EVERETT — The two city-owned golf courses in Everett are projected in 2016 to bring in a near-record level of revenue.
Yet the long-term trend for the Walter Hall and Legion Memorial golf courses shows losses from those operations continuing to rise.
That has raised the specter that one or both of the courses may be sold, or even closed.
“Some municipalities have no courses, we have two,” Mayor Ray Stephanson said during a city council briefing Wednesday. “We need to put everything on the table.”
The city’s Department of Parks and Recreation has begun a comprehensive review of the facilities and operations at the two courses to try and reverse the trend.
“We’re doing this at a time when we’re OK, but we’re concerned about the future of golf,” said Lori Cummings, the assistant director of Parks and Recreation.
The projected loss for 2016 is a relatively small $305,000 on revenues of $4.2 million. The city’s enterprise fund that accounts for all golf finances has enough cash to cover that loss, Parks director Paul Kaftanski said.
But even with rising revenues, the net loss is expected to grow over the next five years, reaching $586,000 in 2021 under the most optimistic scenario, or $2.2 million in the worst case.
The 2016 loss reflects spending on new equipment, and the losses going forward anticipate continued equipment expenses, both for new purchases and for maintaining existing gear and facilities, Kaftanski said.
Determining exactly how much of a maintenance backlog there is will be one of the objectives of the review. Also under consideration would be how fees are structured, how courses are laid out, the time it takes to play a full round, and even whether leasing equipment makes more sense than buying it.
“Our courses are popular, but we’re ultimately looking for more options,” Kaftanski said.
One big challenge is that the city issued two bonds in the 1990s — a time when golf courses were seen as a can’t-lose investment — to renovate the course and facilities at Legion Memorial Golf Course.
The city still owes $6.8 million from those bonds and accumulated debt from losses in subsequent years. To stay current, the city needs to pay about $330,000 per year.
Even with that burden, golf operations have been mostly profitable since 2010.
“That was the first year we were able to pay back some of the principal we owed,” Kaftanski said. The exception was 2014, when exceptionally rainy weather kept golfers at home, and the city lost $68,000 on golf.
The situation in 2015 was the opposite, however, and sunny weather drew people to the links. Golf brought in a record high of $4.22 million in gross revenue, and netted $113,000 after expenses.
Another challenge is the changing demographics of golf. Research from the National Golf Foundation showed that while participation in the game fell during the recession, the younger “millennial” generations, especially those between the ages of 24-29, dropped out at a much higher rate as incomes fell.
Everett has a robust junior golf program, with 150 youth taking part in 2015, Cummings said.
But it’s also true that youth are more drawn to other sports, especially soccer and lacrosse. And an average play-through time of 4-5 hours for a complete round of 18 holes is a bit much for families with children.
During the council briefing, Stephanson pointed out that the population of golfers is aging, and that during a time of tight finances, the city is having to look at all options.
“This property is valuable, we may have to shorten some of these courses, may have to sell some to pay off debt,” Stephanson said.
Shortening is a technique some golf courses across the country have used to reduce play-through time. That could mean physically moving the tee closer to the cup, widening fairways, mowing the rough to make it easier to locate lost balls or otherwise reducing the difficulty of some holes.
How this plays out will emerge over the next few months as the department comes back with recommendations. The assumption going into the study is that the city will be able to reverse its fortunes without making drastic changes like selling off one of the courses, however.
“We anticipate having two golf courses at this point,” Cummings said.