Are the golf courses at Sun City (in the aggregate) Revenue Positive, Revenue Neutral, or Revenue Negative?
That's a great question R and one that deserves an answer: Straight up they are revenue negative. We have 8 courses and play is down as is the number of golfers from years ago. But then there never was more than about 20% of the population that golfed. If there is good news, with the great weather we've had this year we are on budget. Before anyone gets too giddy, running on budget isn't the same as being revenue neutral or positive. The RCSC does subsidize golf and has for years (as they do most other clubs and amenities). The problem is golf is a very expensive proposition and though players pay a good portion of the costs, they don't come close to covering it all. Then there is the rest of the story: In the next 6 years (2014-1019), we are putting 20 million dollars into golf courses and our golf infrastructure. It's coming from the PIF which was created to cover costs to update and upgrade our amenities (and comes from our point of property sale). And let's not forget tons of Sun City homes are on golf courses and people love to live next to green spaces. While I have argued it is too much to invest, the reality is if we don't keep golf courses in great shape, it will costs us in the long run. Sun City was built as a golf course community and clearly things are changing. It is one of the reasons I have argued we need to be looking long term with some aggressive planning for the future.
While I believe being a part of community like Sun City requires paying for amenities that one does not use, I'm wondering if paying $20 million for something that is used by less than 20% of the population, while numbers continue to decline, is the wisest choice. I agree, however, that if you are going to have golf courses, then they need to be maintained lest they affect all values in the community, even the non-golf areas. I'm wondering if consolidation of the golf courses is an option? Amenities should reflect utilization and cost/benefit. It would appear that golf comes at a significant and increasing cost (e.g. water), while utilization is declining. Meanwhile, golf options outside the community continue to expand. While I don't know the deed restrictions on community land, I'm wondering if redevelopment (redeployment) of one or more of the golf courses may bring in new revenue (or reduce costs) to support new amenities and/or upgrading existing amenities. That is, it may create better alignment of amenities with current costs, tastes, and utilization. While Sun City was built as a golf community, times, tastes, costs, and the external environment have changed. Maybe doing the same thing is not the right response to these changes. Change is difficult and apathy creates inertia to change. It will take strong leadership as this type of change will create hurt feelings and evoke strong emotions. I agree that it will take looking long term and the willingness to take the road not taken at times. I'm far from suggesting a definitive course of action as I don't have all the facts, but firmly believe that all options need to be considered.
Exceptionally insightful R and of course the bigger problem/reality is that our golf courses are deed restricted. Clearly it limits our options. It was interesting in that at our last board meeting before the summer break, we were asked to amend our long term PIF budget. I agreed, but with this caveat: " Hopefully board members coming down the road will have the capacity to look at this massive golf expenditure and weigh whether it is a sound investment." I've never argued about spending money for irrigation, water distribution and much needed repairs on bunkers. Where I struggle is when we spend 5 to 6 million dollars on complete course rebuilds. There is a point where there will never be a return on investment. I'm no expert on golf courses but we know Sun City courses will always just be average in relationship to playability. The other quirk in the golf course discussion is our obligation to meet water conservation criteria set by the state due to our resolution to the Viewpoint Lake leakage. In the long run it saved us a small fortune so when we look at investing in water conservation on our courses it does have that upside that isn't readily visible. This discussion though is spot on because we all need to begin to push for long term big picture Sun City discourse. I've spent the better part of three years trying to push that peanut up the hill but sadly it hasn't moved very darn far. We are in fact a board of nine and the majority rules.
