The St. Paul (Minn.) City Council voted to let the parks department move forward with drafting a request for proposals to find a private operator for the in-the-red golf courses. A spokesman for the parks department referred to the move as “kind of a last resort,” after a three-year-long effort to fix the golf courses’ financial woes under the “Compete St. Paul” ordinance.
If all goes according to plan, St. Paul Parks and Recreation will find a private partner for Phalen and Como golf courses in time for the 2014 golf season, the St. Paul-based Lillie Suburban News reported.
The St. Paul City Council voted on November 6 to let the parks department go forward with drafting a request for proposals (RFP). The measure passed by one vote. The next step is for parks to present the city with the RFP document itself. If the council approves the RFP, the parks department can start accepting proposals, the News reported.
The move to find a private partner comes after years of the courses operating in the red. Brad Meyer, spokesperson for St. Paul Parks and Recreation, said the city-owned golf courses were once self-sustaining, but since 2008 the four courses have gone a total of $5 million into the red, the News reported.
C&RB reported that the city began considering privatization in October (“Privatization Considered for St. Paul, Minn. Courses”).
Meyer called the move to find a private partner “kind of a last resort,” after the parks department tried to readjust and make up for the courses’ lost revenue in a three-year-long effort under the “Compete St. Paul” ordinance. The ordinance requires that underperforming, non-essential city services be assessed and changed to try to fix the problem, the News reported.
Phalen and the other city-owned courses have dipped into the city’s special funds pool for revenue support, and “that pool is in effect dried up,” Meyer said.
Phalen Golf Course was first established in 1917 and has been the home to golfing families for decades. The fairways are lined with century-old oak trees that run along an old streetcar track and compliment the well-manicured greens and tee boxes. The 6,100-yard golf course has seen several improvements, and today the par 71 layout is considered one of the top-flight municipal golf courses in the state, the News reported.
Dan Bostrom, who represents Ward 6, where Phalen Golf Course is located, opposed the move to go ahead with an RFP, suggesting it’s too soon to find a private partner. “I think we’re flying by the seat of our pants,” Bostrom said. “There are so many unanswered questions that I think need to be answered.”
Phalen accounted for about $178,000 of the city golf program’s deficit spending last year, with Como being somewhere around $250,000, the News reported.
“I don’t get how privatizing those two courses is going to come anywhere near covering that kind of deficit,” Bostrom said, which last year was over $1 million.
Amy Brendmoen, who represents Ward 5, where Como Golf Course sits, also expressed concern over the hastiness of the move to RFP, but voted in favor of going ahead with it, saying that she’s “convinced that providing golf has become too expensive.” She noted there was still time to adjust, the News reported.
“We still have options to stop doing this or make another choice should the solution not be found in this RFP process,” Brendmoen said.
If the RFP idea goes through, the city would negotiate with the partners to have a revenue-sharing agreement, Meyer said. The city would maintain ownership over the land and the buildings, and would still be providing winter services, such as cross-country skiing facilities, the News reported.
Mike Hahm, director of St. Paul Parks and Recreation, noted at an October city council meeting that private partnership on golf is common elsewhere. “These management models are in place and performing successfully in other places,” he said. The bottom line is that “all four (city-owned) golf courses are losing money,” Hahm added.
Hahm told the council in October that he’d gotten a number of calls from private golf course managers. “All indications are that there’s an interest.”
Todd Hurley, who works in the city’s financial services department, said “golf courses across the board have lost money,” noting that Highland National lost about $200,000 in 2012. The city sold tax-exempt bonds to make improvements at Highland National, and because of that, he said, it’s not possible to do a private partnership for that course until the bonds mature in 2025, the News reported.
“We can not continue to let the golf courses bleed to the tune of a million dollars a year,” Hurley said.