Just yesterday it seemed that golf would finally catapult from hobby to national pastime enjoyed by all, with the era of Tiger Woods inspiring youngsters to take up the clubs and start swinging. Times change, however, and the popularity of the sport has dropped as dramatically as it rose, leaving owners of golf courses — many of which are owned by local cities and counties — scrambling to come up with solutions to rising costs and declining revenues.
The enormous courses needed to play the sport, some 18-hole, some nine-hole, have come under scrutiny as dwindling usage, infrastructure in need of repair and collected debt increasingly become unavoidable issues. These problems and their long-term sustainability are certainly questions of concern for courses throughout Ventura County. With the exception of courses owned by the County of Ventura, golf courses in Ventura and Oxnard face an uncertain future as officials consider whether or not municipal golf courses should continue to receive support at the city level.
IN THE ROUGH
On Monday, June 5, at the regular Ventura City Council meeting, members voted 4-3 to explore ways in which to change Ventura’s municipal golf courses — Olivas Links and Buenaventura – that could include developing part or all of the former and/or a portion of unused land on the latter.
The reason: The golf courses were once self-efficient, operated as enterprises, but over a decade ago, an injection of $16 million into the two for renovations came just as, nationally, a drop in attendance and weak economy struck the sport. Further, saturation in the golf course market increased competition from other area courses. Thus, the greens have produced a debt burden rather than a boon.
Since 2008, city taxpayers have sunk $5.7 million into the two courses, with another estimated $1.1 million on the way this year.
In Oxnard, the River Ridge Golf Club and its two greens, Victoria Lakes and the Vineyard, netted revenue totaling $446,761 in fiscal year 2015-2016, much lower than anticipated, as the city’s budget in the same year expected to generate $776,000 from the courses.
At the county level, management and costs are significantly different: three courses owned by Ventura County are operated as other county parks, with private operators paying rent to operate the courses. With the exception of an injection of funds to cover the cost of repairs — up to $250,000 — the county is the only agency not facing significant and imminent debt concerns.
They do all share one thing in common: The popularity of golf as a sport is on the decline, dramatically so, leaving future management of the courses in question.
Reported in a 2014 Time magazine article, “Fore! No, Make That Five! 5 Reasons Golf Is in a Hole,” more 18-hole golf courses will and have been closing than will be opening for the near future (analysis from the National Golf Association shows that while 13 courses opened in 2012, 154 closed). On the other hand, nine-hole courses have seen an increase in popularity from 2011-2016, as reported in “Playing golf has gone the way of the three-martini lunch,” by MarketWatch.
CITY OF VENTURA
The city of Ventura owns and operates two golf courses: Buenaventura Golf Course and Olivas Links.
Ventura’s Parks, Recreation and Community Partnerships director, Finance and Technology Department director and the City Manager’s Office presented an administrative report to the City Council on Monday, June 5, that outlined in great detail the cost of running golf courses in the city, as well as the attached infrastructure, including banquet halls and clubhouses. In the near future, several issues, including an increases in the minimum wage, will increase the cost for the city, as outlined by the report. California’s minimum wage law will raise wages from $10 per hour to $15 per hour by 2022, resulting in “additional annual operating expenses of about $25,000 at each course over the next five years.” The debt service payments, however, remains the city’s biggest burden with the courses, as outlined below.
“Depending on how the city chooses to treat the golf courses, either as an enterprise or more similar to the way it treats all other recreational uses and amenities, a decision needs to be made on the value of the golf courses to the community,” the report reads. “The question then becomes, are the courses providing enough benefit to justify the costs they require?”
City Manager Mark Watkins says that the current plan is to build a fund in anticipation of the increased debt service payments coming in 2025, and that part of the Buenaventura course will be under consideration as a site for a new water treatment facility.
“It comes down to a judgment call: Do we think we’re getting enough rounds and providing enough service for the cost? I would say, ‘Yes,’ ” said Watkins.
Buenaventura Golf Course
Originally Opened: 1931
Originally opened: 1967
Lessee: Kemper Sports Management
For both courses
Current active annual memberships: Around 800
Total rounds played fiscal year 2001-2002: 81,230/84,260
Total rounds played fiscal year 2015-2016: 60,780/60,555
Cost of recent renovations and remodeling:
Buenaventura, 2004-2005, totaled $6.38 million;
Olivas Links, 2006-2007, $10.28 million.
Debt: $17.7 million
*millions rounded up to nearest ten-thousand
FY 2015-2016 income:
Total gross revenue: $4.78 million*
Total operating expenses: $3.01 million*
Net income: $1.78 million* (includes $116,000 for Wedgewood Banquet rentals)
FY 2015-2016 other expenses:
Cart/equipment leases: $218,000
Trailers/other leases: $92,800
Land lease: $215,000
Debt service: $1.11 million*
Total other expenses: $2.26 million*
Net cash flow (operating subsidy): negative $548,000, the deficit the city covered
Fixed annual debt service: $480,000 annually through 2025, afterwards, increasing to $2 million per year through 2038.
The report notes that “the annual subsidy is projected to decrease from $548,000 to an average of about $200,000-$300,000 per year over the next five years” but that there is “no immediate way to significantly reduce further, or eliminate, the subsidy.”
To read the report in full, visit www.cityofventura.ca.gov/DocumentCenter/View/8482.
CITY OF OXNARD
River Ridge Golf Club is the only municipal course in Oxnard, sitting on a large swath of land along the west end. In 2016, a fire destroyed the clubhouse, which has been rebuilt. With declining attendance affecting revenue, the city could see increased burden over the next few years, should the trend continue.
Art Gutierrez with the city of Oxnard says that fiscal year 2013-2014 was the best year in terms of rounds played and revenue, but that fiscal year 2015-2016 was the worst since opening all 36 holes.
City Manager Greg Nyhoff could not be reached for comment.
River Ridge Golf Club
Two 18-hole courses: The Vineyard Course and Victoria Lakes Course
Originally opened: 1986
Lessee: High Tide & Green Grass
*millions rounded up to nearest ten-thousand
Initial cost to the city: Bonds in the amount of $11.89* million for the first 18-hole course
Total rounds played in fiscal year 2015-2016: 86,016 (down from 96,373 in 2013-2014).
Average over last seven years: 91,515
FY 2015-2016 revenue versus expenses:
Total gross revenue: $4.1* million
Total operating expenses: $3.65* million
Net income: $446,761
Revenue for city:
Projected fiscal year 2016-2017, $776,000, based on previous year’s estimate that has since fallen short
Proposed for FY 2017-2018, $494,000
The County of Ventura owns three golf courses: Saticoy Golf Course, Soule Park Golf Course (Ojai), and Rustic Canyon Golf Course (Moorpark). Rather than the county government operating the courses, the county has active leases with three separate private management firms, which pay the county rental fees. The only cost to the County in regard to these courses, according to Greg Berman, General Services Agency deputy director, came over the last year and a half. The County was forced to undergo upgrades and renovations to Soule Park Golf Course, at a cost of $225,000 to $250,000, before reworking a lease with the management firm that places the burden of repairs on the lessee.
Saticoy Golf Course
Originally Opened: 1921
Lessee: American Golf Corp.
Rounds played in 2016: 44,255 (down 4 percent from 2015).
Rent received by county in 2016: $103,254 (increase of $6,000 from 2015)
Rustic Canyon Golf Course (Moorpark)
Originally opened: 2002
Lessee: Highlands Golf
Rounds played in 2016: 47,741 (down 5.8 percent from 2015)
Rent received by county in 2016: $235,758 (decrease of $18,000 from 2015)
Soule Park Golf Course
Originally opened: 1962
1999-2004: Daily Golf Mgmt.
2005-2013: Highlands Golf
2014-June 30, 2017: York Golf Mgt.
July 1, 2017: Golf Ojai, LLC
Rounds played in 2016: 36,440 (down 5.3 percent from 2015)
Rent received by county in 2016: $208,827 (down $31,000 from 2015)
County investment for renovations: $225,000-250,000.