Jim Keegan, managing principal at Golf Convergence, which consults with golf courses throughout the world, said the Forest Creek Golf Club is a "marvelous" asset for the city, but would require several critical repairs to remain functional, as well as more renovations to remain competitive with other courses in the area.
"A golf course requires constant capital investment," Keegan said. "And no significant investment has been made since the course was built [in 1990]."
Keegan said residents are using the course less each year, both in number of players and rounds played per year, because of the course's deteriorating condition.
Making Improvements
Keegan said the firm is recommending three levels of improvements. Critical improvements—which are renovations that need to be done immediately—include repairs to the parking lot, a pump station and a drainage issue at the ninth hole at a total cost of $505,000.
Another critical improvement is to make the course more competitive, which would include fixing bunkers, trimming trees and realigning tees at a total cost of $1,797,500.
"A golf course requires constant capital investment, and no significant investment has been made since the course was built [in 1990]."
– Jim Keegan, managing principal at Golf Convergence
Comprehensive improvements—such as replacing the irrigation systems—include laying new grass, expanding the clubhouse, and redesigning the bunkers at a total cost of $2,860,000. Keegan said comprehensive renovations would also include redesigning some holes, such as making the 18th hole a Par 5.
If the city were to make all recommended improvements, the total cost would be $5,162,500, Keegan said.
In the 2015-16 fiscal year the city budgeted funds for the parking lot improvements and on Nov. 12, council members voted to allocate funds to fix the pump station—both of which are on the critical projects list.
Keegan said if the city does nothing it could ultimately lose more money in the long term because of the declining number of players.
“Golfers make a decision on where to play based on value equals experience minus price,” he said. “The asset they currently have is depreciating, so therefore the experience is going down and the golfers will seek other alternatives.”
Exploring options
Keegan said he does not recommend the city try to manage the golf course internally for a variety of reasons, including payroll issues, he said.
Keegan said the city could not sell the golf course without 50 percent approval from voters. He said a survey showed that 68 percent of resident respondents want to keep course city-owned.
“I’m not confident if you put it out to the general public you would get a 50 percent [vote] to sell," Keegan said.
Keegan recommended a third-party management agreement for the continued operation of the golf course, in which a request for proposal is sent out to select a qualified firm.
Currently, the city has a management contract with CCA Silband/Golfcorp. The current management agreement states the third-party firm only gets paid after all debt on the golf course is serviced.
“That is not competitive in today’s market environment,” Keegan said.
Keegan said to bring in a management company would require payment to the company prior to paying the debt. He said that would likely add about $90,000 to $130,000 in additional expenses over the current agreement.
Moving forward
The city started to evaluate management options for the course last year. In April the city renewed its contract with CCA Silband/Golfcorp and agreed to invest about $1 million in improvements in the course and restructured the debt as well.
The agreement signed in April allowed for an early termination date of Dec. 31, 2016.
The course has not cost the city any money since its initial creation until the April agreement.
Mayor Alan McGraw said after seeing the presentation he thinks council will vote to make the improvements Keegan recommended to keep the course competitive as well as move forward with an agreement that will likely include an agreement to pay the operator before debt is serviced.
To pay for the increased cost of the potential new agreement as well as the improvements, Keegan recommended the rates for playing on the course be increased upon the completion of the renovation, which he said would reflect the improved experience. Keegan recommended an increase of $5 to $8 dollars per round for 18 holes in prime time. In the summertime, a round typically costs $50 dollars, he said.
