St. Paul’s gradual escape from the financial weight of being in the golf business is expected to take another big step.
The city is preparing to join a number of others around the metro area in buying down debt that it once hoped it could cover through golfing revenue.
St. Paul a decade ago borrowed, through tax-exempt bonds, $4.5 million to renovate its 18-hole Highland National course.
The buy-down aims to get rid of a total of $564,000 in annual payments and, in the words of City Council President Russ Stark, “stop the bleeding” from golf.
Golf has rebounded smartly this year across Minnesota under splendid weather. But cities and counties are still finding that the cost of facility upgrades isn’t covered by greens fees and the like.
St. Paul’s four municipal courses had run up a $7 million deficit over a decade before officials decided, in 2014, to offload operations of their Como and Phalen Park courses to an outside vendor, Prom Management.
Brad Meyer, director of marketing and communications for the city’s parks department, said the debt buy-down isn’t seen as a prelude to contracting out the operation of Highland National.
“If you take away the debt service payments,” he said, there’s “a very good chance to operate at a profit.”
The background reality, though, he said, is a “steady decline in the number of rounds played at our courses.” Indeed, the combined number of rounds sold for all four is more than 40,000 lower than a decade ago.
“Due to the market being very competitive,” Meyer added, “raising rates isn’t really an option, and since our costs to operate have risen with inflation, we were experiencing major deficits.”
The city’s contract with Prom Management last year kept it from losing more than $500,000 at Como and Phalen combined, to being guaranteed $60,000 in revenue and no loss.
The Highland nine-hole course, meanwhile, is joining a number of others in the area in offering FootGolf, a combination of golf and soccer, in hopes of attracting new revenue.