Archive for Saturday, August 6, 2005

Ongoing liability

The financial picture of Lawrence’s city-owned golf course certainly hasn’t measured up to projections.

August 6, 2005

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It shouldn't come as any major surprise that city taxpayers are likely to be subsidizing the city's Eagle Bend Golf Course for years to come.

The 18-hole course, located just east of Clinton Dam, has been losing money every year since it opened in 1998, with the possible exception of a brief period immediately after it opened when it may have been covering expenses.

The fact is a relatively small number of local golfers complained about a lack of golf facilities in Lawrence. They didn't like paying the greens fees required at Alvamar's public courses or the membership fees for private courses at Alvamar and Lawrence Country Club. They said many local people were traveling out of town to play golf and they wanted a city-owned course where greens fees would be under $10 for nine holes.

City officials bought the idea and hired a consultant. As might be expected, the consultants told city officials what they wanted to hear: that the course would pay for itself within a year of operation. They also talked about sustaining approximately 44,000 rounds of golf per year.

For whatever reason, these rosy projections have fallen flat. The number of rounds is far short of what was predicted, and the cost of playing the course continues to rise.

The poor fiscal performance, as well as the low number of players, shows up even though the land on which the course is located is free - a long-term loan from the U.S. Army Corps of Engineers. The course also pays no property taxes and no fees for the city water to maintain the grass. All of these are huge costs for a privately owned course and should make it fairly easy - with even moderate demand and usage - for the course to at least break even.

When a city-owned facility was being considered, there were knowledgeable and experienced golf course owners or managers who urged city officials to go slow and be cautious about a city course. They didn't listen to the advice, and their determination to build the course played a major role in a private, tax-paying developer's decision to cancel plans to build another course in Lawrence.

Eagle Bend is an attractive course, although far easier than either the Alvamar or Lawrence Country Club courses. It provides a nice city-owned and operated recreational facility, and it can be used to attract various golf tournaments. But it will continue to be a financial drag on the city, even with the many perks it enjoys. As Lawrence Mayor Boog Highberger noted, the city has an obligation to pay $320,000 a year in bond payments through 2016, related to the construction of the course.

Maybe city officials should visit with the consultants who indicated the course was a marvelous idea and ask them what can be done to turn the financially losing facility into a profitable operation. One wonders what their fee would be for this service and how much weight should be given to their findings, considering how far off they were with their original projections.

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