Consultant County should run citys golf course

January 28, 2012
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Grand Rapids city commissioners find themselves so deeply in the rough regarding the Indian Trails Golf Course that even a strong seven-iron likely won’t get them to the “green” — as in money.

That’s because the city-owned course has lost about $185,000 over the last two seasons. Parts of it have been characterized as nearly unplayable. A small footbridge that spans a creek is in such poor condition it has been called a liability issue waiting to happen. The city’s two seasonal employees charged with maintaining the course haven’t been given the resources to keep it in better shape.

“The maintenance facility, for a long time, hasn’t had hot water,” said James Keegan, managing principal of Golf Convergence Inc., to commissioners.

The city hired Keegan and Leon Younger, president of Pros Consulting, to provide an operational audit of the course, which opened in 1928, and then develop a business plan for its future. The consultants said Indian Trails lost $95,824 in 2010 with revenue totaling $482,391. In 2011, the course dropped $89,025 as revenue fell to $424,110. “What we know for sure is the course needs $100,000 a year,” said Keegan.

What makes those numbers even more dismal, Keegan said, is that the weather those two years was above average, with 197 good golf days in 2010 and 198 in 2011. He added that the course’s deferred capital expenditures topped $1.4 million at a time when the city’s parks and recreation budget is a shadow of what it once was.

Indian Trails is a short 18-hole course of 5,190 yards where par is 68, four shots lower than the majority of courses. The consultants said the course’s target market is those new to the game, those who are less accomplished golfers and families. Most of the course’s paying customers live within a 10-mile radius, and it offers a nine-hole evening league. Keegan said the course was priced right, and 70 percent of its customers play nine holes.

The consultants looked at a handful of options to right the course. One was buying additional land and lengthening it at a cost of about $2 million. Another was making needed upgrades to the infrastructure, estimated at $700,000. But the option Keegan and Younger favored is for the city to invest $500,000 into Indian Trails, reduce the course to nine holes and add a driving range.

Keegan said $350,000 of that should go to the driving range, with the remainder being spent on course improvements. He said the city should receive another $150,000 to $225,000 in revenue annually once the conversion is made and should see a return on its investment within seven years.

Keegan also told commissioners that the city should look into transferring the Indian Trails operations to Kent County, which owns the more successful L.E. Kaufman Golf Course. He said Kaufman had revenue last year of slightly more than $700,000 and a net profit of $53,210.

Keegan said if the county added a Class C liquor license and evening leagues, Kaufman’s revenue take could rise by as much as $250,000 per year. He also said the county would be a more efficient operator because its payroll benefits average 26.5 percent of salaries and wages, while the city’s average is 48.2 percent.

“With the city of Grand Rapids and Kent County jointly marketing the diverse recreational opportunities available, both entities will benefit,” said Keegan. “We therefore recommend that a transfer of the golf operations to Kent County be explored concurrent with the investment of the requisite capital to revitalize a prized city asset.”

City commissioners didn’t respond other than to ask Keegan whether corporations sponsor golf courses. He told them not anymore. “Corporations have all gotten out of the golf business and don’t own clubs like they once did.”

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