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HomeMy WebLinkAbout; Carlsbad Golf Course Market Overview Economic Proj; Market Overview and Economic Projections Golf Course; 1994-08-01Economics Research Associates Atfiliated with Drivers Jonas Los Angeles .San Francisco San Diego Chicago Washington. O.C. London MARKET OVERVIEW AND ECONOMIC PROJECTIONS FOR THE PROPOSED CARLSBAD PUBLIC GOLF COURSE PREPARED FOR CITY OF CARLSBAD AUGUST 1994 ERA PROJECT NO. 11223 10990 Wilshire Boulevard, Suite 1500. Los Angeles, California 90024 (310) 477-9585 Telex: 857661 (ECON RES LA) .Fax: (310) 478-1950 TABLE OF CONTENTS Page INTRODUCTION I GOLF MARKET CONDITIONS . 1 DEVELOPMENT/OPERATING SCENARIOS 4 FACILITY LEASE CHARACTERISTICS 6 GROUND LEASE CHARACTERISTICS 7 UNDERLYING FINANCIAL FACTORS AND ASSUMPTIONS . 8 MARKET AND FINANCIAL ASSUMPTIONS 9 CAPITAL COST • • • • • SUMMARY OF PRO FORMA FINANCLU. PERFORMANCE 15 IMPACT OF RESIDENT DISCOUNTS . . 17 IMPACT OF CITY MAINTENANCE 18 11 INTRODUCTION The City of Carlsbad is considering acquisition of two major land parcels for the purpose of developing an 18-hole regulation length public golf course. The property appears to be suitable for construction of a high-quality daily fee facility which would serve Carlsbad residents as well as a broader regional market. At this time, the City is considering a number of options with respect to development and operation of the course ranging from city development and operation to a ground lease arrangement with a private golf course developer/operator. The following memorandum report presents an overview of the San Diego County golf market, review of capital cost estimates for the course, and an assessment of the pro forma economic potentials for the golf course under various development/operating scenarios. While the projections of financial performance are considered reasonable and consistent with current market experience and our assessment of the future golf market, these projections must be considered preliminary. A comprehensive market evaluation, along with more advanced site planning, will be required to refine the expected economic performance of the golf course and provide the city with sufficient input to determine the most appropriate development/operating strategy. GOLF MARKET CONDITIONS A summary of golf market data is presented in Tables 1 through 6. These include the following: Table 1 — Summary of Rounds and Greens Fees—Selected San Diego County and Other High-End Daily Fee Facilities in Southem California. Table 2 — Selected Characteristics of Surveyed Golf Courses in San Diego/ Southwest Riverside County. Table 3 — Summary of Historical Rate Increases at Selected San Diego County Golf Courses—1986-1994. Table 4 — Recently Opened Golf Courses in San Diego County. Table 5 — San Diego County Average Armual Rounds per Public Course: 1990- 1994. Table 6 — San Diego County Plarmed and Proposed Golf Courses. The following key characteristics of the golf market are noted: • Exclusive of Aviara which currently charges $105 on both weekdays and weekends, greens fees (including cart) at San Diego County high-quality daily fee courses generally range from $35 to $45 on weekdays and $50 to $55 on weekends. Greens fees at high-end daily fee facilities in Orange and other Southem Califomia counties generally are higher than at San Diego County courses, ranging from $40 to $75 on weekdays and $50 to $100 on weekends. • Armual play levels at the high-end daily fee courses in San Diego County are in the range of 45,000-65,(X)0 rounds per 18-hole course. Municipal courses^ with substantially lower greens fee structure, are generating 90,000-120,000 rounds annually. • The average greens fee per round at most courses typically approximates the 18-hole weekday rate. In the recent soft market, twilight times have been moved up to stimulate more play, although this has resulted in a reduced overall average rate ,per round. • The type ahd size of clubhouse at daily fee facilities is not a significant factor relative to golf play levels or greens fee structure. Larger clubhouses provide an opportunity to expand the food and beverage operations primarily for nongolf events and functions. • The average greens fees at San Diego County public courses typically increased at 10 to 15 percent per year over the 1986-1991 period. Since 1991, the average rate of greens fees increase at most courses has been lesis than 2 percent per year. • There have been nine courses added (or expanded) to the inventory in San Diego and southwest Riverside County since 1990. The four most significant relative to Carlsbad are Aviara, Twin Oaks, The Vineyard at Escoridido, and Eagle Crest. The performance of these courses has been mixed. Aviara is reportedly generating between 45,000 and 50,000 rounds at a $105 greens fee, and The Vineyard will generate about 65,000 rounds in its first year at $35 weekday and $45 weekend greens fees (including cart). Twin Oaks and Eagle Crest, at a similar rate structure to The Vineyard, will generate 40,000-50,0(X) rounds in their first full year of operation. • The inventory of public facilities in the county has increased from 33.0 to 40.5 18-hole courses over the 1990-1994 period. While total public rounds have increased at a rate of about 4 percent per year, the average annual rounds per public course has declined from 72,000 to 67,000 over this same time frame. • There are numerous golf courses planned and proposed in the county. None of these appear to be moving fonvard at this time and it is likely that there will be limited expansion of the San Diego Country golf inventory over the next fiye years. In general, the golf market has softened over the past several years, with greens fees and play levels at most moderate and high-end public courses plateauing or, in some cases, declining slightly. This market softening followed a period of unprecedented golf market growth during* the late 1980s and into the early 1990s, and resulted from a number of factors inciuding a severe economic recession, rapid run-up in greens fees during the 1985-1990 period, the addition of several new golf courses to the inventory, and a slowing of the growth in golf demand. . The private golf market has been affected to a miich greater degree as membership prices have declined significantly and most clubs are having difficulty maintaining their membership levels. Midmarket and high-end clubs have been particularly affected. The outlook is reasonably bright with respect to the public golf course market. Over the next five-year period, the expansion of the golf course inventory is expected to be very limited. Although there are several courses proposed, the probability of entry is low for most of these facilities. The recovering economy and population growth projected in the north coastal and north inland areas of the county over the next five years should translate into a firming of the golf market and support for one or two additional public golf facilities. With the addition of Twin Oaks, The Vineyard and Eagle Crest in the north inland area of the county, this region is adequately served with golf facilities in the mid-term. The inland coastal area has only seen the addition of the Aviara course at the high end of the public market in recent years. A golf course in Carlsbad would <iraw its primary market support from the coastal area extending from the La Jolla area on the south to Oceanside on the north (an area with about 400,000 resident population). The City of Carlsbad has a population of 68,000, nearly sufficient by itself to support an 18-hble public facility. The competitive facilities currently serving this market area are Aviara, Oceanside Municipal, Whispering Palms and Torrey Pines. Oceanside and Torrey Pines are at capacity (120,000 rounds), Aviara is at the highest end of the market, and Whispering Palms is a semiprivate complex which accommodates about 45,000 public rounds annually. In our opinion, given the city objectives, subject site characteristics, current and anticipated golf market conditions, the appropriate positioning of the course from a market perspective is above midmarket. Providing a quality golf experience superior to Whispering Palms and the new north inland county facilities at a pricing structure, before any resident discounts, competitive with or slightly above these facilities, appears appropriate. DEVELOPMENT/OPERATING SCENARIOS There are three basic development/operating scenarios for the golf course, with several variations to these regarding city maintenance and resident discount policies. The three basic scenarios are as follows: I • City development with operation under a private Fee for Service Contract. The city would develop the golf course and contract with i private golf management firm for operation of the course. The city would receive all revenues and be responsible for all expenses. The management firm would be compensated by a fixed fee plus incentive-based performance payment. • City development with a Facility Lease Agreement. The city would develop the golf course and lease the facility on a turnkey basis to a private professional golf management fum The lessee would pay a fixed lease payment versus a percentage of gross revenue. The length ofthe lease term could vary from 5 to 15 years or longer, depending upon the lessee's capital requirements and type of financing in place (specifically, the lease term is limited to a maximum of five years if tax-exempt financing is used). • Ground Lease of the site to golf course developer/operator. The private developer would construct and operate the golf course, subject to negotiated policies, terms, and other conditions, paying a ground lease payment to the city. The payment would consist of a minimum guarantee versus a percentage of gross revenue. The length of the term would likely range from 35 to 55 years. Course construction costs could be funded through taxable municipal or private financing. Under the first scenario, the city could elect to maintain and operate the course, or maintain the course while retaining a golf operations concessionaire (pro shop, carts, reservations/starting, food and beverage, practice range). The economics associated with these variations is addressed. The issue of resident discounts also is considered. Resident discounts Would affect the economics of each of the development/operating scenarios delineated above. The financial impact would depend on the amount of the discount and policies regarding restrictions of discount play at selected times. It should be noted that offering resident discounts would probably result in an increase in overall play levels from those under a pure market rate scenario. FACILITY LEASE CHARACTERISTICS Table 7 presents a summary of the characteristics of comparable Southem Califomia golf course turnkey lease terms — facilities where all operations are leased to a contract operator. In general, the faciUties are leased to a management company with a mimmum lease payment versus percentage rents. The contract specifies performance standards, required capital improvements and a range of contractual terms. It is important to note the agreement date, as the improving economics of the golf market and competitiveness in the golf management industry are reflected m more favorable lease terms to the lessor in recent years. The various terms of the leases are interrelated and the lease payments must be considered in the context of all the terms of the lease. Lease Term — The term of the facility leases shown ranges from 15-35 years. Due to front-end lessee capital improvement requirements, the term of the lease must be long enough to amortize capital expenditures. The length of the term normally is a function of the level of capital improvements. Some five-year facility leases have been initiated in cases where the lessee has minimal front-end capital expenditures. Also, at courses where public bonds are involved, a golf management contract term cannot exceed fiye years. Minimum Rent — The minimum rent typically is established at about 75 to 80 percent of the expected "percentage rent" amount. The minimum often is adjusted annually to reflect about 80 percent of the average of percentage rents paid during the prior three to four years'operation. Percentage Rents — Percentage rents vary by golf department, although often a composite rate is applied to greens fees, cart revenue, and driving range revenue. Merchandise, food and beverage, and other minor departments generally have lower individual percentage rents. The percentage rents are a function of the length of term, required capital improvements, utility sharing agreements, and the replacement reserve requirements. Percentage rents may "step up" over the term of the lease. Thei higher the capital expenditure requirement, replacement reserve, and costs associated with utilities and other course operations, the lower the percentage rent structure. Also, the market strength and potential profitability of the course strongly influence percentage rents. Capital Improvements — Most facility leases call for capital improvements to be funded by the lessee. A list of improvements is specified and a time frame for their implementation is established. For new courses, the lessee would not have significant capital improvement requirements but, probably would be required to provide maintenance equipment, pro shop inventory, and other start-up items. Replacement Reserve — Generally, some provision for establishing a reserve for capital improvements is stipulated. The replacement reserve is normally a percentage of greens fee revenue, with the percentage depending on anticipated future capital requirements, the age of the course, and the front-end capital expenditure requirement. Usually, the replacement reserve is in addition to percentage rents, but sometimes the reserve funds are credited against rent payments. Utilities — Due to the high cost of water in Southem California, there may be some cost sharing of utilities, or some protection provided the lessee in terms of ceilings or caps on utility rate increases. GROUND LEASE CHARACTERISTICS Selected characteristics of several Southem Califomia golf course ground leases are presented in Table 8. The ground lease terms can vary significantly depending on specific golf market conditions at the timie the lease was executed, as well as other factors such as the conditions of the lease (e.g., lease term), and cost tb develop the golf course. Typically, ground leases are structured with a minimum annual payment versus percentage of gross revenue lease amounts, whichever is greater. Also, ground lease percentage rates generally are graduated over the length of the term. Typically, in the later years of the lease, as the capital improvements are aniortized, the percentage rates increase. Generally, there is some relief in the early years of the lease, allowing the golf course operation to stabilize before ground lease payments become fully effective. UNDERLYING FINANCUL FACTORS AND ASSUMPTIONS Clubhouse For the purpose of this analysis, we have assumed the development of a modest clubhouse of approximately 6,000 square feet, plus cart storage of about 4,000 square feet (this clubhouse is smaller than the city's preliminary concept which calls for a 14,000-square- foot clubhouse). This would include a pro shop, small administrative office and storage areas, and a bar/grill operation with about 80 seats. The following space allocation would be representative of the proposed facility: • • 'Size ^ . • Component (sq.ft) Pro Shop 1.400 Office and Storage Area 600 Bar and Grill* 2,200 Rest Rooms/Common Area 1,000 Circulation 800 Total 6,000 'Includes kitchen. Development Schedule The following development schedule has been assumed in each of the scenarios that have been formulated for the proposed Carlsbad Course: Event Period Course Planning/Design/Entitlements 1994-1995 Golf Course Construction 1996 First Golf Play 1997 Clubhouse Constructton 1996 Clubhouse Opening 1997 MARKET AND FINANCIAL ASSUMPTIONS The market and financial assumptions for the three basic scenarios are outlined below. The scenarios initially are analyzed without resident discounts. All financial estimates below are expressed in constant 1994 dollars. Fee for Service Contract Utilization. Annual golf play for the subject course, reflecting the greens fees and other course characteristics indicated below, is projected as follows: Number of Year Rounds 1 50.000 2 60.000 3+ 65.000 18-Hole Equivalents 58.000 The distribution of play at stabilization is estimated as follows: Number of Rounds Weight Weekday* 35.750 55.0% Weekend 29.250 45.0 . Total 65,000 100.0% 18-Hole 52.000 80.0 9-Hole/Twilight 13.000 20.0 Total 65.000 100.0% •Monday-Friday. Fee Weisht $40.00 31.0% 25.00 13.0% 55.00 36.0% 25.00 8.0% 15.00 3.0% 35.00 9.0% $40.99 100.0% fl.23) (3.0%) $39.76 97.0% Greens Fees (including cart) 18-Hole Weekday Seniors (weekdays only) Weekend 9-Hole/Twilight Weekday Seniors (weekdays only) Weekend Average/Total Less: Complimentary Overall Weighted Average Other Revenue Other potential sources of revenue include practice range, pro shop sales, and food and beverage operations. These are assumed to remain the same for each of the four scenarios. Projections for these are as follows: ' • • • ' / • Night-Lighted Practice Range (35 tees) Gross Revenue ~ $350,000 per year • Pro Shop Gross Revenue - $5.00 per round • Foiod and Beverage (gross reyenue) Grill Operation - $4.00 per round Special Events - $350,000 Operating Expenses — Contract Management The costs of operating the proposed municipai golf course with an outside management firm, including course maintenance, water, replacement reserve, and general and administrative expenses, are estimated below. These costs were developed based on the experience of local operators and ERA's experience with comparable quality golf courses in Southem Califomia. 10 Golf Course Maintenance Payroll Superintendent (1 @ $50,000) $50,000 Assistant Superintendent (1® $35,000) 35.000 Greens (3 @ $15,000) 45,000 Other Landscape (4 @ $15,000) 60,000 Equipment Operators/Other (3 @ $18,000) 54.000 Part Time (5,000 hours @ $7.00) 35.000 Subtotal Salaries $279,000 Benefits @ 25 percent 71.000 Total Salaries & Benefits $350,000 Services and Supplies 180.(XX) Total Golf Course Maintenance $530,000 Water and Power 450 acre feet at $740/acre foot* $330,000 Replacement Reserves Maintenance Equipment $ 50.000 Golf Course 75.000 •Assumes use of well water. Golf Operations Pro Shop Staff (3 @ $20,000) $ 60,000 Golfer Service Personnel (5 @ $12,000) 60.000 Starters/Marshals (3 @ $15,000) 45.000 Subtotal Salaries $165,000 Benefits @ 25 percent 40.000 Subtotal Prt) Shop Staff $205,000 Carts Lease Payments (80 @ $750) $ 60,000 Maintenance 60,0(X) Subtotal Carts $120,000 Practice Range 75,000 Utilities/Miscellaneous . . 35,000 Total Operations $435,000 11 General and Administrative Salaries and Benefits Course Manager/Golf Pro $60,000 Assistant Manager/Pro 35.000 Subtotal Salaries $ 95,000 Benefits @ 20 percent 25.000 Subtotal $120,000 Other Expenses Insurance $ 50,000 Property Taxes 0 Advertising/Miscellaneous 40.000 Subtotal Expenses $90,000 Management Fee (4 percent of gross) 152.000 Total General and Administrative $362,000 City Operatmg Expenses (for city budgeting, policy formulation, audit, accounting, and other administrative services). Salaries and Benefits $ 60,000 Audit/Accounting/Other 15,000 Total $ 75.000 Reversion Value — Based on 7% Capitalization Rate Facility Lease The following parameters are based on a "no resident discount" operating scenario. Lease Term 15 years Capital Requirements' $750,000-$ 1.000,000 Minimum Rent , $900,000 'Maintenance equipment ($400,000), pro shop inventory ($150,000), food service startup ($100,000). and practice range startup ($50,0()0). 12 Year Percent of Gross Revenue Golf Food & Related' Merchandise Beverage 1 20% 6% 10% 2 • • 25% 6% 10% 3-5 30% 6% 10% 6-20 32% 6% 10% 21-40 35% 6% 10% Capital Improvements Reserve (percent of greens revenue) 5% City Operating Expenses (for contract enforcement, golf course monitoring, audit, accounting, and other administrative services) Salaries and Benefits Audit/Accounting/Other Total Reversion Value — Based on 7% capitalization rate $35,000 15.000 $50,000 Ground Lease The following parameters are based on a "no resident discount" operating scenario. Lease Term Golf Course Development Cost (turnkey) Minimum Rent 40 years $2 million $100,000* 'Greens/carts and practice range. 'Adjusted to 8 percent of prior year's rent. Percent of Gross Revenue Golf Food & Year Related Merchandise Beverage 1 0% 0% 0% 2 3% 3% 3% 3-5 5% 3% 3% 6-10 8% . 5% 5% 11-20 10% 5% 5% 21-40 15% 5% 5% 41+ (facility lease) 35% 6% 10% 13 Capital Improvements Reserve (percent of golf related) 5% City Operating Expenses (for contract enforcement, audit, accounting, and other administrative services) Salaries and Benefits $25,000 Audit/Accounting/Other 10.000 Total $35,000 Reversion Value — Based on 7% capitalization rate CAPITAL COST Table 12 presents a preliminary estimate of capital cost for the proposed Carlsbad golf course. These costs are based on preliminary estimates prepared by the city, with slight adjustments noted as follows: • Preparation of the commercial pad has been omitted ($241,000). • The clubhouse has been downscaled from 14,000 square feet to 10,000 square feet (6i000-square-foot clubhouse plus 4,000-square-foot cart storage), reducing the cost by $500,000. • The contingency has been reduced from 15 percent to 5 percent of direct costs (reduction of $1.2 million). • Construction interest and fees have been added, increasing the cost by $850,000. The adjusted cost is indicated at $12.7 million, plus the cost of land acquisition. Table 13 presents the Carlsbad preliminary cost estimate compared with industry guidelines for high-quality daily fee courses. As indicated, the cost estimate for the Carlsbad course is at the top of the range. The Carlsbad course has a number of unusually costly components which relate to the characteristics of the site. These include a significant amount of mass grading ($2.2 million), 75 acres of slope area which require irrigation system improvements and revegetation ($600,000), a substantial landscaping allowance ($850,000) and road crossings ($250,()00). 14 Table 14 indicates the estimated cost of selected Southem Califomia golf courses. The golf course costs at Tijeras Creek, Tustin Ranch, and Redhawk have been adjusted to eliminate grading and other costs related to adjoining residential development. SUMMARY OF PRO FORMA FINANCIAL PERFORMANCE Based on the underlying financial factors and assumptions outlined above, pro forma financial projections are presented in Tables 9 throiigh 11. Note that the following scenarios assume no "resident discounts" are offered. I. City Developed/Contract Operation (Table 9) II. Facility Lease (Table 10) in. Ground Lease (Table 11) The net revenue to the city for these three basic scenarios over a 40-year time frame following construction completion has been projected. For each scenario, a reversion value is estimated at the end of the 40th year (effectively representing the value of future eamings) and an estimate of the value of the income stream (present value) is calculated. The value of the income stream is based on discounting the armual net cash flow stream, including the asset reversion value at the end of the 40th year, to the present value at an appropriate discount rate. The discount rate (and reversion value capitalization rate) must reflect the cost of capital, development profit, and risk. Accordingly, within a 3 percent inflation environment, the discount rate for Scenario I is indicated at 12 percent, reflecting the highest degree of risk, and 10 percent for Scenarios EI and III which entail less risk. (The ground lease scenario may require city-issued taxable financing which would increase the city's risk.) The results are summarized below: 15 Amount (thousands of dollars) Less: Present Costof Net Scenario Value Development* Value I. City Develop/Contract Operate $14,437 $12,720 $1,717 II. Facility Lease 12,742 12,720 22 in. Ground Lease 4.126 1.000 3.126 •Excludes land. As shown, under Scenario I (City develop with Contract Operation) the differential between the value of the asset at construction completion is indicated at $14.4 million compared with capital cost of $12.7 million, yielding only $1.7 million net (residual land) value. There are two major factors which negatively impact the net value: • Water costs for the proposed golf course are very high at $330,000 per year ($740 per acre foot). • The capital cost of the golf course is at the high end of the range. Under Scenario n (Facility Lease), the value of the course resulting from the lease terms assumed in this analysis is slightly higher than development costs. Under a long-term lease agreement, it is likely that a portion of the capital cost, or slightly higher lease payments, could be extracted from the lessee, thus increasing the net value by $1 to $2 million. Under Scenario m (Ground Lease), based on typical ground lease terms for similar facilities, the value.of the income stream is estimated at $4.1 million. The city's cost of planning and other front-end costs is estimated at $1 million, yielding a $3.1 million net value. While this appears to be the most economic approach, ground leasing the site at the standard terms assumed in this analysis is somewhat speculative and may be overiy optimistic in the current market. Further, if the site is leased, the developer/operator may elect to develop a different type and quality of course which could affect the projected ground lease income stream, require subsidies on water, or other concessions from the city including city- issued taxable financing. 16 IMPACT OF RESIDENT DISCOUNTS Based on market area demographics, including Carlsbad's resident population versus the balance of the principal market area, the experience of other cities, and the resident discount poUcy, the following distribution of play is projected: Annual Rounds Weekday Weekend Total Resident 16.100 15.400 31.500 Nonresident 11.200 15.400 26,600 Seniors 11.900 11.900 Total 39.200 30.800 70.000 Note that the total annual play is projected at 5,000 rounds higher than the "no discount" policy. There are various forms of preferential treatment and discount policies which may be employed. For analysis purposes, the following resident discount policy characteristics are assumed: Resident Nonresident 18-Hole Weekday $30.00 $40.00 ' Weekday—Senior 25.00 25.00 Weekend 50.00 55.00 9-Hole/Twilight Weekday 20.00 25.00 r Weekday—Senior 15.00 15.00 Weekend 30.00 35.00 Senior discounts (resident and nonresident) apply only to weekdays. No restrictions are placed on resident play. With resident discounts, 75 percent of play is 18-hole play compared with 80 percent under a no-discount scenario. 17 A pro fonha financial analysis assuming resident discounts is shown in Table 15. Stable-year net operating income and golf course value, under the assumption of increased play with resident discounts, is only slightly below the no-discount scenarios: No Resident Discounts With Resident Discounts Total Annual Rounds 65,000 70,000 Average Stable-Year Project Rate per NOI* Value Round (thousands) (thousands) $39.76 35.91 $1,369 1.309 $14,437 13,504 •Year 3. expressed in current dollars. As indicated, aimual net operating income with resident discounts is only about $60,000 below the no-discount scenario. This assumes that play levels would increase under the discount scenario by 5,000 rounds annually. If play levels remained the same, aimual net income would decline by about $250,000 annually, resulting in a reduction in value of about $2.7 million from the no-discount scenario. IMPACT OF CITY MAINTENANCE Golf course maintenance by the city would result in higher golf course maintenance expenses attributable primarily to higher public employee wage rates and benefit packages. There may also be some cost savings relating to professional golf course operation resulting from economies df purchasing supplies. Maintenance expenses with public employees are calculated at $150,000-$200,000 more than with private sector employees. This would translate into about a $2 million decrease in the overall value of the golf course. 18 Table 1 SUMMARY OF GREENS FEES AND FLAY LEVELS Number of Annual Percent 18-Hole Greens Fees Holes Rounds 18.Hole Weekdav Weekend Including Cart Aviara 18 47.000 90% $105 $105 Steele Canyon 27 65.000 85% 40 50 Carlton Oaks 18 44.000 90% 55 55 Twin Oaks 18 48.000 80% 38 50 Eagle Crest 18 41.000 90% 35 50 Whispering Palms 27 96.000 100% 45 55 Pala Mesa 18 55.000 85 35/45* 65 Carmel Mountain Ranch 18 46.000 100% 40 50 Mount Woodson 18 48.000 90% 40 55 Redhawk 18 47.000 90% 45/55* 65 Moreno Valley Ranch 27 80.000 70% 38» 53 Oak Valley 18 45.000e 85% 35 50 Pelican Hill 36 50.000* 90% 125* 145 Tustin Ranch 18 70.000 90% 65' 85 Tijeras Creek 18 65.000 90% 50* 75 Monarch Beach 18 50.000 90% 75' 100 Rancho Bernardo Inn 18 50.000 85% 55' 70 Industry Hills 36 110.000* 80% 42' 57 Sandpiper 18 55.000 85% 55 75 Cypress/Los Alamitos 18 45,000e 90% 75' 95 Excluding Cart Eastlake 18 50.000 85% 29 45 Carmel Highland 18 40.000 90% 32 62 Castle Creek 18 60.000 80% 20 30 Meadowlake 18 55.000 85% 24 32 San Luis Rey 18 65,000 80% 25 35 Fallbrook 18 70.000 75% 20 28 Singing Hills 36 120,000 80% - 27 32 Rancho San Diego 36 130,000 80% 27 32 Sun Lakes 18 65.000 85% 45 45 Soboba Springs 18 40.000 85% 27 36 Quail Ranch 18 40.000 85% 25 40 Temecula Creek 27 75.000 80% 33 44 Menifee 18 52.000 85% 25 35 Rancho Califomia 18 47,000 85% 35 45 Municipal (excluding cart) Oceanside 18 120.000 70% 16 21 Torrey Pines 36 195,000* 75% 20/40* 24/47* Vineyard 18 65.000' 80% 25/30* 35/40* 'Mondaiy-Thiirsday. *rotal, both courses. 'Projected, first year of operation. Source: Economics Research Associates. 'Monday-Wednesday/Thursday-Friday. ^Ocean course, first year of operation. *North course/south course, *City resident/nonresident. Table 2 CHARACTERISTICS OF MARKET AREA GOLF COURSES 1994 Course Location Twin Oaks Oceanside Torrey Pines Eagle Crest The Vineyard San Marcos Oceanside San Diego Escondido Escondido Daily Fee Municipal Municipal Semiprivate Municipal Ted Robinson — — Rainville David Rainville Brock . Oceanside San Diego Koll Cobblestone JC Resorts American Golf McKee Golf Corp. Cobblestone May 1. 1993 1974 1958 May 21. 1993 Dec 1993 18 18 36 18 18 72 72 72/72 72 — . 6.525/6.161 6,450 7.027/6,636 6.400/6.000 6.500 70.2 74.0/71.3 — — 128 118 131/124 — — $38 $16 $40 $35 $30 $50 $21 $47 $50 $40 $24 ' $10 $20 $25 $18 $35 $12 $24 $35 $20 $12 $23/14.50' $25/15* — $16 $25/14.50 — $35/18* $ 6.00^ $25 .. $18/12* $16.00* — — Included $18/cart $22/cart Included $20/12 Yes No No Yes Weekends 'Ul 12 100% n.a. 40% 100% — 75 75 120 80 75 4.000 2,500 — Temporaty Temporary None . — — — ' Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 25 30 20 20 35 10O-I25 350 600* 80-100 150-200 150-200 350 600* 150-175 200-250 48.000 120.000 195.000* 41.000 65.000* 20% 30% 25% 10% 20% 7 days 7 days — 7 days *San Diego and Escondido residents only. ^Oceanside resident. *Both cour$es. ^Projected, first year of play. Course Type Course Architect Owner Operator Year Opened Number of Holes Par Course Length (back/middle) Rating (back/middle) Slope (back/middle) Greens Fees Standard (18 holes) Weekday Weekend Twilight (9 holes) Weekday Weekend Resident (18/9 holes) Weekday Weekend Seniors (18/9 holes) Weekday Weekend Cart Fees (18/9 holes) Mandatory Percent Using Carts Inventory Facilities Clubhouse Size (sq.ft.) Banquet Seating Capacity Snack Bar Driving Range Number of Tees Average Daily Rounds Weekday Weekend Annual Number of Rounds Peicent Twilight/9-Hole Play Tec Time Policy 'County resident/city resident. Table 2 (Continued) Course Location Whispering Palms Rancho Santa Fe Aviara Carlsbad Castle Creek Escondido Meadowlake Escondido Rancho Bernardo Inn Rancho Bernardo Semiprivate Resort Daily Fee Semiprivate Resort Rainville Amold Palmer Doherty Sanderson Bell Cobblestone Hillman Fuji USA Lawrence Welk JC Resorts Cobblestone Four Seasons Fuji USA Lawrence Welk JC Resorts 1970 ' July 1991 1956 1965 1963 27 18 18 18 18 36/36/35 72 72 72 72 3.119/3.324/3.022 7.007/6.591 6.410/5.476 6.521/6.312 6.388 69.7/701/68.8 74.9/71.8 68.9/67.6 71.2/69.6 70.2 111/112/110 141/130 124 131/124 122 $35 $105 $20 $24 $55«"* W5 $105 $30 $32 $70' $20 $70 $14 $15 $20 $20 $70 $20 $17 $25 $10/$7 per person Included $10/$5 per person $12 per person $ll/person No Yes No Daily 'til 10 a.m. 9 a.m.-2 p.m. 35% 100% 60% 90% 90% 86 80 75 60 80 15.000 30,000 11.000 7.000 — 280 350 200 — —- '• Yes Yes Yes Yes Yes No Yes Yes Yes Yes . — 12 15 12 25 250 100-125 150 110 140 300 150-200 250 225 175 96.000 47.000 60.000 55.000 50.000 — 10% 20% 15% 15% 7 days/3 days 7 days 7 days 7 days 7 days Course Type Course Architect Owner Operator Year Opened Number of Holes Par Course Length (back/middle) Rating (back/middle) Slope (back/middle) Greens Fees Standard (18 holes) Weekday Weekend Twilight (9 holes) Weekday Weekend Resident (18/9 holes) Weekday Weekend Seniors (18/9 holes) Weekday Weekend Cart Fees (18/9 holes) Mandatory Percent Using Carts Inventory _^ Facilities Clubhouse Size (sq.ft.) Banquet Seating Capacity Snack Bar Driving Range Number of Tees Average Daily Rounds Weekday Weekend Annual Number of Rounds Percent Twilight/9-Holc Play Tee Time Policy 'Includes can. *Monday through Thursday. Table 2 (Continued) Course Location Pala Mesa Fallbrook San Luis Rey Bonsall Fallbrook Carmel Mountain Ranch Fallbrook San Diego Carmel Highlands San Diego Course Type Course Architect Owner Operator Year Opened Number of Holes Par Course Length (back/middle) Rating (back/middle) Slope (back/middle) , Greens Fees Standard (18 Holes) Weekday Weekend Twilight (9 Holes) Weekday Weekend Resident (18/9 Holes) Weekday Weekend Senior (18/9 Holes) Weekday Weekend Cart Fees (18/9 holes) Mandatory Percent Using CarU Inventory Facilities Clubhouse Size (sq.ft.) Banquet Seating Capacity Snack Bar Driving Range Number of Tees Average Daily Rounds Weekday Weekend Annual Number of Rounds Percent Twilight/9-Hole Play Tec Time Policy Resort Rossen Mark 5 Prop. Mark 5 Prop. 1962 18 72 6.442/6.151 71.1/69.5 131/125 $35' $65 $25 $35 Included Yes 100% 90 600 Yes Yes 15 150 175 55.000 15% 7 days Daily Fee Bell Vessels Vessels 1966 18 72 6.610 71.2 128 $25 $45* $15 $25* Daily Fee H. Rainville Cooke Cooke 1962 18 72 6.205 69.3 117 $20 $28 $16 $20 $8/$4 per person On weekends 75% 82 250 Yes Yes 20 150-175 250 65,000 20% 7 days $9 per person No 50% 70 None Yes Yes 12 150 250-300 70.000 25% 7 days Seniiiprivate Ron Fream Cobblestone Cobblestone April 1986 18 72 6.615/6.217 12.900.5 136/128 $40/50^ $50/60* $25/30* $25/30* Included Yes 100% 80 20.000 190 Yes Yes 15 100 150 46.000 7 days Resort Duray Diashin USA Doubletree 1967 18 72 6.501/6.112 71.1/68.9 122/115 $32* $52* $20 $20 $32* $10 per person On weekends 60% 80 n.a. 700 Yes No 100 150 40.000 10% 5 days 'Monday-Thursday; Friday rate at $45; note that 18-hole greens fees have been reduced from $55 and $70. 'includes cart. *County resident/nonresident. *Monday-Thursday. Course Location Singing Hills El C^jon Table 2 (Continued) Mount Woodson Ramona Rancho San Diego Ei Cajoa Carlton Oaks Santee Course Type Course Architect Owner Operator Year Opened Number of Holes Par Course Length (back/middle) Rating (back/middle) Slope (back/middle) Greens Fees Standard (18 Holes) Weekday Weekend Twilight (9 Holes) Weekday Weekend Resident (18/9 Holes) Weekday , Weekend Senior (18/9 Holes) Weekday Weekend Can Fees (18/9 holes) Mandatory Percent Using Carts Inventory Facilities Clubhouse Size (sq.ft.) Banquet Seating Capacity Snack Bar Driving Range Number of Tees Average Daily Rounds Weekday Weekend Annual Number of Rounds Percent Twilight/9-Hole Play Tee Time Policy Semiprivate In-House/Robinson Horrel. Hollingwonh Horrel, Hollingsworth 1956 ' 36 71/71' 6.600/6.100' 71.5/69.0' 124/112' $27 $32 $15 $18 $18/can No 60% 150 250 Yes Yes 20 300-350* 600-700* 120,000* 20% 7 day s Semiprivate Landmark Davidson JC Resorts August 1991 18 70 6.180 68.8 130 $40* $55 $28* $38 Included Yes 100% 80 Temporary Yes No 100-125 150-200 48,000 10% 7 days Daily Fee Nina Ent. Nitta Ent. 1962 36 73/71* 7.011/6.110* 74.4/68.8* 129/108* $27/24* $32/28* $15/14* $18/16* $21/19* $19/can No 65% 140 7.200 350 Yes Yes 25 350* 600-650* 130.000* 20% 7 days Daily Fee Dye Designs Kunimoto Kunimoto l%l/1989 18 72 7.088/6.534 75.4/71.2 143/137 $55 $55 $40/30 $40/30 Included Yes 100% 80 20.000 250 Yes Yes 20 100 150-175 44.000 10% 3 days Redhawk Rancho California Daily Fee Ron Fream RDHK Ventures RDHK Ventures October 1991 18 72 7.07Q/6.655 75.3/72.4 142/133 $45* $65 $36 $36 Included Yes 100% 84 Temporary Yes Yes 25 100 150-175 50.000c 15% 7 days/5 days* e = esUmate. Willow/Oak. *IvanhoeA4onte Vista. *Monday through Thursday. *Monday-Thursday; Friday rate at $55. *Both courses. *Member/public. Table 2 (Concluded) Course Location Temecula Creek Rancho California Steele Canyon Eastlake Menifee Lakes Temecula Temecula Jamui Chula Vista Menifee Resort Daily Fee Semiprivate Semiprivate Semiprivate Rossen/Robi nson R.T. Jones. Sr. Gary Player Ted Robinson Ted Robinson JC Resorts SCGA Beachamp Eastlake Development Lusk JC Resorts SCGA Beachamp Sunrise Co. CoUeU 19101 April 1990 Febmary 1987 July 1991 June 1991 October 1989 . 27 18 27 18 18 36 on all 9s 72 35/36/36 72 72 3.348/3.436/3.257 7.109/6,586 3.206/3.535/3.466 6.606/6.225 6.472/6.075 74.7/71.4 72.2 70.7/68.7 71.2/69.0 123/125/130 136/125 125 116/109 128/119 $33 $30/45' $40 $29 $35 $44 $40/55' $50 $45 $45 $15 $18 $27 $20 $20 $20 $24 $30 $28 $30 $30 — — — -$40 $ll/$7 per person Included Included $12 per person Included No Yes Yes No No 80% 100% 100% 65% 90% 140 90 120 70 80 n.a. 5.000 Temporary Temporary 22,000 500 — — — 300 Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 20 20 20 40 24 Course Type Course /Vrchitect Owner Operator Year Opened Number of Holes Par Course Length (back/middle) Rating (back/middle) Slope (back/middle) Greens Fees Standard (18 holes) Weekday Weekend Twilight (9 holes) Weekday Weekend Resident (18/9 holes) Weekday Weekend Seniors (18/9 holes) Weekday Weekend Cart Fees (18/9 holes) Mandatory Percent Using Carts Inventory Facilities Clubhouse Size (sq.ft.) Banquet Seating Capacity Snack Bar Driving Range Number of Tees Average Daily Rounds Weekday Weekend Annual Number of Rounds Percent Twilighl/9-Hole Play Tee Time Policy 200 260 75,000 20% 7 days 115-140 180-200 47.000 15% 10/7 days' 150 300 65,000 15% 7 days 100-150 200 50.000, 15% 7 days/5 days* 100-125 225 52.000 15% 7 days/6 days* 'SCGA member/public. *Member/general public. Source: Economics Research Associates. 1986 WD WE Rancho California. n.a n.a. Temecula Creek $14.00 $18.00 Meadow Lake 10.00 14.00 PaU Mesa 27.00 29.00 Carmel Highland n!a D.a. Fallbrook 12.00 15.00 San Luis Rey 13.00 17.00 CasUe Creek 10.00 13.00 Rancho Bern. Inn 24.00 24.00 Carmel Mm Ranch 20.00 25.00 Whispering Palms 13.00 15.00 Rancho San Diego 13.00 18.00 Singmg HiUs 16.00 18.00 Percent Annual Change Rancho Caiifomia (1) Temecula Creek Meadow Lake Pala Mesa Carmel Highland (1) Fallbrook San Luis Rey CasUe Creek Rancho Bernardo Inn Carmel Mountain Ranch Whispering Palms Rancbo San Diego Singing HiUs (1) Percenl change from 1987. Source: Economics Research Associates. Table 3 SAN DIEGO AREA GOLF COURSE HISTORICAL RATES Standard 18-hole rate, excluding cart 1987 wiTJ^vyiE $20.00 $30.00 15.00 19.00 12.00 30.00 17.00 14.00 14.00 11.00 25.00 25.00 14.00 15.00 35.00 19.00 17.00 18.00 14.00 25.00 30,00 16.00 15.00 20.00 17.00 20.00 1986-1991 WDH WE 5.7% 7.5% 18.7% 19.6% 17.1% 13.2% 5.3% 11.5% 15.3% 20.5% 10.8% 10.8% 14.0% 12.0% 14.9% 18.2% 13.4% 13.4% 11.8% 14.9% 12.1% 13.3% 14.0% 10.8% 9.3% 10.8% 1988 wpJ WE $20.00. $30.00 19.00 25.00 19.00 23.00 35.00 40.00 24.00 26.00 15.00 18,00 15.00 20.00 13.00 17.00 30.00 30:00 28.00 38.00 24.00 27.00 17.00 22.00 20.00 25.00 1991-1994 WI) WE 11.9% 4.0% 0.0% 0.0% 2.9% 2.5% 0.0% 0.0% 2.2% 16% 0.0% 3.8% 0.0% 5.3% 0.0% 0.0% 0.0% 10.1% -5.0% -7.2% 15.0% 17.1% 2.6% 2.2% 2.6% 2.2% $25.00 $35.00 25.00 30.00 1989 WD WE 20.00 50.00 24.00 16.00 26.00 16.00 35,00 30.00 26.00 20 00 20.00 24.00 50.00 29.00 20.00 41.00 21,00 35.00 45.00 31.00 25.00 25.00 1986-1994 WD WE 8.3% 6.0% 11.3% 11.8% 11.6% 9.1% 3.3% 7.0% 9.5% 12.0% 6.6% 8.1% 8.5% 9.4% 9.1% 11.0% 8.2% 12.1% 5.2% 6.1% 13.2% 14.7% 9.6% 7.5% 6.8% 7.5% 1990 WD WE $25.00 $40.00 27.00 39.00 22.00 26.00 50.00 50.00 25:00 30.00 18.00 22.00 20.00 25.00 16.00 21.00 40.00 40.00 30.00 45.00 23.00 28.00 25.00 30.00 23.00 27.00 1991 WD WE $25.00 $40.00 33.00 44.00 22.00 26.00 35.00 50.00 30.00 40.00 20.00 25.00 25.00 30.00 20.00 30.00 45.00 45.00 35.00 50.00 23.00 28.00 25.00 30.00 25.00 30.00 1992 WD WE $25.00 $40.00 33.00 44.00 22.00 26.00 45,00 45.00 30.00 40.00 20.00 25.00 25.00 30.00 20.00 30.00 50.00 60.00 35.00 SO.OO 23.00 28.00 26.00 31.00 25.00 30.00 1993 WD WE $25.00 $38.00 33,00 44.00 24.00 28.00 45.00 60.00 30.00 42.00 20.00 28.00 25.00 35.00 20.00 30.00 45.00 60.00 25.00 40.00 25.00 35.00 27.00 32.00 25.00 30.00 1994 WD WE $35.00 $45.00 33.00 44.00 24.00 28.00 35 00 50.00 32.00 42.00 20.00 28.00 25.00 35.00 20.00 30.00 45.00 60.00 30.00 40.00 35.00 45.00 27.00 32.00 27.00 32.00 Tabic 4 RECENT COURSE OPENINGS Course/Location Number of Holes Date Opened 18-Hole Rate' Weekdav Weekend The Vineyard/Escondido 18 12/1993 $35/40* $45/50* Eagle Crest/Escondido 18 5/1993 35 50 Twin Oaks/San Marcos 18 8/1993 38 .50 Redhawk/Temecula 18 10/1991 45/55' 65 Mt. Woodson/Ramona 18 8/1991 40 55 Aviara/Carlsbad 18 7/1991 105 105 Steele Canyon/Jamul 27 7/1991 40 50 Eastlake/Chula Vista 18 6/1991 41 57 Temecula Creek/Temecula 9* 1990 44 55 'Including cart. 'Resident/nonresident. ••Monday-Wednesday/Thursday-Friday. ^Expansion to 27 holes. Source: Economics Research Associates. I I Table 5 AVERAGE ANNUAL ROUNDS PER PUBLIC COURSE Number of 18-Hole Average Rounds PubHc Courses per Course 1990 1994 1990 1994 Municipal 8.0 9.0 99,000 95,000 Moderate Daily Fee 22.0 27.5 66,000 60,000 High-End Daily Fee' 3.0 4.0 50,000 48,000 Total/Average 33.0 4 0 5 72,000 67,000 'Defined as courses charging $50+ weekend greens fee. excluding cart Source: Economics Research Associates. Table 6 FUTURE GOLF COURSE SUPPLY 1994 Golf Course/ Developer/Location Number of Holes Course Types Status Conunents City of Carlsbad Palomar Airport Road Carlsbad Pointe Resort Carlsbad 18 18 M R Subject Preliminary. The Pointe is proposing development of a golf/resort facility in Carlsbad. Project speculative at this time due to resort market conditions. Horizon Country Club Rancho Santa Fe Daley Ranch Shea Homes North of Dixon Lake Escondido Costa del Sol Wolf Industries Questhaven & Elfin Forest Road San Marcos Old Coach Golf Club Environmental Development Old Coach & Espola Roads Poway 18 18 UC DF 18 SP 27 DF Robert Trent Jones II design. I*roject in foreclosure; constmction halted. In environmental review process. 3,0(X)-acre development proposed to include 1,700 residential units. Probability of entry low within next five-year period. San Elijo specific plan—2.000 acres & 2,500 units. Plan adopted 2 years ago, no action. Very low probability of entry with golf course on former land fill. Planned community to include 156 custom homesites. 18 holes proposed to be developed initially. Robert Trent Jones D design. Table 6 (Continued) Golf Course/ Developer/Location Number of Holes Course Type Status Conunents TPC/Potomac/ Black Mountain Road San Diego 36 18 P DF A P Morro Hills Wimpey Inc. N. River Road & Vandergrift Boulevard Oceanside The Pointe Spring Valley Stagecoach Ranch Golf Ventures Inc. Stagecoach & Tavern Roads Alpine 18 SP 18 R 18 SP Golf and tennis resort/residential project to include 2 Tournament Players Courses (TPC), 400-room hotel, and 18-hole daily fee course. Phase 1 with 1,200 units and 2 TPC courses approved in 1992; Phase 2 requires voter approval. Ted Robinson design. Planned conununity encompasses 600 acres with 820 residential units. City approved March 1993; final map approval anticipated in 1995. Project is con- sidered speculative due to residential market conditions. Plan approved for 900 units and hotel/ conference center and golf course on 1,200 acres. Project is in bankruptcy. Developer (Pointe Resorts) likely to abandon. Tentative map and specific plan approved May 1994. cieyeloper must construct waste- water treatment facility which is anticipated to require 12-18 months. Total site area is 365 acres—golf course, clubhouse and tennis courts proposed for 169 acres. Project also to include 131 homes on 1-acre lots. n.a. means not available. Status: P = Proposed, A = Approved. UC = Under ConstmcUon. DF = Daily Fee, M = Municipal, SP = Semiprivate, P = Private. R = Resort Source; Economics Research Associates. Table? GOLF COURSE TURNKEY LEASE TERMS SELECTED COURSES July 19iM Course LocaUon Los Lagos/ Mesa Linda Costa Mesa Santa Anita Santa Anita Mountain Meadows Pomona Anaheim Hills (proposed) Knollwood Granada HiUs Alondra Park Gardena Lessor Lessee Agreement Date Costa Mesa Mesa Verde Partners 1992 . L.A. County Santa Anita Assoc. 1992 L.A. County American Golf 1991 City of Anaheim American Golf Proposed L.A. County American Golf 1990 L.A. County Global Golf 1984 Lease Term (years) Initial OpUon Extension 18 2-5 28 10 20 25 25 Percentage Rents Greens Carts Range Merchandise Lessons Food and Beverage , Liquor Banquet Room Rental 30/35%* 30/35% 30/35% 6% 5% 11% 11% 25% 30/50%* 30/50%* 25/30%* 5% 5% 8% 10% 35/52%* 35/52%* 33% 5% 10% 10% 12% 25% 30% 25% 25% 5% 8% 40% 40% 30% 5% 12% 25% 35% 40% 30% 5% 8% 10% 35% Required Capital Improvements' $I.938M $500,000 $2.0M $600,000 $750,000 Replacement Reserve Requirement Cost of Water 5% of greens Tenant Tenant County 10% of greens Tenant Tenant County Table 7 (Continued) Course Localion Los Verdes Palos Verdes Wiliowick Santa Ana Meadowlark Huntington Beach Rec Park, El Dorado, Skyllnks L.ong Beach Simi Hills Simi Valley Soule Park OJai Diamond Bar Diamond Bar Lessor Lessee Agreement Date Lease Term (years) Initial Option Extension Percentage Rents Greens Carts Range Merchandise Lessons Food and Beverage Liquor Banquet Room Rental Required Capital Improvements' Replacement Reserve Requirement Cost of Water L.A. County Garden Grove Huntington Beach American Golf Donovan Golf Mgmt American Golf Loiig Beach American Golf Rancho Simi Rec. Golf Enterprises Ventura County Jim Allen L.A. County Golf Corporation 1983 1980 1993 1984 1991 1984 1987 15 15 25 5 15 30 10 — 15 15 (city) 2-5 — •, — 5 20% 20% 25% ' 30% 20% 35/50%'* 30% 20% 8/10/18/25%* 30% 30% 20% 30/50% 25% 20% 25% 30% 20% 30% 5% 8% 8% 6% 5% 5% 5% — .... . 6% 5% 5% 5% 8% 5% 10% 5% 4% 9% 10% 5% 10% 7-10% 10% 5% 11% 20% — — — — — 25% — . $750,000* $3.5M $1.5M $1.0«-M $600,000 $300,000 t 10% of greens 5% of total revenue 5% of golf — (begin year 6) Tenant Tenant Tenant Tenant Tenant Tenant Tenant 'Estimates expressed in constant 1994 dollars. ^ \. ^^^^n^r *Higher percentage applied to monthly gross revenue exceeding $150,000 for greens fees. $40,000 for carts, and $20,000 for pracuce range. *Higher percentage applied to revenue from monthly rounds exceeding 8.333. *Higher percentage applied to monthly gross revenue exceeding $10,0(X). *Higher percentage applied to monthly gross revenue exceeding $4,167 *10% of greens fees, credited against lessee rental payments. 'First value: years 1-5; second value: years 6-10. "Percentages relate to years 1-2. 3-10, 11-18. and 19-25. respectively. 'Capital expenditures reauired to trigger option term extension. '•Higher percenuge applied to monthly gross revenue exceeding $50,000. Source: Economics Research Associates. Table 8 Course Locatioii SELECTED CHARACTERISTICS OF GOLF COURSE GROUND LEASES San Bernardino The Vineyard Lake Hodges El Prado Mile Square Chino Fountain VaUey Escondido Rancho Bernardo Golf Cluh San Bernardino Lessor Lessee Golf Course Type Course Length Par Parcel Size (acres) Lease Term Initial Year Option Term Minimum Annual Rent Year 1 Year 2 Year 3 Year 4 Year 5 Year 6-10 Stabilized (year)* Percentage Rents (greens/carts/range) Year 1 Year 2 Year 3 Year 4 Years Year 6-10 Year 11-20 Year 21-30 Year 31-40 Year 41-60 Percentage Rents (food/liquor) Year I-IO Year 11+ Percentage Rents (pro shop) Year MO Year 11+ City of Escondido. Cobblestone Golf 18-hole 6.400 71 120 35 years 1994 0.0% 3.0% 4.0% 5.0% 6.0% 8.0% 10.0% 15.0% 15.0% J 10% J 5% City of San Diego Gene Keluche 18-hole regulation 6.500+ 72 150 50 years 1989 $50,000 adjusted upward tiased on actuals 5.0% 5.0% 6.0% 6.0% 6.0% 8.0% 100% 12.5% 15.0% 15.0% 3%/3% 6%/6% 2% 3% Orange County Mile Square 18-hole regulation 6.387 72 120 30 years 1968 'Excludes carts and range revenues. *Adjusted to 80% of prior 5-year average. Source: Economics Research Associates. Riverside County El Prado Golf Course 36-hole regulation 6.450/6.729 72/72 250 40 years 1975 20 years $12,000 $12,000 $12,000 $12,000 $12,000 " $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 5.0%' , 7.0% 5.0% 8.0% 5.0% 9.0% 5.0% 10.0% 5.0% 12.0% 5.0% 12.0% 8.0% 14.0% 9.0% 14.0% 10.0% — 12.0% ~ 0%/4% 3%/4% 0%/4% 3%/4% ,0% 3% 0% 3% *Years 1-3 - 0%; Years 4-10 - 5%. City of San Bernardino/ City of Riverside J.G. Golfing Enterprises 18-hole regulation 5.483 70 102 35 years 1978 $11,200 $11,200 $11,200 $11.200 $11.200 $15,200 $27,600 (year 20) 7.2% 7.2% 7.2% 7.2% 7.2% 8.7% 9.2% 12.7% 12.7% 3%/7.2% 3%/9.2% 3% 3% Table9 PRO FORMA FINANCIAL ANALYSIS - BASE CASE Carlsbad Municipal Golf Course (In Current SOOOs) 1 2 3 4 5 Total TOTAL ROUNDS 50,000 60,000 65,000 65,000 65,000 REVENine Greens Fee* . $1,988 $2,457 $2,742 $2,824 $2,909 $12,920 Cam(l) 0 0 0 0 0 0 Practice Range 350 361 371 382 394 1;858 Pro Shop 250 309 345 355 366 1,625 F&B/Gtill 200 247 276 284 293 1,300 F&B/Special Events 350 361 371 382 394 1.858 Gross Revenue $3,138 $3,734 $4,105 $4,228 $4,355 $19,561 L.ess: Cost of Sales Pro Shop 163 201 224 231 238 1.056 Food and Beverage ^ 193 213 227 233 240 1.105 Subtotal Cost of Sales $355 $414 $451 $464 $478 $2,161 TOTAL REVENUE $2,783 $3,321 $3,654 $3,764 $3,877 $17,399 OPERATING EXPENSES Course Operations Salaries and Benefits $350 $361 $371 $382 $394 $1,858 Water & Utilities 330 340 350 361 371 1,752 Services & Supplies 180 185 191 197 203 956 Repl. Res.-Equip. 50 52 53 55 56 265 Repl. Res.-Course 75 77 30 82 84 398 Subtotal Course $985 $1,015 $1,045 $1,076 $1,109 $5,229 Golf Operations Pro Shop Staff $175 $180 $186 $191 $197 $929 Can Leasing -60 62 64 66 68 319 Can Maint./Siaff 60 62 64 66 68 319 ' Practice Range 75 77 80 82 84 398 Miscellaneous 35 36 37 38 39 186 Subtotal Opetations $405 $417 $430 $443 $456 $2,150 Food & Bev. Op. Expenses 248 273 291 300 309 1.421 Clubhouse Undistributed 50 52 53 55 56 265 General & Administiative Salaries & Benefits $120 $124 $127 $131 $135 $637 ! InsutaiKe 50 52 53 55 56 265 Property Taxes 0 0 0 0 0 0 Advenising/MisceUaneous 40 41 42 44 45 212 Management Fee Subtotal G&A , 126 149 164 169 174 1 782 Management Fee Subtotal G&A , $336 $366 $387 $399 $411 I $1,897 TOTAL EXPENSES $2,023 $2,122 $2,206 $2,272 $2,340 • $10,964 NET OPERATING INCOME $760 $1,199 $1,449 $1,492 $1,537 $6,436 I^ss: City Monitoring 75 77 80 82 84 1 398 ADJUSTED NET INCOME $685 $1,121 $1,369 $1,410 $1,452 i $6,038 (1) Assumes mandatory cans, included in greens Source: Economics Research Associates. fee. Table 10 REPRESENTATIVE FACILITY LEASE Carlsbad Municipal Golf Course- Base Case (In Current $000s) PERCENTAGE Greens Fees Carts (1) Practice Range Pro Shop F&B/Grill F&B/Special Events Replacement Reserve (2) INCOME Greens Fees Cans(l) Practice Range Pro Shop F&B/Ghll F&B/Speciai Events Replacement Reserve (2) TOTAL GROSS INCOME Less: Cosl of Sales Pro Shop Food and Beverage Subtotal Cost of Sales TOTAL INCOME OPERATING EXPENSES Coune Operations. Replacement Reserve Equipment Lease Subtotal Course Golf Operations Food & Bev. Op. Expenses Clubltause Undistributed General & AdministraUvc City Internal Services TOTAL EXPENSES TOTAL NET INCOME Asset Value CASHFLOW Net Present Value 7.0* • ri ~"2] 3 4 """sT" 6 71 8 9 10 a 12 13 14 IS 16 17 18 19 20 20% .25% 30% . 30% 30% 32% 32% 32% 32% 32% 32% 32% 32% 32 ft 32% 32% 32% 32% 32ft 32% 20% 25% 30% 30% 30% 32% 32% 32% 32% 32% 32% 32% 32% 32ft 32% 32% 32 ft 32* 32ft 32% 20% 25% 30% 30% 30% 32% 32% 32% 32% 32% 32% 32% 32% 32 ft 32% '32% 32ft 32ft 32ft 32% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6ft 6ft 6ft 6% 6% 6ft 6ft 6ft 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10ft 10ft 10ft 10% 10ft 10ft 10ft 10ft 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10ft 10ft 10ft 10% tOft 10% 10ft 10ft Sft Sft S% 5% 5% 5% 5% S% 5% Sft 5% S% 5% Sft Sft 5% Sft Sft Sft Sft $398 $614 $823 $847 $873 $959 $987 $1,017 $1,048 $1,079 $1,111 $1,145 $1,179 $1,214 $1,251 $1,288 $1,327 $1,367 $1,408 $1,450 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 70 90 1>1 lis 118 130 134 138 142 146 151 155 160 164 169 174 180 185 191 196 15 19 21 21 22 23 23 24 25 25 26 27 28 29 29 30 31 32 33 34 20 25 28 28 29 30 31 32 33 34 35 36 37 38 39 41 42 43 44 46 35 36 37 38 39 41 42 43 44 46 47 48 SO 51 53 55 56 58 60 61 99 123 137 141 145 150 154 159 164 169 174 179 184 190 195 201 207 214 220 227 $637 $907 $1,156 $1,191 $1,227 $1,332 $1,372 $1,413 $1,455 $1,499 $1,544 $1,590 $1,638 $1,687 $1,738 $1,790 $1,843 $1,899 $1.9S6 $2,014 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0_ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 w_ SO SO $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $637 $907 $1,156 $1,191 $1,227 $1,332 $1,372 $1,413 $1,455 $1,499 $1,544 $1,590 $1,638 $1,687 $1,738 $1,790 $1,843 $1,899 $1,956 $2,014 $99 $123 $137 $141 $145 $150 $154 $159 $164 $169 $174 $179 $184 . $190 $195 $201 $207 $214 $220 $227 65 65 65_ 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65 $164 $188 $202 $206 $210 $215 $219 $224 $229 $234 $239 $244 $249 $255 $260 $266 $272 $279 $285 $292 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - 0 0 0 0 $50 $52 $53 _ $55 _ $56 $58 $60 $6!_ $63 $65 $67 $69 $71 $73 $76 $78 $80 $83 $85 $88 $214 $239 _$255 $261 $267 $273 $279 $285 $292 $299 $306 $313 $321 $328 $336 $344 $353 $361 $370 $379 $423 $667 $901 $930 $960 $1,059 $1,093 $1,127 $1,163 $1,200 $1,238 $1,277 $1,317 $1,359 $1,401 $1,445 $1,491 $1,537 $1,586 $1,635 $423 $667 $901 $930 $960 $1,059 $1,093 $1,127 $1,163 $1,200 $1,238 $1,277 $1,317 $1,359 $1,401 $1,445 $1,491 $1,537 $1,586 $1,635 10.0% $12,742 (1) Included in greens fee. (2) Percent of greens fee revenue. Table 10 (Continued) REPRESENTATIVE FACILITY LEASE Carlsbad Municipal Golf Course— Base Case (In Current $000s) PERCENTAGE Greens Fees Cans(l) Practice Range Pro Shop F&B/Grill F&B/Special Events Replacement Reserve (2) . INCOME Greens Fees Cans (1) Practice Range Pro Shop F&B/Grill F&B/Special Events Replacemeni Reserve (2) TOTAL GROSS INCOME Less: Cost of Sales Pro Shop Food and Beverage SubtoUl Cost of Sales TOTAL INCOME OPERATING EXPENSES Course OpcraUons Replacemeni Reserve Equipment Lease Subtoul Course Golf OperaUoDS . Food & Bev. Op. Expenses Clubhouse Undistributed General & AdministraUve City Internal Services TOTAL EXPENSES TOTAL NET INCOME Asset Value CASHFLOW 211 ~'22T ~^3l ""24l 25 26 27 28 29 30 31 32 33 34 35 36 37 38 391 ' '40 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35 ft 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35ft 35% 35% 35% 35% 35% 35 ft 3Sft 35% 35% 35% ,35% 35% "35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35 ft 35 ft 35% 6% 6% 6% . 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6% 6ft 6ft 6% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10ft 10% 10% 10% 10% 10% 10ft 10ft 10ft 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% .10% 10% 10% 10% 10% 10% 10ft 10ft 10% 10ft 5% 5% Sft 5% 5% Sft 5% 5% Sft 5% Sft Sft 5% 5% 5% 5% Sft Sft Sft Sft $1,634 $1,683 $1,733 $1,785 $1,839 $1,894 $1,951 $2,009 $2,070 $2,132 $2.1% $2,261 $2,329 $2,399 $2,471 $2,545 $2,622 $2,700 $2,781 $2,865 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 221 228 235 242 249 256 264 272 280 289 297 306 315 325 335 345 355 366 377 388 35 36 37 38 40 41 42 43 45 46 47 49 50 52 53 55 57 58 60 62 47 48 50 51 53 54 56 58 59 61 63 65 67 69 71 73 75 78 80 82 63 65 67 69 71 73 75 78 80 82 85 88 90 93 96 98 101 104 108 111 233 240 248 __255 263_ ..._27L 279 287 2% 305 314 323 333 343 353 364 375 386 397 409 $2,234 $2,301 $2,370 $2,441 $2,514 $2,590 $2,667 $2,747 $2,830 $2,915 $3,002 $3,092 $3,185 $3,280 $3,379 $3,480 $3,584 $3,692 $3,803 $3,917 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $0 SO $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,234 $2,301 $2,370 $2,441 $2,514 $2,590 $2,667 $2,747 $2,830 $2,915 $3,002 $3,092 $3,185 $3,280 $3,379 $3,480 $3,584 $3,692 $3,803 $3,917 $233 $240 $248 $255 $263 $271 $279 $287 $296 $305 $314 $323 $333 $343 $353 $364 $375 $386 $397 $409 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65 65 $298 $305 $313 $320 $328 $336 $344 $352 $361 $370 $379 $388 $398 $408 $418 $429 $440 $451 $462 $474 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 . 0 0 0 $90 $93 $96 $99 $102 _ $105 $108 $111 $114 $118 $121 $125 $129 $133 $137 $141 $145 $149 $154 $158 $1Q8 $408 S419 $429 $440 $452 $463 $475 $487 $500 $513 $527 $540 $555 $569 $584 .$600 $616 $633 $1,845 $1,902 $1,961 $2,022 $2,085 $2,149 $2,216 $2,284 $2,355 $2,427 $2,502 $2,579 $2,658 $2,740 $2,824 $2,911 $3,000 $3,092 $3,187 $3,284 48.354 $1,845 $1,902 $1,961 $2,022 $2,085 $2,149 $2,216 $2,284 $2,355 $2,427 $2,502 $2,579 $2,658 $2,740 $2,824 $2,911 $3,000 $3,092 $3,187 $51,638 (1) Included in greens fee. (2) Percem of greens fee revenue. Table 11 REPRESENTATIVE GROUND LEASE Carlsbad Municipal Golf Course-Base Case Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1* 20 Ground Lease Terms Golf 0% 3ft Sft 5% 5% 8% 8% Sft 8% 8ft 10ft 10ft 10ft 10ft 10% 10ft 10ft 10ft 10ft 10ft Merchandise 0% 3 ft 3ft 3ft 3% Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Food & Beverage Oft 3ft 3ft 3% 3% Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Sft Ground Lease Incoine (SOOOs) Golf $0 $85 $156 $160 $165 $272 $280 $289 $297 $306 $394 $406 $418 $431 $444 $457 $471 $485 $500 $515 Merchandise 0 9 10 11 11 19 19 20 21 21 22 22 23 24 25 25 26 27 28 28 Food & Beverage Total Lease Incoaie 0 'A 1^ 20 21 35 36 38 39 40 41 42 43 45 46 48 49 50 52 S3 Food & Beverage Total Lease Incoaie $25 $112 $185 $191 $197 $326 $336 $346 $357 $367 $457 $471 $485 $500 $515 $530 $546 $562 $579 $597 Less: Cily Monitoring Adjusted Lease Income' 35 36 37 38 39^ 41 42 43 44 46 47 48 SO 51 53 55 56 58 60 61 Less: Cily Monitoring Adjusted Lease Income' ($10) $76 $148 $153 $157 $286 $294 $303 $312 $322 $410 $422 $435 $448 $462 $475 $490 $504 $520 $535 Asset Value @ 7.0% Cash Flow Asset Value @ 7.0% Cash Flow ($10) $76 $148 $153 $157 $286 $294 $303 $312 $322 $410 $422 $435 $448 $462 $475 $490 $504 $520 $535 Present Value O 10.0% $4,126 Table II (Continued) REPRESENTATIVE GROUND LEASE Garisbad Municipal Golf Course-Base Case Year 21 22 • 23] -24| 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 Ground Lease Terms Golf 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% 10ft 10% 10% 10% 10% 35ft Merchandise 5% 5% 5% 5* 5% 5% 5% 5% 5% 5% Sft 5% 5% 5% 5% Sft 5% 5% 5* Sft 6ft Food & Beverage 5% Sft 5% 5% 5% 5% 5% 5% 5% 5% Sft 5% 5% Sft Sft 5% 5% 5% 5% 5% 10ft Ground Lease Income ($000s) Golf $530 $546 $562 $579 $597 $614 $633 $652 $671 $692 $712 $734 $756 $778 $802 $826 $850 $876 $902 $929 $3,350 Merchandise 29 30 31 32 33 34 35 36 37 38 39 41 42 43 44 46 47 49 50 51 64 Food & Beverage - Total Lease Income 55 57 58 60 62 64 66 68 70 72 74 76 79 81 83 86 88 91 94 97 199 Food & Beverage - Total Lease Income $614 $633 $652 $671 $692 $712 $734 $756 $778 $802 $826 $851 $876 $902 $929 $957 $986 $1,016 $1,046 $1,077 $3,613 Less: City Monitoring Adjusted Lease Income Asset Value @ 7.0% Cash Haw 63 65 67 69 71 73 75 78 80 82 85 88 90 93 96 98 101 104 108 111 114 Less: City Monitoring Adjusted Lease Income Asset Value @ 7.0% Cash Haw $551 $568 $585 $602 $620 $639 $658 $678 $698 $719 $741 $763 $786 $809 $834 $859 $885 $911 $938 $967 $3,499 Less: City Monitoring Adjusted Lease Income Asset Value @ 7.0% Cash Haw $551 $568 $585 $602 $620 $639 $658 $678 $719 49,981 Less: City Monitoring Adjusted Lease Income Asset Value @ 7.0% Cash Haw $551 $568 $585 $602 $620 $639 $658 $678 $698 $719 $741 $763 $786 $809 $834 $859 $885 $911 $938 $50,948 Table 12 CARLSBAD GOLF COURSE PRELIMINARY CAPITAL COST ESTIMATE (Thousands of Constant 1994 Dollars) Component Off-Site Water/College Crossing Entry Road/Parking/Restrooms/Course Fumiture Golf Course Construction* Clubhouse' Design/Soft Costs Grow-In Maintenance Equipment Maintenance Area Contingency (at 5%) Construction Interest and Fees' Total $ 500 400 7,785 1,250 450 420 500 565 850 $12,720* 'Cleaning and grubbing, grading, irrigation system, pump station, lake construction, tees, greens and traps, turf, cart path, landscaping, bridges, other. ^Clubhouse of 6,000 square feet plus 4,000-square-foot cart storage at $125 per square foot. ••Based on 18-month construction, even draw, and 8% interest plus 2 points. ^Excludes commercial pad grading and constmction interest and fees. Solirce: Economics Research Associates. Table 13 CARLSBAD GOLF COURSE DEVELOPMENT COSTS—HIGH-QUALITY DAILY FEE COURSES* (Thousands of 1994 Dollars) Component Industry Guidelines Carlsbad Golf Course Golf Course* $4,000-7,000 $7,785 Clubhouse' $ 600-2,000 1,250 Cart Storage $ 150- 250 Entry/Parking/Restrooms/Fencing $ 200- 300 400 Maintenance Equipment Leased Leased Grow-In Maintenance $ 300- 500 420 Maintenance Facility $ 250- 400 500 Design/G&A/Other Soft Costs $ 500- 750 450 Construction Interest' $ 500- 900 850 Contingencies $ 325- 600 365 Total $6,825-12,700 $12,220* •Excludes off-sites. - 'Includes grading, irrigation system, landscape, water features, bridges, greens, tees, bunkers, cart paths, and golf practice range. ^Includes fumiture. fixtures and equipment; and personal property. •'Estimated, based on 18-month constmction period, even draw of funds, and 8% interest rate plus 2 points. Source: Economics Research Associates. Table 14 ESTIMATED CAPITAL COST AT SELECTED SOUTHERN CALIFORNIA COURSES* (Thousands of Dollars) Course/Location (Year Opened) Golf Course Clubhouse' Other* Total Tijeras Creek Rancho Santa Margarita (1990) $6,000 $2,400 $3,000 $11,400 Tustin Ranch Irvine Ranch/Tustin (1989) Redhawk Temecula (1991) The Vineyards Escondido (1993) Steele Canyon (27 holes) Jamul (1991) Old Coach Poway (Proposed) 6,500 7,400 4,300 7.700 5,800 2,500 1,000 1,200 1,350 1,000 3.500 . 12,500 4,100 12,600 2,500 2,650 2,800 8,000 11,700 9,600 •Excludes off-sites, land costs, and residential-related grading costs. 'Includes parking area, clubhouse, cart storage, and related areas. ^Includes maintenance structures, maintenance equipment, grow-in, architectural and engineering, other soft costs, constmction financing, and start-up costs. Source: Economics Research Associates. Tablets PRO FORMA FINANCIAL ANALYSIS WITH RESIDENT DISCOUNTS Carbbad Municipal Golf Course (In Current SOOOs) 1 2 3 4 5 Total TOTAL ROUNDS 50.000 60,000 70,000 70,000 70,000 REVENUE . Greens Fees $1,796 $2,219 $2,667 $2,747 $2,829 $12,258 Carts(l) 0 0 0 0 0 0 Practice Range 350 361 371 382 394 1.858 Pro Shop 230 309 371 382 394 1.707 F&B/GriU 200 247 297 306 315 1,365 F&B/Special Events 330 361 371 382 394 1,858 Gross Revenue $2,946 $3,497 $4,078 $4,200 $4,326 $19,047 Less: Cost of Sales Pro Shop 163 201 241 249 256 1,109 Food and Beverage 193 213 234 241 248 1.128 Subtotal Cost of Sales $333 $414 $473 $490 $504 $2,238 TOTAL REVENUE $2,391 $3,083 $3,603 $3,711 $3,822 $16,809 OPERATING EXPENSES Course Operations Salaries and Benefits $350 $361 $371 $382 $394 $1,858 Water & Utilities 330 340 350 361 371 1,752 Services & Supplies 180 183 191 197 203 956 Repl. Res.-Equip. 50 52 53 55 56 265 Repl. Res.-Coutse ' 73 77 80 82 84 398 Subtotal Course $983 $1,013 $1,043 $1,076 $1,109 $5,229 Golf Operadotts Pro Shop Staff $173 $180 $186 $191 $197 $929 Can Leasing 60 62 64 66 68 319 Can Maint./Siaff 60 62 64 66 68 319 Pracdce Range 73 77 80 82 , 84 398 MisceUaneous 33 36 37 38 39 186 Sut)total Opetadons $403 $417 $430 $443 $456 $2,150 Food & Bev. Op. Expenses 248 273 301 310 319 1.451 Clubhouse Undistributed 50 52 53 55 56 . 265 General St Adminisaadve ' Salaries & Benefits $120 $124 $127 - $131 $135 $637 InsuraiKe 50 52 53 55 56 265 Property Taxes 0 0 0 0 0 0 Advertising/Miscellaneous 40 41 42 44 45 212 Management Fee 118 140 163 168 173 762 Subtotal G&A $328 $356 $386 $397 $409 $1,877 TOTAL EXPENSES $2,013 $2,113 $2,214 $2,281 $2,349 $10,973 NET OPERATING INCOME $575 $970 $1,388 $1,430 $1,473 $5,836 Less: City Monitoring 73 77 80 82 84 398 ADJUSTED NET INCOME $500 $893 $1,309 $1,348 $1,388 $5,438 (I) Assumes mandatory carts, included in greens fee. Source: Economics Research Associates.