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Wednesday, March 9, 2011

Build it and they will come (if you try to close it)

River Road Golf course has been losing money for the last decade? Can it be turned around in a year?

Because I had a rehearsal for The Dining Room, I arrived late for the public participation meeting at the Community and Neighbourhoods Committee last night. First, I had difficulty finding a parking spot, although it was after 8 in the evening. Then, when I arrived, I wasn’t allowed into the public gallery because it had reached its maximum capacity. After a few minutes, a few people left and I, and three others who were waiting, were able to enter.

The night before, at Built and Natural Environment Committee, committee chair Bud Polhill had been somewhat disparaging about the lack of public participation with respect to a number of development applications, although a couple of them drew significant input.

Certainly, public apathy was not a problem for the meeting last night. It was an animated crowd making written and verbal submissions and cheering and applauding whenever a councillor made a statement that coincided with their position.

The issue was golf, in particular, the staff recommendation to close the River Road Golf Course which, financially, has been in a losing situation for the last ten years. Doing so, staff submitted, would save $180,000 per year as well as providing additional parkland for the city which could be repurposed for more pressing recreational needs. Additionally, it would allow resources to be redirected to ensuring the viability of the two remaining golf courses, Fanshawe and Thames Valley. Only the latter has been pulling its weight in the last few years.

During the time I was on council, the issue of the golf courses came up several times. The courses, while breaking even or better, were not doing as well as had been hoped. A change was made a couple of years ago to make the golf pros full time employees, thereby making the city the beneficiary of the profits from the concessions, but still the proceeds continued to decline.

I am not a golfer so it is not easy for me to analyze the issue. Whenever I raised it, I was told that the golf courses were still making money, only not as much as before. This was attributed variously to bad weather, an economic recession, etc. My colleagues on the Board of Control were always pretty defensive about golf.

Finally, in 2010, a consulting firm was hired to analyze the matter and make recommendations. What he concluded, and what staff had also suspected, was that the situation has changed in the world of golf.

When municipal golf was introduced in London 85 years ago, it was based on the assumption that golf paid for golf. The city’s idea was to make golf affordable and accessible to working people, but that it should also be sustainable. In short, the revenues from golf should be able to sustain the game. Taxpayers should not have to subsidize the sport which is played almost exclusively by adults.

But times have changed. We have an aging population. The leading edge of the baby boom are retired and on fixed incomes. Many golf courses have opened around London and have been aggressively marketing and pricing their rounds. Much of the charity tournament business has gone to the private sector. In short, the revenue stream is not sufficient for maintaining and enhancing the courses to attract and retain business. The supply is up and the demand is down.

The weak link in the system is the River Road Golf Course. Each year, the revenues from the courses are used to cover their operating costs and contribute to the reserve funds for life cycle maintenance and capital improvements. River Road has only infrequently contributed anything to the reserve fund and in fact has not been breaking even. The shortfall has made it difficult to do the appropriate investments in the other two clubs which undermines their viability. Taxpayers have covered some of these reserve fund shortfalls to the tune of half a million dollars.

According to the consultants and city staff, the River Road Golf Course is poorly designed, making it difficult to play and some portion are unsafe. Closing it would save some $200,000 per year which could be invested in upgrading the other two courses to make them more attractive and cost efficient. For current members, there are plenty of alternatives at other public and private courses.

Although I heard only a few submissions from the public who packed the gallery, including some former members of the course as well as an outside city worker, I quickly learned that few, if any, were supportive of a closing of the course.  Loud applause and cheering followed any statement by councillors in support of keeping the course open.

Once the public portion of the meeting was closed, committee chair Harold Usher opened the floor for responses by staff followed by debate by councillors. 

General Manager Ross Fair pointed out the financials for the past 10 years. He and Bill Coxhead, Manager of Parks and Recreation, were clear that the population and market trends are not in favour of keeping this course open. At the same time, they are aware that other recreational needs are just around the corner, including the need to find space to accommodate the 600 daily soccer players whose fields at the London Psychiatric Hospital will no longer be available when the lease runs out next year. In total, 14 leases for soccer fields will expire in 2012. A property like River Road, if repurposed as soccer fields, could save $2M in land acquisition costs.

For a council hell bent on a tax freeze for the next four years, those are some hard numbers to justify spending. On the other hand, it’s difficult not to court a round of applause from the gallery.

Ward 4 Councillor Steve Orser managed it, however, and immediately moved to support the staff recommendation and close River Road. Paul VanMeerbergen seconded the motion. There were grumblings from the gallery.

Ward 2 Councillor Bill Armstrong had a very different viewpoint. “We’re in the business of making golf affordable,” he said, to an enthusiastic round of applause. “We can’t run this like a business. We’re in the business of providing a service.”

Ward 9 Councillor Dale Henderson, not a member of the committee, suggested that, contrary to the information that had just been provided by staff, golf had never been subsidized by taxpayers. He suggested that "we send a bus out" to River Road, and “make this thing pay”. 

Ward 1Councillor Bud Polhill, also not a member of the committee, was in favour of giving River Road a year to see if “we can turn it around if we run it like a business.”

Committee member Matt Brown was more critical, wanting to know what the prospects of sustainability are considering that the city is actually lowering the rates for rounds. He sounded dubious that a year’s reprieve would actually help.

Non-member Ward 3 Councillor Joe Swan harkened back to his experience on council a decade ago and suggested pulling together a citizen task force to come up with a sustainable model for a business plan. He noted that the Mayor wanted the city to be open for business, and having a great quality of life supports that.

Mayor Fontana, while he said he would be willing to give it a year, was clearly not happy. “Use it or lose it,” he warned, before moving a referral of the issue to staff to come up with a plan for making the course more attractive to golfers.

In the end, all committee members, except Steve Orser, voted to support a referral with a recommendation for a taskforce to come up with some proposals as well as some costing of turning River Road into soccer fields.

Now the matter goes to Council on March 21. How many golfers will be in the gallery that evening? How important will their applause be to those members? How many members can they attract to the River Road Golf Course.


ChrisD said...

I am discovering that as soon as something makes sense financially, Council invarianly votes the idea down. They are catering to a boistorous few. It is not the majority who paly golf. There are much better ways to spend the money. This course, as Gina pointed out, has been losing money for quite some time. Why was it not on trial with the use it or lose it philosophy years ago. As soon as we seem so close to solving a problem Council defers the solution. I don't believe that River Road is going to miraculously turn around and it will eventually close. Why does Council do the right thing now?

The proposal of using the land for soccer fields and park would certainly benefit more people and especially our youth.

Anonymous said...

Three cheers for Steve Orser, the only one on the committee with the cojones to vote against a Mulligan for River Road.

anon one

Robert Austin said...

I have been in the JLC once since it was built and have never been in any of the City's arenas or sports complexes, yet I as a tax payer do not begrudge helping share their expense. The City owned golf courses are no different than these facilities but some seem to imply that golf is frivolous and elitist. Shutting down the River Road Golf Course would be an irreversible measure so let us not make any rash decisions. A long term study might show that with the growth of the City and the retirement of the baby boomers, demand for golf within the city limits may increase. I can only speak from my own experience as a recent retiree. This winter I took indoor golf lessons at Thames Valley Golf Course and intend start golfing this spring. There were a number of fellow golf students who, like myself, had not golfed in years but intended to get back into it upon retirement. I will make a point of golfing at River Road this year. Maybe the negative publicity will result in other golfers patronizing River Road more frequently. To paraphrase the song, You don't know what you have until it is gone.

Anonymous said...

Ward 4 Coun. Steve Orser is an embarrassment to the City of London.