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City puts off privatizing struggling Largo Golf Course in favor of new marketing

City Commissioners have decided against privatizing the Largo Golf Course, which has failed to turn a profit in recent years.

JIM DAMASKE | Times

City Commissioners have decided against privatizing the Largo Golf Course, which has failed to turn a profit in recent years.

LARGO

Largo's struggling golf course got a reprieve: The city will continue to run the Largo Golf Course — for now.

Commissioners thumbed through options to privatize the course, but most at last week's work session said they want to wait before deciding the course's fate.

Largo bought the 47-acre golf course in 1979 for $1.25 million. Then, the goal was to preserve open space and acquire an investment that wouldn't sap city funds.

"Unfortunately," Assistant City Manager Henry Schubert told city commissioners, "the reality, particularly in recent years, has been that this course has not been self-supporting and has required a subsidy from our general fund."

And that's a serious issue since property taxes provide about a quarter of Largo's general fund revenue.

This year, the golf course needed a $200,000 infusion from the city's general fund. According to early projections, the city may have to shell out the same amount next fiscal year, with a total of $500,000 over the next five years.

The past three decades, the golf course at 12500 Vonn Road has experienced its share of ups and downs. The first couple of decades, course revenue climbed, reaching $975,000 in 1997. But then the course began to decline. A marketing study found that the course needed to be upgraded to make it profitable. So, the city spent about $2.3 million to renovate and landscape the course, which closed in April 2006 for the upgrades. The par 62 executive course reopened in April 2007.

In 2008, revenue peaked at $984,000. But expenses topped out at $1.13 million. And then revenues began to dip again.

Over the past two years, the city has cut expenses, but costs still are exceeding revenues. And last year, the city spent several months initiating new marketing strategies. Revenue dipped during the cold winter, but recent months have been more promising, according to city staff.

Mayor Pat Gerard isn't ready to throw in the towel. But she's far from confident the course will rebound.

"I think we've done some great things and we have some great activity happening," Gerard said. "But the bottom line has not necessarily moved a lot."

She and several other city leaders were willing to give the course more time to see if it bounces back.

Commissioner Woody Brown encouraged staff to use deal-of-the-day websites, like Groupon and LivingSocial, and to continue other marketing efforts.

"In my experience a lot of these efforts are not effective if you do them for three months or five months," Brown said. "But if you do them for a year or two they are extremely effective."

Gerard said she wasn't sure how the city would sustain marketing efforts with a tight budget and limited staff. But, she said, "It's either that or we start talking about these other options pretty quick."

Commissioner Mary Gray Black, who was on the commission when the city bought the course, said she was ready for the city to get out of the golfing business. She suggested leasing out the property to a private golf course operator for at least 10 years. Gerard said she wanted more information before pursuing a long-term lease, which would also require voter support.

The city of Clearwater has lease agreements at all three of its golf courses. And Kevin Dunbar, Clearwater's director of parks and recreation, sees virtually no drawbacks.

"In the case of our courses, there are no financial commitments," Dunbar said. "We actually get rent back from each of the facilities."

Last month, Clearwater's City Council approved a 20-year lease for the Clearwater Golf Club LLC to maintain and manage the Clearwater Country Club.

The contract promises the city 3 percent of gross revenues annually, which, according to projections would come to about $60,000 next year, Dunbar said. The operator is also responsible for property taxes and about $1.2 million in upgrades.

There's little risk in such arrangements, Dunbar said.

He offered one piece of advice: "Don't lease and walk away. … You have to make sure your operator, tenant or leasee is fulfilling all of their commitment, including maintaining the quality of the facility."

Lorri Helfand can be reached at lorri@sptimes.com or (727) 445-4155.

Largo Golf Course Patrons

91 percent: Prefer to play before 2 p.m.

69 percent: 60-71 years old

55 percent: Largo residents

42 percent: Play only on weekdays

Source: Survey conducted by Largo staff

Largo Golf Course patrons

91 percent

Prefer to play before 2 p.m.

69 percent

60-71 years old

55 percent

Largo residents

42 percent

Play only on weekdays

Source: Survey conducted by Largo staff



Largo Golf Course Patrons

91 percent

Prefer to play before 2 p.m.

69 percent

60-71 years old

55 percent

Largo residents

42 percent

Play only on weekdays

Source: Survey conducted by Largo staff

City puts off privatizing struggling Largo Golf Course in favor of new marketing 05/14/11 [Last modified: Friday, May 13, 2011 5:39pm]
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