HomeMy WebLinkAbout; Carlsbad Golf Course Market Overview Economic Proj; Market Overview and Economic Projections Golf Course; 1994-08-01Economics Research Associates
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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.