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Sarasota Thursday, Sep. 22, 2016 5 years ago

A sensible path for Bobby Jones Golf Club

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Private management is the right course for the city’s Bobby Jones Golf Club.
by: Adrian Moore Contributor

I play golf, and the hardest thing about playing in Sarasota, after dealing with the heat, is deciding which of the many golf courses in the area to play. The city-owned Bobby Jones Golf Club is never near the top of the list. It is what one of my golf buddies calls a dog — a course in lousy condition.

The Bobby Jones Club has been in decline for years now. As the physical condition of the clubhouse, fairways and greens has declined, so have the finances. Over the last four years the Club has lost an estimated $1.3 million and consumed all of its reserves. And the citizen’s committee advising the City Commission on what to do with the club says up to $14.5 million needs to be invested to bring the course up to good condition.

Past attempts to fund course improvements haven’t worked. When Sarasota voters approved a 1-cent sales tax hike in 2007, $1.5 million of that money was slated to improve the clubhouse at Bobby Jones. Since then, that amount has reduced to $1.1 million, and city staff wants to reallocate nearly half of that money to making repairs on the course and paying for a master plan for the Club. 

So the proposal on the table right now is for the city to divert millions of dollars from other, much-needed parts of the budget (like paying for city worker pensions, homeless services or public safety) to try to bring the Bobby Jones Club back from the brink. And after that, the course may still lose money every year due to all the surrounding competition. Sounds like a gamble and a bad deal for city taxpayers.

The good news is that there is a sensible alternative. Few if any cities are opening new municipal golf courses; rather, recent years have seen dozens of city-owned courses turned over to private management and turned from money losers into money makers.

 

A Private Bobby Jones Course?

All the city needs to do is put out a request for proposals for private golf companies (there are many) to make offers for what they could do if they manage Bobby Jones. Basically, the private company would agree to take over managing the course for a certain number of years, agree to make capital investments to improve the course, and pay the city either a fixed fee, share of the net revenue, or some other structured payment.

What this does is let a company that runs golf courses all over the nation, and makes money with them, invest its money in the improvements, rather than gambling taxpayer dollars. They would do the marketing to bring in more golfers and reap the rewards if they succeed, but also bear the costs if they fail. This kind of arrangement puts the risk of success or failure on the private firm, where it belongs, not on city taxpayers. But the city retains ownership of the course and control of rates and policies through the contract.

And the best thing is, if the city puts out an RFP and no company thinks it can make a winner of the Bobby Jones Club, or none of the offers are a good deal for the city, well, we are no worse off than we are today. In this way, seeing whether private golf managers, who run golf courses for profit, are interested in managing Bobby Jones tests whether it’s worth rehabilitating at all. That would give us more food for thought on the wisdom of investing tax dollars in trying to bring the Club back. 

In 2002, Chicago’s Cook County owned a golf course that for nearly a decade was losing money, had fewer players, deteriorating course conditions and rising customer complaints. Hmm. Sound familiar? The county brought in a private company to take over the golf course, which rebuilt and refurbished facilities and the course, brought in staff, replaced old equipment and carts, and turned the course around. The county went from losing $2 million per year on the course to an annual profit ranging between $800,000 to $1.5 million.  

Two years ago, Phoenix approved a 30-year lease of the city-owned Maryvale Municipal Golf Course, which had run up millions of dollars in deficits over years, draining over $250,000 out of the general fund each year. Facilities had fallen into grave disrepair. Again, this sounds very familiar. The new private managers took on all operating costs and invested $8 million for course repairs and an upgraded clubhouse, and it will pay the city of Phoenix 10% of net revenues after it recoups its upfront investment. This arrangement worked so well Phoenix went on to privatize six other city-owned golf courses. 

The choice seems clear. City leaders can gamble that spending millions of taxpayer dollars on the Bobby Jones Club will turn things around, even though the same people will be running it the same way that has been losing golfers and money for years. Or they can bring in new management willing to bet its own money that they can turn the club into a winner for itself and the city of Sarasota.

The second option, obviously, is potentially better and should be tried before pumping more tax dollars into the course. 

 

Adrian Moore, Ph.D., is vice president of Reason Foundation, co-author of the book “Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century,” and lives in Sarasota.

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