators responding last week to an RFP for the next course management contract. Despite their proximity and their similar rate structures which provide incremental breaks to area residents ($69-$75 in weekend peak time), the results to date in terms of rounds and golf revenues have differed significantly, although in fairness, it should be pointed out that Encinitas Ranch has had nine more T years to build a following. It has also doubtless benefited from its inclusion in the JC Resorts/JC Golf Players Card program, which includes free plays and discounts at five additional San Diego area courses in addition to Encinitas Ranch. The raw numbers for the two are as follows: In the 2011 fiscal year, Encinitas Ranch did 55,441 rounds, generating golf revenues of just over $3.7 million; The Crossings did just under 46,000 rounds during the same period, grossing nearly $3 million in golf revenues. At The Crossings, however, golf revenues currently share center stage with the facility’s spectacular clubhouse, perched high on a hill with scenic ocean vistas, which does a consistently booming business in civic and social events, and does about $3 million in food and beverage revenues of its own. (The clubhouse has so many events that The Crossings took a chunk out of its spacious pro shop to create a dedicated Player’s Lounge with its own bar and food service to accommodate players after their rounds). The central contrasts between the two facilities essentially come down to two issues – economics and playability. While it seems likely that ERGA will pay off its original bond at Encinitas Ranch within the foreseeable future, it’s equally unlikely that my Baby Boomer generation will see the original bond paid off at The Crossings. Carlsbad Mayor Matt Hall, a long-time supporter of the project during his 16 years as a City Council member and the last two years as Mayor, said that the city’s General Fund has been subsidizing The Crossings’ operation to the tune of $700,000 to $800,000 per year to help pay down on the original bond note, but he is hopeful that by the time the course has been open 10 years, it will be breaking even. At Encinitas Ranch, by contrast, the ERGA Board has never had to reach out to the city for financial support. The original development cost, of course, has little to do with the amount of play that the two courses attract today. Both ERGA Board Chairman Bill Dean and Mayor Hall admit that the two entities had two different visions for their courses. “One of the issues that has been paramount to our success is that we provide golfers a hopefully positive experience and a chance to shoot a good score,” Dean said. “We don’t have a lot of the hazards and the difficulty associated with The Crossings.” The original development cost, of course, has little to do with the amount of play that the two courses attract today. Both ERGA Board Chairman Bill Dean and Mayor Hall admit that the two entities had two different visions for their courses. www.PellucidcorP.com The Pellucid PersPecTive 5 http://WWW.PELLUCIDCORP.COM

Table of Contents for the Digital Edition of The Pellucid Perspective - November 2012

The Pellucid Perspective - November 2012
Table of Contents
Are you missing your calling?
A tale of two cities
Debit or credit? Save either way
Tucson municipal courses at risk
Economy, discounting pressure challenge Tucson market
October golf weather impact: Giving back some of our season gains
TopGolf proposal for takeover of El Segundo range operation encounters opposition
4 more years – wither goeth golf?

The Pellucid Perspective - November 2012