Apple Valley is banking on a new plan to turn around a city-run golf course beset by a string of deficits over the past decade.
The city adopted a 10-year plan for Valleywood Golf Course in July that would shift $3.8 million in tax revenue from other areas to cover outstanding operating debt and the balance of a clubhouse construction project stretching back to 2012. The city also wants to spend $3 million for course improvements and a new irrigation system.
Valleywood opened in 1976 and now has 18 holes and a driving range. It comprises 190 acres, or 21% of the city's parkland. About 31,000 rounds are played there yearly.
"The golf course is more than just a golf course," said Eric Carlson, Apple Valley parks and recreation director. It's a community asset, he said, that also hosts high school sports and employs residents.
The plan includes installing new signage and gradually increasing the number of private, catered banquet events, which could draw extra money. The plan recommends that city staff run a concession stand that also sells liquor. Until recently, a vendor served on-site food and drink.
"Getting the food and beverage on track was a large piece of the puzzle we needed to solve," Carlson said.
City officials hope the course also will save money and water by replacing an outdated irrigation system.
The plan is designed to make Valleywood more attractive to golfers, which could include adding "forward tees" so less-skilled golfers can tee off closer to the holes, and replacing the driving range netting. The plan also recommends raising greens fees and hosting other potentially profitable activities, such as lawn bowling.
Carlson said the goal is to have revenue exceed expenses by 10%, with the plan counting on at least 155 "effective golf days" each year and assuming 30,000 rounds of golf played annually.
Warren Ryan, the Minnesota Golf Association's communications director, said the primary goal of a municipal course is not necessarily to generate profits but to create an affordable place that attracts a wide array of people to the sport. He compared golf courses to city-run recreation centers and parks.
City Council Member Ruth Grendahl called the plan "fluff" and "so basic" that "we should have been doing it all along."
"It needs way more detail and way more fleshing out," she said, adding that she didn't think the city should have to give $150,000 from the liquor fund to the course each year.
Council Member Tom Goodwin called the course a "huge asset" but said making the plan work would be a huge challenge.
"None of us are excited about taking a look at something that hasn't performed as well as [it] should," said Mayor Clint Hooppaw. "And yet this is an honest look at how we're doing."
Hooppaw said the course's future will warrant further discussion if the situation doesn't improve.
The nearly $7 million the plan proposes taking from other city sources would come from municipal liquor store profits, park dedication funds and a pot of money used for future capital projects.
The new irrigation system alone is estimated to cost about $2 million, Carlson said.
A bright spot for golf was 2020, a profitable year for many courses as the pandemic-weary gravitated toward outdoor activities. Golf courses across Minnesota reported that rounds were up an average 29.7% over the year before, according to the Minnesota Golf Association.
"Golf saw a resurgence not only in participation but in interest [in 2020]," Ryan said.
But the loss of large events meant few banquets were held, which "hit the golf courses pretty hard," he said.
Valleywood's operations turned a $180,000 profit in 2020, and the course is on track to do even better this year, Carlson said.
Carlson said he'll closely monitor an array of factors once the plan takes effect, such as total rounds played, gallons of water used and revenue per round from the driving range. .
"I do think there's some pressure, and the pressure's fair," he said. "We'll do the very best we can."
Erin Adler • 612-673-1781