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2004-09-15 Special Joint CC Golf PacketCITY OF ALAMEDA•CALIFORNIA SPECIAL JOINT MEETING OF THE CITY COUNCIL AND GOLF COMMISSION WEDNESDAY - - - SEPTEMBER 15, 2004 - - - 5:45 P.M. Location: Golf Course Lounge, Chuck Corica Golf Complex, Clubhouse Memorial Road. Public Participation Anyone wishing to address the Council /Commission on agenda items or business introduced by Councilmembers /Commissioners may speak for a maximum of 3 minutes per agenda item when the subject is before the Council /Commission. ROLL CALL PRESENTATION Presentation of Certificate of Service to Tony Corica. AGENDA ITEM 1. Work Session - No action will be taken A. Brief Opening Comments and Introductions B. Golf Course Overview C. Discussion of Golf Course Seven (7) Year Financial History D. Discussion of Golf Course presentation by Dahlin Gro ADJOURNMENT Clubhouse Project and Beverly Johnson, Mayor Sign language interpreters will be available on request. Please contact Susie Brown at 749 -5805 or 522 -7538 (TDD number) at least 72 hours before the meeting to request an interpreter. Accessible seating for persons with disabilities (including those using wheelchairs) is available. Audio tapes of the meeting are available upon request. Minutes of the meeting are available in enlarged print. Please contact Susie Brown at 749 -5805 or 522 -7538 (TDD number) at least 72 hours before the meeting to request any other reasonable accommodations that may be necessary. City of Alameda Interdepartment Memorandum September 9, 2004 TO: Honorable Mayor, Councilmembers and Golf Commission FROM: James M. Flint City Manager RE: Report on the Chuck Corica Golf Complex Seven (7) Year Financial History BACKGROUND The Chuck Corica Golf Complex is a 45 -hole golf facility owned and operated by the City of Alameda. The Complex consists of three golf courses, the 18 -hole Earl Fry Course built in 1925, the 18 -hole Jack Clark Course built in 1957 and the 9 -hole Mif Albright Course built in 1982. The Complex also includes the recently remodeled 47- stall Lucious Bateman Driving, Norma Arnerich Teaching Academy and a restaurant, which is operated by a concessionaire, Legends and Heroes. The 45 -hole golf facility generates the highest play levels in the San Francisco Bay Area. Over the last eight (8) years the annual play has averaged approximately 210,000 rounds (Attachment A). The Golf Complex contributes to the City of Alameda's General Fund yearly through the Surcharge Payments, Payment in Lieu of Taxes (PILOT) and Cost Allocation. The total contribution for fiscal year 2002/2003 was approximately $800,000 and for fiscal year 2003/2004 was approximately $780,000. FINANCIAL SUMMARY Fiscal year 1997/1998 • El Nino year, most rainfall ever, 83 rain days. • Newly renovated driving range opens, increased revenues. Fiscal year 1998/1999 • Golf Commission adopts green fee rate formula and Council approves the rates. Revenues increase. Report #1 -C 9 -15 -04 Honorable Mayor, Councilmembers and Golf Commission Page 2 of 4 Fiscal year 1999/2000 • Revenues continue to increase. • Tony Lema (San Leandro) golf course shuts down for remodel. • Attendance stabilizes. Fiscal year 2000/2001 • Banner year for revenue $5,591,832. • Earl Fry course irrigation system replaced. September 9, 2004 Fiscal year 2001/2002 • Monarch Bay (formerly Tony Lema in San Leandro) reopens to mixed reviews with much higher green fees. • Economic downturn. • Attendance and revenue begin to decline. Fiscal year 2002/2003 • Metropolitan (formerly Lew F. Gailbraith golf course in Oakland) reopens to mixed reviews and much higher green fees. • Attendance and revenues continue to decline. Fiscal year 2003/2004 • Metropolitan and Monarch . golf courses continue to discount their rates to gain a bigger share of the Bay Area golf market. • Attendance and revenue continue to decline. DECLINE IN PLAY The play levels at the Golf Complex have been in decline. In fiscal year 1997/1998 the Complex had 214,062 rounds and the fiscal year 2003/2004 there were 178,937 a decline of approximately 16 %. A number of factors have contributed to the decline. In 1998 the Friday green fees were changed to weekend rates and the Monthly Pass play was changed to allow play Monday through Thursday and Friday play was eliminated. More importantly there has been a dramatic increase in Public Golf Courses in the San Francisco Bay Area with no significant increase in golf demand. In addition to the soft economy kicked off by the 911 catastrophes. In April 2003, the newly renovated Metropolitan Golf Course in Oakland opened. The rates at the Metropolitan Golf Course were set quite a bit higher than those at the Chuck Corica Golf Complex. However, in time their rates were set lower to compete against the rates at the Chuck Corica Golf Complex. In addition, the Monarch Bay courses in San Leandro have also recently renovated and like the Metropolitan started with very high rates in excess of $80 on the weekends. Over time Monarch Bay lowered their rates to become more competitive with the Chuck Corica Golf Complex. Despite the decline in play the Chuck Corica Golf Complex continues to be the most highly utilized golf facility in the San Francisco Bay Area. Dedicates to Excellence, Committed to Service Honorable Mayor, Councilmembers and Golf Commission Page 3 of 4 REVENUE AND PLAY GENERATION September 9, 2004 A number of programs are being implemented to help bring more play to the Golf Complex. • Golf 707 -Is an Internet clearing house of discounted golf rounds. This program allows rounds to be advertised to a large group of golfers. The golf rounds are discounted and sold during the "non peak" times. The "dead times" are usually later in the afternoon and are not usually utilized. So far golf 707 has been working well. • Chuck Corica Senior Golf Club -The group was started this year by a group of local senior golfers. The group plays during the week and is steadily growing. The group offers Northern California Golf Association (NCGA) memberships to non - seniors. This enables more golfers to have golf handicaps and call the Chuck Corica Golf Complex their home course. • Golf Web Site -Staff is currently working with e- agency to set up a web site for the facility. The golf market has become increasingly competitive in the Bay Area and most of the local golf courses have a web site. Web pages will include all of the pertinent information about the Complex, including the ability to have e- commerce. • Twilight Special -$25 fee including a golf cart on weekdays has been very successful. • Early Bird Special - Allows golfers to play on Fridays with an all- inclusive package including green fees, golf cart, range balls and a meal. • EWGA -The Executive Women's Golf Association is in planning stages. This group, once established will bring many Women golfers to the Complex facilities on a daily basis. CAPITAL IMPROVEMENTS Over the last eight (8) years $4,400,000 has been spent in Capital Improvement Projects (CIP's) at the Golf Complex. The CIP list is as follows: • 1997 - Renovation of the Lucious Bateman Driving Range and the. Norma Arnerich Teaching Academy • 1999 - Addition to the Cart Storage building • 2000 -Earl Fry Course Irrigation System • 2001 - Renovation of Earl Fry Course hole #15 • 2001 - Renovation of Jack Clark Course hole #12 • Various improvements to all three courses including waste areas on the links -style Jack Clark Course. The surplus revenues have been put back in to the golf facility and the Golf Course Enterprise account has steadily increased and currently has a balance of $3.5 million dollars. Dedicates to Excellence, Committed to Service Honorable Mayor, Councilmembers and Golf Commission Page 4 of 4 SUMMARY September 9, 2004 Overall the Chuck Corica Golf Complex has been financially successful over the last few years. The Golf Department has been able to meet the financial obligations to the City's General Fund through, the Payment in Lieu of Taxes (PILOT), Cost Allocation and Golf Surcharge payments each year. An important note is that the surcharge payment to the City's General Fund has been in a slow decline. This is primarily due to the decline in Tournament play. The facilities at the Chuck Corica Golf Complex cannot accommodate the needs of Tournament groups (Banquets). In addition, the surplus revenues have been put back in to the golf facility. Approximately $4.4 million dollars in capital improvements have been made to the golf courses over the last (8) eight years. And, most importantly the Golf Course Enterprise Fund has steadily increased and currently has a balance of $3.5 million dollars. A number of factors have attributed to the success of the complex. In general, the golf course conditions are considered to be some of the best in the East Bay, public and private courses included. The rates are among the lowest in the entire Bay Area. Therefore, Chuck Corica Golf complex is considered to be a great value for the money. RECOMMENDATION This report is provided for informational purposes only. DVB:nmc Attachment A spectfully submitted, . Ban General Manager, Golf Dedicates to Excellence, Committed to Service ATTACHMENT A O O %' N LL ! c+1 I 0 N 0! OoI N -I 1 N (� 01 V / N' N ■ O • O N L.L. r (1) O • N E ro r 0: q■� u NI O o_ (la ,,, U. d): C) (1) C _O di LL1 till■ CO: r cI LL ~ L9 a.) CTV O'. T O' O LL 6: a r N. CD 0 N N N C11 N N at, N N 0 C) CO N N N co O T N CD ca 0 N $3,844,852 $3,907,509 $4,728,972 $5,364,127 $5,591,832 $5,364,907 $5,221,402 $4,965,794 000 N co r 0 MIS 0;CO a) N et O', IC) 00 ! 1. C) 0 M; C� di I� M C) M'. N M, m- O a) CO co O vr in r N M et 0 M co 0 00 Lt� T co co N. M Nr CNL vis 0 4 0 O M'ti N et '. N CM CO 0 CO N et M 0 O OC) 10 M co e (O C) CO N ; O M. N. M N er r 1� N; N O Cv) N N. M. CO O N N CO ' r E co a, a, .CD x i a i n_ X co 0 0 $4,381,751 $5,684,590 $4,805,447 $4,762,249 $4,764,854 $5,158,1091$4,112,326 $3,791,296 0 CA 0 0 N 49- M O Cn LC) - $1,313,257 - $204,817 $937,676 City of Alameda Interdepartment Memorandum September 9, 2004 TO: Honorable Mayor, Councilmembers and Golf Commission FROM: James M. Flint City Manager RE: Chuck Corica Golf Complex Clubhouse Renovation BACKGROUND In 1995 City staff submitted a plan to City Council for approval of the renovation of the entire Chuck Corica Golf Complex Clubhouse, consisting of the Restaurant, Pro Shop, Driving Range and Cart Storage. City Council rejected the plan and directed the Golf Commission and staff to move ahead in phases, a pay -as- you -go status. Therefore, the first stage of the renovation set forth by the Golf Commission was the remodel of the Lucious Bateman Driving Range and Norma Arnerich Teaching Academy. The project was completed and opened in the summer of 1997. In 1998 the Driving Range was voted as one of the Top 100 Driving Ranges in the United States. The Driving Range has been a financial success. The Driving Ranges averages approximately $800,000 per year on range fees and lessons revenues. The Driving Range project was selected to be the first phase due to the additional revenue that could be generated through the renovation. The Golf Course Enterprise Account has steadily grown despite the decline in play and the additional capital improvements over the last few years. The current balance is three and a half million dollars ($3,500,000). A portion of this money will go to fund the next scheduled phase, the renovation of the Chuck Corica Golf Complex Clubhouse facilities. CLUBHOUSE NEEDS ASSESSMENT In 2002 and 2003 Economics Research Associates (ERA) conducted a user study to determine what type of facility the users and citizens would need at the Chuck Corica Golf Complex. ERA is a renowned golf economics firm located in San Francisco. The report contains a number of important findings (Attachment A). The report included an evaluation of the current facilities at the Golf Complex. Alameda resident golfers, other patrons and staff were surveyed regarding various aspects of the complex. Opinions on quality of food, green fee prices and other in depth issues were shared and reported. ERA also reviewed banquet facilities in the East Bay and most importantly estimated a Report #1 -D 9 -15 -04 Honorable Mayor, September 9, 2004 Councilmembers and Golf Commission Page 2 of 3 warranted level of investment for the project. The following is a list of some of ERA's conclusions, warranted level of investment and recommendations. ERA's CONCLUSIONS 1. Golfers were generally dissatisfied with the condition of the clubhouse, bathroom, and banquet facilities at the Chuck Corica Golf Clubhouse. 2. Residents of the City of Alameda, 88% would support a proposal to build a new Clubhouse. Also, for non - residents, 60% would support a proposal to build a new Clubhouse. 3. For Residents of the City of Alameda, nearly 60% would prefer a higher facility quality and slightly higher fees than offered at present. However, for non - residents, only 28 % would prefer higher facility quality and slightly higher fees than offered at present. 4. Overall, slightly less than half the people surveyed (43 %) would prefer higher facility quality and slightly higher fees than offered at present. Seniors, especially, were against any form of higher green fees. ERA'S RECOMMENDATIONS • Overall, ERA recommends a medium sized golf clubhouse with about 15,000 square feet of public space (not including cart storage) • 250 to 300 seat capacity for banquet room. • 1200 to 1400 square foot pro shop. • 100 eat capacity for restaurant and bar. WARRANTED LEVEL OF INVESTMENT ERA and HARPER ERA's report established a budget, or a warranted level of investment for clubhouse improvements was based on the current year actual (2002) and projected operating revenues and expenditures. At the time of this report (early 2003) the golf course was doing quite well financially. The decline in play had started and was predicted to continue as new courses opened with more competitive rates. ERA estimated that $6,550,210 was available for a new Clubhouse. It is very important to note that as we got closer to design and construction that an updated report on the warranted level of investment would have to be done. Consultant Kevin Harper a certified public account (CPA) and past Alameda City auditor was hired in 2003 to review and report on the new warranted level of investment based on new financial data (attachment B). The updated warranted level of investment was projected on three (3) scenarios 1. Best case (business improves) 2. Most probable (business stabilizes) 3. Worst case (business continues to decline) the most probable projection in the updated report estimated $7,000,000 available for the Clubhouse improvements. However, this includes $1,530,000 in Dedicates to Excellence, Committed to Service Honorable Mayor, September 9, 2004 Councilmembers and Golf Commission Page 3 of 3 additional funding for the project from the golf enterprise. Due to the continued decline in play and revenue at the Golf Complex, staff will continue to update the current financials to project the estimated warranted level of investment for the project. It will take approximately 1 year to complete the design and produce bid documents for the project. It is our expectation that business will once again stabilize and financing for this project will not be an issue. SELECTION OF CLUBHOUSE DESIGNER In May 2003, the City issued a Request for Proposal (RFP) for Architectural Design Services. On July 8, 2003 thirteen firms submitted proposals to provide architectural/landscaping /engineering services for the clubhouse project. Two City golf staff and a Clubhouse Design Team consisting of these Alameda residents, one member from the Economic Development Commission, one member from the Men's Golf Club, one member from the Women's Golf Club, two Golf Commissioners, one local golf writer and the president of the Alameda Junior Golf Club reviewed and evaluated and ranked the proposals. The five highest - ranking firms were invited to make presentations to the Clubhouse Design Team. The Design Team selected three of those firms to make a presentation to the Golf Commission. After the second presentation, the Design Team ranked the three firms in order of preference. The order was BAR, Dahlin and HGHB. The City began a long negotiation process with BAR and were unsuccessful after numerous attempts to reach an agreement. Therefore, the City began to negotiate with Dahlin and has tentatively reached an agreement pending City Council approval in October 2004. RECOMMENDATION This report is provided for informational purposes only. DVB:nmc Attachment A Attachment B Res ectfully submitted, Bank General Manager, Golf Dedicates to Excellence, Committed to Service Attachment A is on file in the City Clerk's Office. ATTACHMENT B 4r a O J d E ♦O V O y at O E V O t Z O O CD a 1,472,557 1,653,482 0 0 O 8 08 N r N N N 33 N N N in d CU 07 N N d C C C C C g. ggggggi 0 0 - 0p��g8 MCQ LLU))00)) NO NO MN CO NN 0)Crap pq MOCON 8sp 4 C7C38 +-O �rN cc O) OCD 0 C LO O)N CON O CO N co 0 ON) CA Nn0Orr0)CD O" 04' 0 CO N CO O 0c00 0)C7 ON O) C7) (0 co oC UUNN O'CN0N cOON N. O CO N- 0) U cm ) COO g O pO O CD N N iN _ C O C o $o g) C7 CO W O CO IN V co Cm Q CO. T0)`t8g co • iO §CMN • 0 A ' 0i NN O 2 CC r ci to c CO C9 00)� TN r ACV rU) N r 01 0N0 U)°R ChO rn8�N� N o a co K co y 0. co cn e a m O `O U V C \ c c CO n CO CO O n N O O O 00))r ON CC�MNN ON0Ca)0 CO 0))NrO0)C) 0juj00 N.-: N 0))OON 0) N CCs O)U) COCO N N CO n CO COO N.O CO N n N 0 A(CgRC‘i C7 W C▪ OCQ� Ol�) �t O V C'7 N 0 N. N CO Opp 0 V. 0) N M N N.: N N O v O 0 n O O 0) ON) CO N a CO N n 00 0 O N y N -O TI 0. p C N G N O Cl) O E N y Cl) N C 8'c 0'5 Z� 0 c` CLZ Is i� E L ' a m co 0 Z a " m ca � _ 0goo o �0 o_ Cc o C m ��c d m �.E C7 y co yy — C • — N y%C .2 .r71 N = .e 8 r C C d .S 0 � N O _ a N O O..- m N O a g 'CC -a CD y 6 2. O 0 BA— 0 ¢ od¢cna30¢o Qu ¢cna� oO WOn 0. C7 4 C7 c7i N n N CN COmaQ g '1: La n N N N 000 CM N n 0) N n CO .- N R COO 0 0) N N W N N. U) m Or CO conch V co m ACV U) CA cce CA rn 0) 0) co W 0) m O V 01 0) 4,662,809 4,637,661 O N 4,391,000 4,443,570 4,619,829 Total Expenses C 2 CO 'tNCt �2 NN8 O o(0 N cc) CI N 0 0 co CO N CV N CO t6 O N 0 )OO N 0 (O CC) n) N CO N (00_ 0 co N mr C)) CO co ro 4 co O U) O ppn P9 CO U) N O a) H Ca a 2 a (i m U) CO 0 CC co • _ O N d 7 aj > .c 0 • a N a cv) 0 O O O (0 0) C7 r EE N m a � (A .m r O pO S W O O 0 CO (0 N 0) O ui v 8 0) 0) 9r N 0 O J c E o U a a` 0y ti 10 C 0: iQ 0 e V O 3 ti 2 O � .O a` 0 §00 a 0() N. CO 8.88.ao amOnc') X8.8 Q 4 N CO CO CO N 2 W n VV'' C W m .0 0 S 0) 8 r M 0 0 0 N CO 0) 8 8 8 a) C7 N n rn N a) N n N M N r C p0 8 Total Attendance Total Green Fees a, a, ri m ao CO n - continue downward trend, 0 y C0) 0 E 0 a N 0 D. EE_ c > N Nip YUU E O o as o..Z 0. 0 g N 0 °0 ° 8 N C_ 0 O1 0° o cci ' N CO 8^ v o M 0 N N ao CO NS N 32 co -8g a) 8a . m N 2 Li v$ U • CO 0 m O E3 c mm . . ) 2 E c U Q1 N 1.- �+- C cy 8 CO H 0 L `� Ca N f0d O N 0 0 E OC .0 'y , d N m m m C ppm O O U a. C C C C C y 0 00 0 O N N a� N O \ \. \ \ \ CVV T/) ... �IIi c O coc°ocoi)i)[) ccoo2Z §cCv�o cC�� a,eU)�0)CC �§ln�° CO N .- B Cn (NN�T 2T C7 L0 .- CO N CO r .- Vi a) CO .0 0 C 0 0 00 0� § 25 25n § N N i . 7O 00 8 8 0 0 0 n 0 O to 6 0.1 111 cc4 c0 8. 01 U) O N 0) CO V' 0 0 W ° N- co co COC8)N" CV r- 'Cr N C[) CO Ch 0 0 C7 o) 0 vo LO L CO 326,008 280,952 CO N Cn°CO C.) R Ia) V' CNO CV U2 ° pp g °ppp° 8 8 g pgpp tM0 M Uj CO 4 v 0, rn 0 C- 8 00) N CO 5,424,987 5,376,402 4 LO 0 8 �r) ,7 CD 111 csi LO CV 2 02 CO LO LC1 CO CO CO. t0C VO Cn C6 C9 N N N N N0)CO ° 3CCU ) U 8 O M pN N p N N T° N CI ui CO 0 0 O) W r N N CO 0N. 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