The Pellucid Perspective - August 2010 - (Page 12)

COURSE PROFILE Free lunch for San Francisco’s Harding Park PGA Tour trades no-cost management for future tournament millions By Jim Dunlap H ow do you compete with free? That had to be the question that incumbent course manager KemperSports and fellow bidders Troon Golf, CourseCo, Greenway Golf and Billy Casper Golf were asking themselves earlier this year when they learned that was exactly the fee that PGA Tour Properties was planning to charge to operate San Francisco’s Harding Park Golf Course. That’s right – zero, zilch, nada, plus the ongoing services of former TPC Sawgrass superintendent and agronomist Jim Abate to ensure that Harding Park would be in top notch shape THE ART, SCIENCE & BUSINESS OF GOLF COURSE MAINTENANCE. ValleyCrest Golf Course Maintenance provides the specialized organization, expertise and resources to care for the most unique and challenging of outdoor environments, America’s golf courses. As the national leader in golf course maintenance contracting, we’re a trusted steward of all manner of golf properties throughout America. 24151 Ventura Boulevard Calabasas, CA 91302 (888) 406-GOLF www.valleycrest.com Comprehensive Golf Course Maintenance to host future Tour-sponsored events such as this November’s upcoming Schwab Cup title event for the Champions Tour. And, therein lies the method in PGA Tour Properties’ seeming madness. Harding Park, after a substantial renovation earlier in this decade, has already hosted the WGC-American Express tournament in 2006 and last year’s President’s Cup event. PGA Tour Properties President David Pillsbury said the contract with California Tour Properties, the local entity of PGA Tour Properties, calls for a minimum of four more Tour events at Harding Park during the nine years and three months of the contract’s length. It seems likely, however, that there will almost certainly be more than that. OK, but why would the Tour agree to run Harding Park for free, when the city had been paying KemperSports approximately $250,000 annually to operate the course. Well, consider this. The city’s fee from the Tour for use of Harding Park at the Schwab Cup is $1 million this year. The Tour donated $108 million to charities from tournament revenues in 2009 (down from a record $124 million in 2008). Anyone out there think that Tour revenues, even after course use fees and charitable contributions, don’t absolutely dwarf a $250,000 annual management fee? And, their management doesn’t necessarily have to be wholly gratis – they will receive 25 percent of any overage if the Harding Park facility exceeds the revenue target set by the city. It was, frankly, too good a financial deal for the city to pass up. “We certainly didn’t feel that KemperSports was doing a bad job, they’ve been terrific to work with,” said Tom Hart, property manager for San Francisco’s Recreation and Parks Department. “It’s just that our department overall was facing unprecedented deficits – we had to cut $12.4 million from the general operating budget this year, and $11 million last year.” “In the end, it came down to an economic decision by the city,” said KemperSports CEO Steve Skinner. “The PGA Tour offered to run it for free. Our business model is not to operate properties without a management fee, so we decided to go our separate ways.” Pillsbury said the Tour’s decision was based on a desire to protect the Harding Park venue for future Tour events, and secondarily to enhance a funding source for San Francisco’s chapter of The First Tee, which the Tour actively supports in a number of ways, including tournament revenues in First Tee locales. “People are asking, ‘What’s the catch?” Pillsbury said. “Well, there isn’t one. We think it will be a major gain for golf and for golfers who play the facility on a regular basis.” (Well, there could be that tournament revenue thing too, but who’s counting?). One interesting sidebar story to the Harding Park contract is whether this is a unique situation or if there are other municipal venues the Tour is eyeing. “We would consider something like this in other cities that have facilities capable of hosting a PGA event if they also had a First Tee program,” Pillsbury said. In terms of other municipalities with Tour courses, that field would seem to be confined to San Diego’s Torrey Pines and Long Island’s Bethpage Black, but the concept could be expanded to other publicly owned facilities. Stay tuned. n AugusT 2010 12 The Pellucid PersPecTive http://www.valleycrest.com http://www.valleycrest.com

Table of Contents for the Digital Edition of The Pellucid Perspective - August 2010

The Pellucid Perspective - August 2010
Table of Contents
Why ANOTHER Golf Publication?
Why ‘Affordable Golf ’ Is In Retreat
July Weather, Many Markets Beat by the Heat
Funds Preparing for Course Buys
Price Is Right for Building
Chicago Market Profile
Free Lunch for Harding Park
Win, Lose or Draw?
Virtual Golf and Soccer Marketing

The Pellucid Perspective - August 2010