Leader Blues

Tuesday, May 15, 2007

TOP STORY >>Sherwood golf course could be profitable facility

By RICK KRON
Leader staff writer

If the owners of the North Hills Country Club drop their price by 70 percent, Sherwood coughs up $2 million-plus and the course averages more than 30,000 rounds of golf over the next seven years at about $30 a round then the golf course could be “an affordable, quality daily fee property” for Sherwood.

This is according to W.P.D. Golf management and Consulting, out of Horseshoe Bay, Texas, which released about 100 pages of its feasibility study earlier this week.

Jim Rodgers with Club Property Inc., the owners of the country club had the property sold last month to businessman and developer Ron Campbell for $5.1 million, but the sale was derailed when the city issued a building moratorium to stop Campbell from turning the 105-acre golf course property into a high-end subdivision of about 190 single-family homes.
Rodgers believes the property is still worth at least $5 million.

The report clearly states, “As a golf course, this project cannot support a purchase price of $5 million. Should the city decide to purchase, we suggest $1.5 million to purchase the course and another $1.3 million for improvements, soft costs and closing costs.”

The study states to buy the facility, make all the necessary repairs and start an aggressive marketing campaign, the city would have to spend $2.7 million before the first customer swings from the first tee. More than likely that money would have to be raised through some sort of sales tax. Bill Dowling, president of W.P.D., in the study, said, “The golf course will provide a needed public recreational facility, create employment opportunities, provide recreation programs for youth and families, preserve open green space and provide quality of life, while supporting local businesses.”

The consultants also hired three other firms to help determine the feasibility of the city buying the country club and operating it as a municipal golf course. Spear Consultants focused on the income, expense, capital needs and purchase scenario (what the city could afford to pay in order to get a profitable return on the investment). Paladin Golf Marketing did a 20-mile-radius market research of golf courses. International Golf Maintenance looked at maintenance issues and the associated costs.

Even though Bowling painted an encouraging picture for the course, the study contained a number of cautions and red flags.
The Paladin report stated that golfing levels at area courses were stagnant or slightly down in 2006. It went on to say that even though Sherwood’s population growth is considered “healthy” and expected to grow at about 4.2 percent, central Arkansas, as a whole, is losing population.

The facility is functional, but in disrepair. In a 100-point survey of the country club facility and the course, North Hills scored a 39 out of 100. The Paladin report said most public or municipal courses score 60 or better. The study expressed concern that one of the three onsite wells used to maintain the greens is collapsing, which means more city water would have to be used.

The club’s swimming pool is one of the oldest in the area and the study suggested rather than repair it, to fill it. Spear Consultants reported that the 15,000-square-foot clubhouse, built in 1962, was in fair condition, and needed painting, interior work and roof repair.

The 1,500-square-foot maintenance building, built in 1960, rated fair, needs repairs and must also be expanded. The 3,000 square-foot cart storage facility was also in fair condition, and more than likely would need to be expanded. The Spear report also said that it would take four years for North Hills to have sufficient cash flow. The study also recommended the city conduct an environmental study. “This should be completed before the city moves forward with a closing,” the report said.

The consultants recommend that if the city buys the course that the course be open 365 days a year from dusk to dawn “to ensure the maximization of course utilization.” Projections indicate that weather would close the course 20 percent of the time.

The city should also hire a professional golf-management firm to run the course initially and have that company work with the parks and recreation department to transition the city into full-time operators of the course, the study said. W.P.D. suggests that a PGA golf professional with at least five years’ experience in managing a daily-fee golf course be hired to run the day-to-day operations of the course.

The consultants also recommend hiring a golf course superintendent, a director of marketing, a food and beverage manger, all on salary, plus an assistant golf course superintendent, an equipment mechanic and an accountant. International Golf Maintenance placed the annual budget for staffing the course properly at almost $285,000. It also said the annual maintenance budget would be about $424,000.