Tucson’s golf courses are still in the red despite attempts to reverse the golf program’s fortunes by hiring an outside private manager.
The five courses lost $688,000 combined last fiscal year, which ended June 30.
From July through September, play dropped 17 percent from the same period a year ago, with overall golf revenues $1.1 million below expenses.
With golf’s numbers still down, some city officials say it’s time to start discussing options, which could include selling or eliminating struggling courses to remove the strain golf places on the city’s budget.
If that is inevitable, sooner is better than later, they say.
In February, the city turned over management of its struggling courses to Scottsdale-based OB Sports Golf Management.
By most accounts, the company has improved the municipal golf experience in Tucson.
Improved fairways, new golf carts and upgraded food and beverage services have replaced years of neglect and substandard amenities.
“They’ve improved the condition of the golf courses. They’ve improved the experience. Everybody I’ve spoken with has been positive,” said city Finance Director Silvia Amparano.
City officials expect additional upgrades planned by the company will enhance play even further.
But manicured fairways and clubhouse flat-screen televisions likely won’t reverse a nationwide trend of people, especially younger adults, turning away from the sport.
Annual golfers have dropped from their peak in the early 2000s of about 30 million golfers to about 25 million in 2013.
Although a National Golf Foundation study predicted the number of golfers will grow between 2010 and 2020, the change will be negligible.
The average number of golfers per course might rise between 150 and 200 golfers during that time, the study said.
Larger changes could occur within individual markets depending on how many courses shut down or switch from private to public courses.
Nationwide, the study expected between 500 and 1,000 fewer courses by 2020.
Tucson expected its courses to net around $600,000 in fiscal year 2014. Instead, they lost $688,000 — a $1.2 million budgetary swing. Golf rounds dropped 3.7 percent from the previous fiscal year.
OB Sports assumed control in February and operated the courses for only five months last fiscal year. But early numbers for this year show golf rounds continue to plummet.
Last year 51,588 rounds were played on city courses between July and September. During that same time period this year, 42,620 rounds have been played.
Amparano said that number will fluctuate throughout the year as golf hits its peak months and asset depreciation is factored in.
Golf’s overall debt owed to the city’s general fund sits at $9 million as of October 31.
Even though numbers are down, OB Sports Chief Operating Officer Phil Green said word is spreading that Tucson’s municipal courses are on the upswing.
“It will take a little bit of time for the reputation of the golf courses to repair themselves,” Green said. “Golf is such a strong word of mouth business that poor reputations last for a long time.”
In Tucson, over three dozen courses across the metro area vie for a smaller slice of golfers.
“We’re starting to see some improvements in the activity, but the industry itself is still lagging behind where it once was,” Green said.
Compounding matters, Sewailo Golf Club opened at Casino del Sol while a handful of other courses, such as Arizona National, reopened over the past year, he said.
“So there’s more inventory and that makes it a little more competitive,” he said.
But if golfers’ opinions are any indication, numbers should improve, Green said.
“The comments we are receiving are extremely positive about the course conditions, the service level and the overall improvements that have been made,” Green said. “So we feel very good about the future and things are getting much better.”
NOT MUCH TIME
With ballooning pension costs, crumbling streets, and little money to pay for it all, some city officials are questioning whether subsidizing golf should remain a priority.
“It’s time for mayor and council and the community to come together and discuss our priorities,” said Councilwoman Regina Romero. “The sooner this conversation happens the better. It doesn’t mean we have to close golf courses. But we have roads and parks and a million other needs we have to pay for. Do we make golf one of those priorities?”
In the late 1960s, the city maintained municipal golf courses as a low cost option for folks who couldn’t afford the fees charged at private courses, and golf revenues matched or exceeded its expenses, Romero said.
But those days are gone.
“It’s not paying for itself and hasn’t for years,” she said. “The status quo isn’t working.”
Councilman Steve Kozachik said the company deserves a fair shot, but the city can’t wait too long before making changes.
“I want to be totally fair to OB Sports and give them time to turn things around, but they’re on a fiscal short leash,” Kozachik said.
If revenues don’t pick up, Kozachik said the city will have to look at how to cut its losses so tax dollars aren’t siphoned from other departments to keep golf running.
But not everyone’s preparing to pull the plug.
“We’re only in the first quarter of the first full fiscal year for OB Sports,” said Councilman Paul Cunningham. “Let’s not start sounding the alarms just yet.”
Cunningham said the council should at least wait until the end of this fiscal year before taking any actions.
“If we have oversaturation, we have to take a look at the market and what’s our share,” he said. “But let’s not start sounding the alarms just yet.”
Shutting down or converting courses to other uses, such as parks, come with added costs as well, Cunningham said.
“We shouldn’t start sounding the alarms just yet,” he said. “We’ve got to see where this takes us first.”
The council will discuss golf’s performance at its Tuesday meeting.