The city-owned New Prague Golf Club, rated as one of the best courses in the area, is reeling financially as the industry slumps. Can it stay open?
It's amazing to think back, Bryan Connelly says, about what a rip-roarin' success the New Prague Golf Club once was.
"In the late '80s and '90s, people from Bloomington were members there," the general manager of the nearby CreeksBend Golf Course recalls. "They had 600 people on their waiting list for membership. A huge development sprang up nearby, and there was hope of more money [and] more population."
How could the folks of that era have imagined the day would ever come when city officials would be studying what it what cost to shut the course down entirely at the end of this year?
Closure doesn't seem likely, but the city knows to the dollar what things like debt service and insurance would still be costing them by 2015 if it did make that choice.
For now, the course is bleeding financially. The layout, likened by a local golf guide to a private country club, has suffered the indignity of being the only south-metro course to be placed on a conservative think tank's Top Ten list of the state's biggest municipal golf "money holes."
So, what's the back story? Poor management? An ailing golf industry? The woes of New Prague and other exurban cities whose prosperity has waned?
Amid a consultant's study of staffing levels and employee pay and hours, the course's general manager isn't talking. Ken Norland refers all questions to City Hall.
Mayor Bink Bender, who is stepping down this year, isn't a great deal more talkative. Asked if he had a moment to chat, he said, "I'd rather not chat at all."
He did say there is "no intent to close it down," but the consultant "will help reconfigure the manager's position, and those of the mechanic and grounds supervisor. We're trying to see whether the present configuration is where it needs to be under today's economic conditions."
City Administrator Mike Johnson is convinced that the problem is industry-wide -- little to do with New Prague itself.
"Our peak," he said, "was in 2002," long before gas prices spiked and the housing bubble burst, and its fall has been consistent with that of other courses. "The golf industry is in some turmoil, partly because of a proliferation of courses. When you look around this area, New Prague was one of the only courses in this area at one time. Now there's a whole lot more competition."
A 2009 Star Tribune analysis, which looked at a sample of courses in 13 metro-area cities and one county, found that in a decade they had gone from all turning surpluses to the point where almost all the suburban ones were losing money. Collectively, starting from each course's peak year, rounds sold were down by about 300,000 and earnings had declined by nearly $6 million a year.
In a city such as New Prague, Johnson said, the response to the problem is an extremely delicate matter.
The city already has cut spending on the course by almost 30 percent over four years, he said, and it can't risk a downward spiral by failing to take care of it. Even shutting it down is far from risk-free, considering that costs would continue and advantages would disappear.
Located right in town, he said, it is surrounded by homes whose values could suffer if it turned into an eyesore. "It's a community asset. It has a huge, extreme impact. It's been a pride and joy of this community for many years."
Hanging over the whole discussion is the issue of where the state's politics are heading. A lot of small towns are heavily subsidized by state aid, which is helping them prop up money-losing amenities such as golf courses.
Republican gubernatorial candidate Tom Emmer's running mate, Annette Meeks, a Metropolitan Council member appointed by Gov. Tim Pawlenty, founded the Freedom Foundation of Minnesota, the conservative think tank that ripped the municipal golf industry. Meeks has said she believes a lot of city officials who threaten to cut police and fire staffing are at the same time protecting their golfers and their hockey teams.
Asked whether -- as some in town charge -- layoffs are in prospect as the city dishes out nearly $100,000 a year to keep the golf course going, Johnson said: "That would mean trying to outguess what legislators will do in 2011. Our state aid this year is $513,000, about 14 percent of our budget" -- a far cry from the 30 to 50 percent that some small towns rely on, but still a scary thing to lose.
Johnson says the course comes close to breaking even, other than debt service. But private golf course owners say that's often the case with the more financially troubled municipal courses.
"They took on debt renovating the clubhouse," says CreeksBend's Connelly. "A lot of clubs did; thankfully we have not. When times were good they wanted to keep up with everyone else and spent money, and that can overextend you. When the market's bad it can set you up for failure."
"The Hacker's Guide," a local rating service on golf courses, rates the New Prague course as an 822, well above CreeksBend's 703 and higher too than its rating for nearby courses in Jordan, Northfield and Montgomery. Connelly praises the city course as "very well run" but worries about its future.
"We've added a fire station and water treatment plant. A lot's goin' on in this little town -- a lot of money is being spent. People are asking, 'property values are down, why are taxes still up?' But as for golf, it's just a tough business right now."
David Peterson • 952-882-9023