Tax money used to prop up golf courses

A Dayton Daily News analysis of area municipalities show all but one loses money.


John R. Osborne doesn’t play golf. But as a Beavercreek taxpayer, he helped pay for others to tee up last year.

That’s because the city brought in $1.1 million less in revenue last year than it spent for the operation and debt of its municipal golf course. That’s an average $25 per Beavercreek resident — golfer and nongolfer alike.

“I’m 71-years-old and I’ve been taxed to death,” he said. “If people want to play golf, let them pay the taxes.”

Though Beavercreek’s golf facilities operate at one of the largest deficits locally, it and its taxpayers are not alone.

A Dayton Daily News analysis of golf operations in 13 area cities found only one — the city of Dayton’s — made money in 2010. The rest ran a deficit when operations and debt are taken together.

Overall, golf courses in the region are struggling; there are too few golfers and too many courses, according to many observers. And this year, with a spring marked by soggy greens giving way to a scorching summer, local officials worry 2011 could be even costlier.

For city or park district courses, that means taxpayers often end up making up the difference.

“We’ll never bring in enough revenue to cover the debt service,” said Steve Klick, operations manager of the Beavercreek Golf Club. He said the debt won’t be paid off till 2023.

Klick said the $234,514 operating deficit the course ran last year in addition to the debt was driven largely by investing in the course. “I think this city definitely values putting money back into the facility,” he said.

Klick said the 18-plus inches of rain that fell on the courses this spring didn’t start the year off well.

“You factor in that and gas at $3.99 a gallon, a lot of people are choosing to do other things with their disposable income,” he said.

Mason’s city-owned Golf Center at Kings Island cost that city more than $1.2 million last year.

It has run at a massive deficit since the city bought the course — including the 18-hole PGA course dubbed the Grizzly, designed by Jack Nicklaus — for $9 million in 2006.

Debt strains public courses

Altogether, the 18 municipal facilities in Butler, Clark, Greene, Montgomery, Warren and Miami counties took in $4.1 million less in revenue than they spent on operations and debt.

The only public golf operation that ran in the black was Dayton’s. Its three golf complexes — Community, Madden and Kittyhawk — netted a profit in 2010 of $168,963.

Many other courses were profitable operationally, but were dragged down by debt.

Centerville’s Yankee Trace Golf Course took in $444,497 more than was spent running the course in 2010. But the facility still owes $10.5 million from building the course, debt which cost the city $818,613 last year.

Older facilities not saddled with debt rarely do better than break even.

Cassel Hills Golf Course in Vandalia, which opened in 1974, runs at a deficit of about $50,000. The city transferred $500,000 from the general fund into the golf fund in 2007 to help cover its annual deficit.

This is done to keep the greens fees in line with other area courses, said Vandalia Assistant Finance Director Kathleen Cornett.

“(City council is) aware that this business decision could result in the general fund subsidizing the deficit, but their overall goal is to provide this public service to the Vandalia residents at a reasonable rate,” she said.

Private courses struggle

Steve Jurick, executive director of the Miami Valley Golf Association, sees publicly owned golf courses as community assets.

But with taxpayer funding, low-interest borrowing power and no property taxes, these facilities make it harder for private courses to compete, Jurick said.

“It artificially lowers the price of golf to some extent,” he said. “I would assume in the not too distant future you’ll see some golf courses go back to farms.”

All this comes at a time when the popularity of golf is “depressed,” Jurick said.

He said the recession — golf takes time and money, both of which are at a premium right now — and declining local population are taking a toll.

“Twenty years ago when we were building a lot of golf courses, it was because our population was spiking and people had more leisure time,” he said. “Now we have less leisure time and people are playing fewer rounds and we have less people.”

This has left the region with an embarrassment of riches in terms of golf courses.

A 2008 analysis by the MVGA found Montgomery and neighboring counties had a combined 87 golf courses boasting 1,611 holes of golf.

Mason Finance Director Joe Reigelsperger said municipal courses are feeling this pinch.

“I think the problem is a combination of the recession as well as market saturation,” Reigelsperger said.

“There are so many golf courses out there I think they’re fighting over fewer customers at this point.”

This has its upside, Jurick said: “It’s a great time to be a golfer right now.”

Residents’ opinion mixed

As she prepped to practice her drive at Beavercreek Golf Club on Monday, Stacie O’Brien said that municipal golf courses make the sport accessible to the public.

“It makes it affordable for all the people who can’t be country club members,” the Fairborn resident said.

She said the $45 fee Beavercreek charges is about all she can afford.

A few miles away at the Beavercreek post office, though, opinions were mixed. “It should be self-supporting, or turned over to private enterprise,” said Don Meyer, a golfer. “Why is the government in the business of subsidizing a sports facility?”

Profit only one motive

Motivations for cities going into the golf business have long extended beyond profit.

Mason — which subsidizes golf more than any local community — bought the course at Kings Island to keep the former owner from selling off the land for high-density condo development, according to local officials.

“It was primarily as far as being able to see the future development of that property, not necessarily to operate the golf course,” Reigelsperger said.

But in the process it locked in a deal with a management company that keeps the city from cutting costs. The company spent $2.8 million operating the facility, which only brought in $2.1 million last year.

That contract expires this year. But the debt incurred when the city bought the course won’t be paid off for years to come. That debt payment cost the city $525,000 last year.

Miamisburg Finance Director George Perrine said the Pipestone Golf Club was always seen as more of a catalyst for surrounding upscale development than as a money-maker.

“City council members over the years feel it’s been a worthwhile development,” he said.

The course costs the city about $250,000 a year in debt payments, despite running a profit with its day-to-day operations. The debt won’t be paid off until 2021.

One city making a profit

This spring’s soaking rain cost the city of Dayton’s three golf courses an estimated $200,000, according to Joe Parlette, golf manager for Dayton’s department of parks and recreation.

The city’s three golf courses have been in the black since 2005, which was the last year it had to go to the city general fund for a handout. They profited $168,963 last year.

Parlette said decreased revenue may force him to put off improvements to parking lots and cart paths. He’s still optimistic, with an eye toward the heavens.

“Weather, far more than any other factor, dictates our revenue,” he said. “Barring a summer similar to 2010, I am confident that we will be able to finish in the black.”

That summer — like recent weather — was hot. Parlette said any day with temperatures higher than 88 degrees costs the city’s courses 7 percent less in casual play.

The golf courses do not all receive equal play. Madden, plagued by perception problems from being built on wastewater treatment property, is subsidized by the other two courses.

“It’s my favorite track as a golfer, so the only issue at hand is public misconception,” Parlette said.

There is no discussion of the city selling any golf courses, Parlette said, partly because land use and deed issues make the courses “a clever reuse of existing property,” he said, but primarily because they are valuable tools.

“We see our courses as developmental assets,” Parlette said. “Forming a triangle around the city of Dayton and within Montgomery County, our facilities peak the interest of businesses and residents.”

Contact Josh Sweigart at (937) 328-0374.

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