End of the ‘Tiger effect’ leaves cities holding the golf bag

Back in the boom times of the ’90s, the golf explosion brought on by Tiger Woods was too good to be true for many suburbs.

Home developers built golf courses so they could sell homes on a golf course at a premium, then “gave” the courses to cities in exchange for zoning approval. The cities operated the municipal courses.

It was a great deal for everyone until people stopped golfing.

Watchdog Minnesota reports its survey of some communities in Minnesota has turned up large operating losses this year, even in cities where the home-developer scheme wasn’t part of the mix.

Many municipal golf courses already rely on local tax revenue to subsidize annual losses. The City of Chaska, for example, lost about $270,000 operating two courses in 2012.

This year, several courses report larger than usual operating deficits. With less revenue and the normal level of expenses, there’s concerns that taxpayer subsidies at the end of the season could run higher than before.

“I would say we were $300,000 down June 5,” said Paul Schintz, director of golf for Duluth. “We did catch up a little bit but there’s no way to catch that number of 300 grand in revenue from last year.”

The number of players on Duluth’s two city courses will likely decline 10-15 percent from the 85,000 that checked in with starters last year.

“It’s been a tough one, yeah,” Schintz said.

Total rounds golfed at St. Paul’s four city courses showed an even greater swing, down by a third at the end of June from 54,400 in 2012 to 35,700 in 2013. With expenses exceeding $2 million offset by just under $1.2 million in green fees and other revenue, city losses would result in a taxpayer subsidy of $877,000 if the season had ended in June.

The problem isn’t a “Minnesota thing.”

In Iowa, taxpayers are pouring hundreds of thousands of dollars into keeping the city golf courses alive around Cedar Rapids. In Des Moines, however, the city has privatized the courses.

“Cities from all over the Midwest are calling us,” Ben Page, Des Moines’ parks director tells the Cedar Rapids Gazette. He said the city was losing hundreds of thousands of dollars before cashing out. This year, he says, the city got a check for $600,000 from the private firm that now runs the courses.

(h/t: Sara Meyer)

  • MrE85
    • A bond of more than $800,000 paid for by revenue at the course. I wonder what the revenue projections for the course are and whether they reflect the reality of golf’s declining popularity?

  • twincitiesgolfer

    Most of the green fees and cart fees leave you feel liked you have just been raped! Lower your prices, They will come!

  • kevinfromminneapolis

    I still haven’t found the part where it’s government’s job to provide me the chance to play a round of golf.

    • The government’s JOB? I don’t know, but it seems to me people have generally accepted it’s the government’s (and its people) choice to provide parks, or boat launches etc.

      Clearly someone decided there’s an interest in providing recreational options for citizens of particular cities that choose to have them.

      It costs money to maintain parks, too. But in those cases, the people who use them don’t pay the user fees that golfers do.

      • kevinfromminneapolis

        I dont’ really see parks and golf courses as the same. There are plenty of public and private options for people to play golf but few (any?) private parks and trails.

        • Keep the times in mind. in the ’90s, you had people actually sleeping in their cars at county and city courses so they could be first in line just to RESERVE a tee time. So the cities/counties were, I presume, thinking they filling a niche because there weren’t enough options for people who wanted to play golf. The average person couldn’t join a private club for the privilege.

          Presumably at the time, they ran the numbers to see if it would make sense, they just didn’t forecast that people would literally walk away from the sport and the numbers wouldnj’t work anymore.

          What is the government’s responsibility to provide access to recreational opportunities? Good question.

  • Meghan

    Wouldn’t the fact that winter lasted well into April have an effect on revenue this year?

    • That’s part of it in the short term but in the long term, golf seasons have gone well into December because of the warm weather, and many communities are still losing money.