A high percentage of municipal (city owned) golf courses across the United States and specifically California are “zombie” courses, operating at significant losses and requiring taxpayers to subsidize their operations. Several of these courses have millions of dollars in deferred maintenance demanding an injection of capital to upgrade clubhouses, irrigation systems, equipment, and more. With the existing drought crisis in CA, emergency water conservation efforts, high land costs, unavailability of land, and affordability issues, is it time to reposition these zombie assets to their highest and best use for the benefit of all stakeholders? The average golf course is 150 acres with some being over 300 acres offering 9-27 holes of golf. This is a vast amount of land in key infill locations that have far greater uses.
According to Reason Foundation in a review of 221 public golf courses, “155 local governments across the U.S. lost a total of $61 million operating public golf courses in 2020.” Moreover, “amongst the 221 entities, 27 are local governments in California. And of those 27 local governments, 24 lost money operating municipal golf courses in 2020. These 24 local governments lost a combined $20 million of taxpayers’ money on their golf-related operations.”
Some potential benefits and options for the city and stakeholders are the following:
- Significantly reduce or eliminate the financial bleeding.
- Generate recurring revenues through property taxes and rental income.
- Realize a substantial gain from the sale of some or all of the land.
- Substantially reduce water consumption to address the water crisis.
- Create hundreds of thousands or more of affordable housing units across multiple sites.
- Create retail locations within the community to provide services to the residents and create jobs.
- Maintain control of some land to provide community services onsite to benefit residents such as transitional housing, daycare, work training and more.
- Convert some of the land into conventional farming or sustainable vertical farming to support the local community, generate income, and provide jobs.
- Create free amenities that more residents can utilize to increase their quality of life such as bike trails, playgrounds, sport courts, fitness zones, parks, senior and teen centers, amphitheaters, and more.
Operating costs for a golf course are substantial. In California, water service alone can cost $1,000,000 or more annually. To understand how labor and capital intensive golf course operations can be, “The largest operating loss, over $4 million, was recorded by the Indian Wells Golf Resort, owned by the city of Indian Wells. The course earned $11 million in revenue but had $15 million in expenses,” according to Reason. At a time when water conservation is critical and the state is dealing with an affordability and homeless crisis, city leaders need to consider closing down their failing golf courses or downsizing them to less playable holes to reduce or eliminate the bleeding.
These losing assets need to be repositioned to better uses to help tackle pressing issues the state is facing. There is an oversupply of golf courses with no shortage of courses to play. The state has 921 private and public golf courses that vary in size with approximately 250 of these being city owned. Cities should leave the golf course business to the private sector, especially since the supply of courses far exceeds the demand. This is one reason why so many golf courses across the United States are going bankrupt.
Maintain Open Space
How much open space should be required if these assets are repositioned? This should be site dependent, but a good estimate is 30%. For a 300 acre site, this would leave 90 acres (3,920,400 square feet) for amenities that will increase the quality of life of residents. Some may ask, “wouldn’t these alternative uses also utilize a lot of water?” Golf courses consume millions of gallons of water per day with over 90% of it evaporating and not reused. In contrast, water consumption in homes and buildings, especially newer developments are recycled and reused. Parks, trails, and open space amenities can use reclaimed water and drought tolerant landscaping. This would result in a significant reduction of water usage.
Maybe city leaders will consider some of these options and form successful private/public partnerships. California Assembly Bill 1910 which was introduced to target public golf courses to be turned into affordable housing and open space did not make it in state legislation. Assembly Bill 1910 was first introduced as AB 672 by assembly member Cristina Garcia in Los Angeles County. The bill proposed grants to local agencies to redevelop California’s municipal golf courses into affordable housing and green space. A project must meet several criteria per this bill: At least 25 percent of all new dwelling units must be for lower-income households; at least 15 percent of the development must be publicly accessible open space; no more than one-third of the square footage of the development is dedicated to nonresidential uses.
Maybe the bill will be reintroduced again with changes. Rather than attacking all public golf course at once with a new bill and face severe pushback as they have experienced, city leaders should reposition one site only as a trophy project to demonstrate the success and positive impact on the community, in hopes to pave the way for more city owned zombie courses to be repositioned in the future.
City leaders across the United States can get in contact with Danny Modab to discuss the possibilities. We have a team of premiere planning and design professionals with a proven track record in the public and private sectors with expertise in urban design, affordable housing, community master planning, community engagement, landscape architecture, sustainable and green design, public infrastructure, transportation services and more.