Like many avid golfers, Rob Lucas began hitting the links by the age of six. When the Long Prairie native moved to Duluth’s Lakeside neighborhood in 2001, he quickly discovered the city’s public golf courses and now plays about two or three rounds a week at Lester Park Golf Course, along with visits to Enger and other area courses. Suffice to say, Lucas has a passion for golf, and wants to pass it on to his kids.
However, that passion is tempered by the knowledge that public golfing in Duluth has been on the decline since the turn of the century, drawing critical and worrying scrutiny from city leaders. When Lucas heard from a co-worker about the recent creation of a citizen’s advocacy group called Friends of Duluth Public Golf, he knew he had to join. As stated on the group’s website, Friends of Duluth Public Golf is a non-profit organization dedicated to preserving, protecting and promoting public golf at Enger Park and Lester Park golf courses.
“I think the group can bring ideas to the table on how to utilize a way to have the courses open for all-season access, like cross-country skiing and snow shoeing,” said Lucas. “Our board of directors have been meeting with city officials to let them know how we are coming up with ideas to make the courses profitable and self-sustaining.”
One of those city officials is Jim Filby Williams, Duluth’s director of public administration, who sees the city’s golf program, Duluth Golf, on a financially unstainable path with $2.2 million in accumulated losses backed by the general fund, and projected losses in the range of $100,000 to $200,000 per year. Driving this has been a more than 30 percent drop in rounds played at both courses, from 108,000 in 2000 to about 67,600 in 2017. Adding insult to injury, a minimum of $12 million in increasingly time-sensitive deferred maintenance is needed, with no acceptable capital financing of that magnitude readily available.
“Over the past 12 years, the city has commissioned independent studies and implemented many of their recommendations,” said Filby Williams. “But net income is still several hundred thousand dollars a year below what is necessary to cover annual operating expenses and finance borrowing to restore golf infrastructure.”
Despite this dire scenario, it was decided to keep both courses open for at least the 2018 season, said Duluth Mayor Emily Larson.
“We await some information from the newly formed Friends of Duluth Public Golf,” she said. “There are significant capital investment needs at both courses, there are shrinking golf user numbers and we have a need for additional housing growth and development on a larger scale which can drive affordability.”
In some ways, Duluth’s golf environment has reflected the historical trends at the national and state level since it broke ground on its two public courses about three decades after the first public course – Van Cortland Park Golf Course – opened in New York City in 1895. According to a report by the National Golf Foundation, from 1930 (when Duluth had Enger up and running) to 2016, the number of U.S. private, daily fee and municipal golf facilities increased steadily, with a dramatic 20-year, 44 percent growth spurt leading up to 2006 and the looming national recession. It was during this boom time that Duluth invested $4.1 million in both of its courses, adding nine holes to each. After the boom, there was less of a bust than a “slow and steady” reduction of golf courses as a natural economic response to the opening and improvement of more than 4,000 facilities between 1986 and 2005, according to NGF’s Chief Business Officer Greg Nathan.
“This gradual reduction is indicative of the market’s healthy self-balancing of supply and demand, and a trend we expect to continue for several more years,” said Nathan. “American golfers have more than 15,000 green-grass facilities where they can tee it up, one reason the contraction in supply has shown no direct impact on frequency of play, with rounds-played in the U.S. increasing each of the past two years.”
Minnesota followed the national trend with 165 new courses built during that 20-year period, said Warren Ryan, communications director and editor for the Minnesota Golf Association.
“The industry did overbuild,” he said. “This was reflected in the MGA’s membership, which peaked at 95,000 in 1999-2000, up from around 70,000 in the late 80s. For the past four or five years, it’s remained stable at around 66,000 members. The good news is, according to our research, the economic impact of golfing in Minnesota will slightly increase from the $2.4 billion it generated in recent years.”
That impact mainly comes from public courses, which make up 90 percent of Minnesota’s nearly 500 courses, higher than the national average. The state also ranks at or near the top of states with the highest golfer participation. Still, the statistics bear out that public courses are in the rough, financially. According to the National Recreation and Parks Association, between five and 10 percent of all public courses are expected to close in the next decade. There has been a 26 percent decrease in so-called value courses – those whose peak season fees are under $40 – since 1987. To stem the red ink, some communities resort to reducing the number of courses, investing in renovations to attract business, or, as in the case of Duluth, bringing in a private firm to manage failing, or marginally successful, municipal golf course operations.
Bringing in outside management isn’t a new trend, said Ryan. “Wilson Golf Management manages three public golf courses locally (Applewood Hills, Cedar Creek and Oak Glen); Foursome Golf manages Como and Phalen golf courses in St. Paul; and Kemper Sports and ClubCorp manage a few golf clubs in the state (Fortune Bay, Somerby Golf Club and Medina Golf & Country Club).”
In 2007, Duluth took its first steps toward increased private sector participation in public golf course operations. In 2015, it contracted with Billy Casper Golf (BCG) to manage the course. The city incorporated a BCG investment in capital improvements, making BCG compensation partly a function of the financial performance of the course.
“Billy Casper Golf is the largest operator of municipal golf courses in the U.S. By hiring BCG, the city hoped to improve the courses, the service and the guest experience while aiming to reduce or eliminate operating losses,” said Bill Rehanek, senior vice president of operations for BCG. “Guest NPS surveys indicate high satisfaction with the improvements and the guest experience, and financially the results have improved. Still, the courses are expected to lose money this year.”
So, what next? Rehanek thinks the dynamics of the Duluth market make it unlikely to attract or justify major investments in two, 27-hole facilities. The city would be financially hard pressed to even pick and choose specific infrastructure improvements. That leaves the 800-pound gorilla in the room.
“Having spent about six weeks looking into this with attention to detail, I believe it’s likely that the long term, greater good is best served by maintaining one course,” said Mayor Larson. “But I will reserve any formal judgement and decision making until the process of learning, community engagement and data collection are complete.”
“I would like to preserve both golf courses so I can take my kids and teach them to golf, because it’s a game that you learn something every round,” said Lucas. “The city of this size needs two courses to handle the golfers in the community. I feel that with our members’ ideas, we can keep both courses open for generations.”