Another New Golf Clubhouse

By Amy B Wang The Republic | azcentral.com Fri Jul 26, 2013 6:00 AM

Seeking to pluck its municipal golf program out of a financial hole, Phoenix is exploring a 30-year agreement with Arizona State University for management of Papago Golf Course.

Under the agreement, ASU would create a non-profit golf foundation to manage Papago, covering all operating and capital expenses for Papago, the city’s third-oldest municipal course. The ASU Foundation also would have to build a new clubhouse at Papago within three years, or the agreement could be terminated.

The foundation would pay the city rent of $200,000 per year until it builds a clubhouse. After the clubhouse is completed, the rent would drop to $100,000 for the next three years, then increase to $200,000, or 20 percent of net revenue, whichever is greater. The city will still own Papago.

In exchange, the university would have naming rights to the new clubhouse and Papago would become home to the ASU men’s and women’s golf programs for team practices and up to two NCAA tournaments a year.

ASU also has agreed to continue to run Papago as a municipal golf course. That means it would charge Phoenix residents greens fees at rates already approved by the City Council and give residents access to half of tee times evenly distributed throughout the year.

“This really is a partnership,” said Rob Harman, the Phoenix parks department’s deputy director for special operations. “In terms of successfully operating a golf course and knowing what the hell they’re doing, ASU’s got the track record. They’ve been doing it for 20 years.”

A representative from ASU’s athletic department was not immediately available.

The teams currently play at ASU Karsten Golf Course, which the university plans to close and redevelop, Harman said.

The city’s Parks and Recreation Board approved the agreement last month. The agreement likely will go to the council for approval in late August or early September, Harman said.

The agreement is one of a series of steps Phoenix has taken recently to try to breathe life into its municipal golf courses. In May, the council approved 8-1 a plan to outsource maintenance and concessions of all its public courses, except Papago, to a private contractor.

The idea of a separate agreement for Papago caused concern among Phoenix golfers, who were skittish after years of what they called mismanagement the last time the city outsourced the course. The 18-hole course at Papago Park has been one of the city’s most popular.

Under a previous agreement with Phoenix, Arizona Golf Association Management LLC took over Papago in 2007 and completed a $7.8 million renovation of the course.

However, the management company filed for bankruptcy before it could construct a new clubhouse, leaving temporary trailers in lieu of a clubhouse — and droves of disgruntled golfers.

Under the AGA’s management, course numbers for Papago fell from about 62,000 rounds per year to about 30,000, said Joe Hume, a spokesman for the Papago Men’s Golf Association.

“While the economy played some role in the demise of the gross business that Papago was doing, by and large it was the AGA and their management team, along with the way that they treated everybody, that drove the numbers to the rock bottom,” he said.

Since May 2011, Phoenix has contracted with Mark Woodward, a former Mesa parks director and golf manager for San Diego, to oversee daily operations of Papago while searching for a permanent solution.

“All of a sudden, the golf-course conditions changed 180 degrees,” Hume said.

“After 2011, the course got in good shape, the management people were nice, they were receptive, they embraced the municipal golfers, and that’s when it really started to turn around for Papago.”

Hume said he would rather see ASU as a tenant than in management at Papago. Nevertheless, he was relieved to see that the ASU agreement would preserve access and rates for resident golfers and said he was hopeful it would maintain the positive changes Woodward has implemented.

“I think it’s good that ASU is going to be at Papago even under the current circumstances,” Hume said.

Phoenix’s golf courses formerly operated under a separate enterprise fund created in 1981.

In theory, that meant the program would not need support from the general fund, the taxpayer-supported fund that covers the bulk of the city’s costs, such as employee salaries and most city services.

However, over the past 13 years, the golf fund has accumulated a deficit expected to reach about $17 million by the end of 2013. Experts blamed the diminishing popularity of golf nationwide, a growing number of golf courses and the slow economy.

Last year, city officials considered shuttering some or all of the courses as an option to reverse the dire financial situation.

In March, the City Council voted to keep all the city’s municipal golf courses open by eliminating the enterprise fund, moving the courses into the general fund and paying off the debt.

That meant taxpayers will subsidize the program, much like they do other parks-and-recreation programs.