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TOWN GOALS FIT TO A TEE

North Canton, others say money not reason they run golf courses

By Bill Lilley
Beacon Journal staff writer

Published on Wednesday, May 28, 2008

When it comes to golf, North Canton Mayor David Held readily acknowledges that he has a responsibility to taxpayers.

For the past five years, the city's Fairways of North Canton course has been costing taxpayers about $250,000 annually.

But Held also believes he has an even higher responsibility.

''We're doing what's best for North Canton in the long run,'' he said. ''We are struggling a bit financially, but I have no interest in selling a beautiful asset like the golf course.

''You didn't see New York City looking to sell Central Park when it was struggling a decade ago. You won't see North Canton looking to sell the Fairways of North Canton.''

North Canton is one of seven area cities that own a total of eight golf facilities. Akron has two — the 18-hole J. Edward Good Park and the nine-hole Mud Run.

For the most part, these facilities are doing all right financially. But, like Held, officials in these cities say making money isn't the big reason to own a golf course.

''It's a quality-of-life issue,'' Akron Deputy Service Director John Valle said. ''It's like supporting the arts — you have to provide recreational activities
for the citizens.''

Held, who was city administrator in 2003 when North Canton bought the Arrowhead Golf Course and renamed it Fairways, said the purchase wasn't made as an investment in a business sense.

''We bought it as a quality-of-life issue and for the preservation of precious green space,'' he said. ''Another factor that isn't reflected in the golf course's bottom line is that the golf course and other aspects of our parks and recreation contribute overall to the economic viability of the city. You can't put a price on that.''

Downswing

These are not particularly rosy times for the golf industry.

The construction of new courses peaked in 2000, and in some states, including Ohio, more courses are closing than opening each year.

The number of golfers has dropped as well — down 20 percent from 2000.

''Golf is not a strong sport right now. It really flattened out after 2000,'' said James Ward, who has directed the golf division for the Los Angeles Parks and Recreation Department for the past three years.

Los Angeles is a national leader when it comes to municipal golf courses. The city has 13 and a golf academy.

Last year, Los Angeles courses grossed $20 million, with 1.1 million rounds played. The profit was $2 million, which was funneled back into repairs on the courses.

''We're a big city, an expensive city, and we're making money with the city running the courses, city employees working on the courses and the city collecting the revenue,'' Ward said. ''We just play so many days, and play each day from sunrise from sunset, that we do make a profit.''

Los Angeles, of course, has a huge advantage in weather over Northeast Ohio. All 13 courses were open 362 days, including Christmas, last year.

By contrast, Akron's Good Park had 141 play dates in 2006 and 134 in 2007.

Making money

Valle said the course lost $20,000 in 2006, but things turned around and Good Park made $63,000 in 2007 because of an increase in play.

''We've extended our season and increased our playing dates with intelligent planning of the courses,'' he said, pointing to improved drainage systems.

Also making money last year were Cuyahoga Falls' municipal course, Brookledge; Stow's Fox Den; and Twinsburg's Glen-eagles. Fox Den and Gleneagles both took in more than $100,000 over operating costs.

''We were thrilled to make money,'' Stow Mayor Karen Fritschel said. ''We knew it would be a challenge when we bought the course [in 2006]. And we don't count on it every year.''

Twinsburg Mayor Katherine Procop was equally pleased.

''We've had years when we lost money, but [2007] was a profitable year and we were very happy,'' she said. ''I treat the golf course as I would any other asset we own.''

The Legends course in Massillon broke even last year.

''There is a definite concern if we have a shortfall,'' said Ken Kaminski, Massillon's parks and recreation director. ''But to be able to break even and have the golf course as a huge asset to the city is wonderful.''

The Ellsworth Meadows course in Hudson netted more than $100,000 above operating costs in 2007, but capital improvements left it operating at a loss of $38,000. Hudson Finance Director Jeff Knoblauch said that loss was anticipated and $40,000 from the city's general fund had been set aside to cover it.

Akron's Mud Run also lost money, partly because it subsidizes the First Tee program for 8- to 18-year-olds.

Jeff Bollig, communications director for the Golf Course Superintendents Association of America, said it's more difficult for newer courses to make money.

''If you are an established municipal golf course in a great market, you have a great chance to be profitable along with being a great source of pride in the community,'' Bollig said. ''But if you get into the game late, you're behind the 8-ball because you're paying off the land.''

Leased

North Canton bought its golf course in 2003 for $4.2 million, using $2 million in cash reserves and borrowing $2.2 million. The city spends about $350,000 annually on bond payments and interest.

Unlike the other area cities with courses, North Canton leases Fairways to an operator for $150,000 a year.

''We were [advised] by the consultant out of Texas that we hired to lease the golf course to best utilize the property,'' Held said. ''Maintaining a golf course is a year-round deal.

''And you need experts to do the maintaining. Once you lose the greens, you don't get them back. And it's very expensive to rebuild the greens.

''We, as a city, were not prepared to operate the golf course.''

North Canton realizes $100,000 annually on the five-year lease, which expires this fall. The other $50,000 from the lease is designated for capital improvements each year.

Held has previously said that the course operator, Kevin Larizza, contends he lost $800,000 in the past two years.

Larizza, however, declined to divulge the bottom line at Fairways for 2007 because ''we'll enter into a renewal process for the lease this fall and I don't want to put all my cards on the table.''

''We took a small loss in 2007, so it's gotten better. Part of the original loss was because we had very difficult weather years in 2004 and 2005, the first two years of the contract,'' he said.

'' . . . The other problem we had at the beginning was that we went into the project thinking that Arrowhead was an established course and everybody knew where it is and how great it is. It turned out that because it had been a private course, not too many people knew what Arrowhead was or where it was. We had to do a lot more marketing than we ever imagined.''

Favors selling

Local critics of the municipal course, led by Chuck Osborne, a former North Canton councilman, call Fairways a very costly white elephant for a city that is still reeling from the loss of its biggest tax revenue producer, the Hoover Co.

Osborne would like to see the course sold.

''Ownership of the golf course by the city of North Canton will be a burden on the city indefinitely, just as it has been for the last five years,'' he said. ''At the present time, they are subsidizing the debt service on the property. After they pay off the bonds, they will have these infrastructure costs — roof on clubhouse, sprinkler system, parking lot, pool, tennis courts are or will be needed to be repaired or replaced. . . .

''It does not make sense to subsidize a losing proposition that they have over there at the expense of repairing of streets that residents have been clamoring for the city to do.''

Held said he understands that not everyone in North Canton plays golf. But he believes everyone can benefit from the city's ownership of Fairways.

''It's an absolutely beautiful place,'' he said. ''Some of the people have suggested we turn it into a park, and that's something we will have to look at it when the contract expires at the end of the year.

''But what people don't realize is that the cost of just cutting the grass each year would cost the city about $225,000. So we're actually saving that money having Kevin manage and maintain the property as a golf course.''

Open space

Akron's Valle doesn't see cities readily jumping into the golf course business as they have in the past.

''Municipally owned golf courses have reached their peak,'' he said. '' . . . You also will see more municipally owned golf courses on the real-estate block simply because a golf course is so expensive to operate.''

But Stow Mayor Fritschel said she knows what would have happened if the city hadn't purchased the 134-acre Fox Den for $5.5 million two years ago.

''We knew a big housing developer would grab it,'' she said. ''We're very committed to keeping open space in the city of Stow, and the golf course is great for that.

''We're also interested in quality of life in Stow. We knew that would not be the same if that property were developed, because it would create a big burden on traffic and the schools.''

Procop said Twinsburg also is committed to staying in the golf business.

''I see a city owning a golf course as both a business and a quality-of-life enhancement for its citizens, especially for the people in the neighborhoods around the golf course even if they aren't golfers,'' she said. ''I truly believe it's a very good asset for the city, whether it makes a profit each year or not.''

Bill Lilley can be reached at 330-996-3811 or blilley@thebeaconjournal.com.

When it comes to golf, North Canton Mayor David Held readily acknowledges that he has a responsibility to taxpayers.

Get the full article here.


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