St. Paul considers private management of Como Golf Course

By TESHA M. CHRISTENSEN St. Paul is considering partnering with a private company to run Como and Phalen golf courses starting next year. It’s a move the golfers at Como have mixed feelings about. “Members have concerns about how a private manager would work with the Men’s Club,” said Como Men’s League Board Member Gary Ketchel. Among the questions are: will the condition of the course remain is it is, or will new managers cut corners maintaining the grounds to save money? “Like any change there will always be apprehension and there is plenty of that here,” Ketchel said. “Others feel like it could be just what Como needs to remain viable and be here for future generations,” he added. Como Women’s League Club President Kathy Zieman questions how the city is going to save money by going with an outside management company. “By contracting out the operation and management of Phalen and Como, the city will shift the risk and expenses to a private vendor,” explained city employee Brad Meyer. In addition to removing the risk of loss, the city would also ask for a share of the profits. Plus, the city intends to ask vendors to make their own private investment into the required capital needs at the courses. “Without this private vendor option, the city would be required to start subsidizing golf from the general fund for almost $1 million a year to keep the courses open (which is not a core value of the city),” pointed out Meyer. “This subsidizing would almost certainly impact other hard hit areas of the Parks and Recreation budget (like recreation centers) or require the courses to close, which is not something the department would like to pursue.”

CITY GOLF COURSES LOSING MONEY

Over the last 5 plus years, expenses at the city’s four golf courses have exceeded revenues by at least $600,000 annually (including more than a $1 million this year), according Meyer. This year, Como is expected to lose $300,000. The number of people playing golf has gone down. This year was especially difficult at Como because the course opened a month later due to poor weather conditions. Golf rounds have decreased almost 27% since 2005, according to St. Paul Special Services Manager Susie Odegard. “After reviewing the current marketplace and the experience of other municipalities, going out to the marketplace is the only option that will allow for continued services at the courses,” said Odegard. “Losing $600,000 plus for more than 5 years is not sustainable. Ramsey County was in a similar situation, but now after a few years of operating within this model, the risk of loss is gone, and opportunities for profit are exponentially better,” said Meyer. “We are hopeful that we can experience a similar trajectory.”

PRIVATIZATION GROWING TREND

Ketchel pointed out that privatization of municipal courses is a growing trend in the industry. “In the old days, when golf was very popular, municipalities with golf courses made money almost by accident,” he observed. Ketchel's opinion is that the government is inherently weak when it comes to running enterprise-type operations. “This is where private management partnerships can help,” said Ketchel. “Private management will tweak the current business model to identify and maximize all the profit potential pieces of the golf course. These things may include looking at rate structure, staffing issues, food service potential, clothing and equipment sales, advertising, etc.” According to Ketchel, in recent years there has been a lapse in clubhouse services, such as a fully stocked Pro Shop and restaurant choices. “A private manager would most likely focus on these things not only for a profit potential, but also as services that attract golfers to the course,” he said. “Tee time sales could be improved by managing pricing better to fill open tee times at traditionally slow times of the day. Private management might do a better job of attracting and negotiating golf tournaments and leagues.”

LEAGUE MEMBERS, RESIDENTS TO BE INVOLVED

Members from the city’s parks and recreation department met with league members and local residents on Oct. 28 to discuss the Request for Proposals (RFP) process the city intends to use to solicit vendors. “It was promised that this group would be involved in RFP reviewing and subsequent contract negotiation process,” said Ketchel. “I think this was well received by most at the meeting.” “Input from the district councils and neighbors will be encouraged throughout the process, and we fully expect to continue active dialogues even after a vendor begins operating the courses,” said Meyer. St. Paul will continue to operate the successful existing winter activity programs at the courses, including cross-country ski trails and the Alpine sports program that offers ski and snowboard activities. The city intends to reassign the 20 or so affected staff to available positions at the Highland golf course or generally within the Parks Department. The private vendor may also opt to hire some of the displaced workers. Personally, Ketchel isn’t concerned that this would be bad for the Como Golf Course. “At its worst the city would show no gains in profitability,” Ketchel said. “But keep in mind that no management company is going to bid on this unless they feel strongly that they can profit. Hopefully the city will do a good job vetting any company that bids on this RFP.” During a vote on Nov. 6, City Council members agreed to solicit RFPs on a 4-3 vote. “We’re spending too much now for what we’re getting,” said District 4 City Council Member Russ Stark.