BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY. REQUESTED BY: DEPARTMENT: PREPARED BY: Name: Board of County Commissioners (BOCC)

Transcription

1 7C ADDITIONAL ITEM BOARD OF COUNTY COMMISSIONERS AGENDA ITEM SUMMARY PLACEMENT: REQUESTS AND PRESENTATIONS PRESET: 10:00 AM TITLE: MARTIN COUNTY GOLF AND COUNTRY CLUB WORKSHOP AGENDA ITEM DATES: MEETING DATE: 10/21/2014 COMPLETED DATE: 10/9/2014 COUNTY ATTORNEY: 9/29/2014 ASSISTANT COUNTY ADMINISTRATOR: 10/6/2014 REQUESTED BY: DEPARTMENT: PREPARED BY: Name: Board of County Commissioners (BOCC) Name: Procedures: None EXECUTIVE SUMMARY: Parks and Recreation Richard Singer National Golf Foundation To provide a workshop presented by the National Golf Foundation relative to the August 5, 2014 Board of County Commissioners approval to complete a study of the Martin County Golf and Country Club (MCGCC). APPROVAL: ADM LEG ACA ACA CA BACKGROUND/RELATED STRATEGIC GOAL: 80639d74 1 of 87

2 On June 3, 2014, the General Service Department brought forward an agenda item to discuss the assistance requested from the MCGCC relative to the inspection and repair of the building conditions. On June 17, 2014, the BOCC approved the draft Mutual Termination of July 17, 1992 Golf Course Lease Between Martin County and Martin County Golf and Country Club, Inc. and an Agreement for Interim Golf Course Management and Operation of Golf Course. The Agreement provided for the Country Club to continue operation of the public golf course for an interim period while the County prepared options for the BOCC to consider as it relates to operations and management. On June 30, 2014 the MCGCC board unanimously approved to enter into a six (6) month Agreement for Interim Golf Course Management and Operation of Golf Course. The management agreement was effective July 1, 2014 and ends December 31, On August 5, 2014, the BOCC provided the following direction: 1. Move that the board approves a budget transfer from the Golf Course Fund Reserves for $17,500 to complete the study with the National Golf Foundation and designate the appropriate County staff to work with the MCGCC. 2. Move that the board approves staff work with the Purchasing Division and create a Request for Letter of Interest (RLI) to outsource the management and operations of the golf course and include the Martin County Golf and Country Club, Inc. board in an advisory capacity. Richard Singer, Director of Consulting Services from the National Golf Foundation will provide the BOCC recommendations for the Martin County Golf and Country Club as summarized in the attached report. Mr. Singer has met with County Commissioners, County Officials (General Services, County Administration and Parks and Recreation), Martin County Golf and Country Club staff/board members, etc. to help produce the attached report. ISSUES: Summary of general issues: 1. The 2004 Master/Business plan is more than ten (10) years old. The golf market is different today than it was in 2004 as referenced by the discussion at the April 24, 2012, BOCC meeting. 2. While some of the proposed CIP projects from the 2004 Master/Business plan were complete; the clubhouse, lockers, restrooms and halfway houses that are essential to increase and maintain membership have not been completed. 3. The golf course currently operates without a general manager and staff takes direction from a volunteer board that meets once a month. The golf course board is only able to discuss business during its publically advertised monthly meetings which is a challenge for an operation that relies on revenue to cover operating costs. Determining the most effective method of operation going forward is important to the overall plan d74 2 of 87

3 4. The MCGCC has discussed that its future role relative to the golf will be in an advisory capacity. The MCGCC goal is to become a future partner with the BOCC regarding the facility operations. 5. There is just over two (2) months remaining with the six (6) month temporary Agreement for Interim Golf Course Management and Operation of Golf Course. Legal Analysis: This item has been reviewed by the County Attorney s Office however the item is solely a request for policy direction from the BOCC. RECOMMENDED ACTION: RECOMMENDATION Move that the Board accept the National Golf Foundation report as presented. ALTERNATIVE RECOMMENDATIONS Move that the Board provide further recommendations to the National Golf Foundation report and provide staff appropriate direction. FISCAL IMPACT: RECOMMENDATION n/a ALTERNATIVE RECOMMENDATIONS n/a DOCUMENT(S) REQUIRING ACTION: Budget Transfer / Amendment Chair Letter Contract / Agreement Grant / Application Notice Ordinance Resolution Other: ROUTING: X ADM _ BLD _ CDD _ COM _ ENG _ FRD _ GMD _ GSD _ ITS _ LIB _ MCA _ MPO _ PRD _ USD X CA X ACA X LEG 80639d74 3 of 87

4 4 of 87

5 5 of 87

6 6 of 87

7 7 of 87

8 8 of 87

9 9 of 87

10 10 of 87

11 11 of 87

12 12 of 87

13 13 of 87

14 14 of 87

15 15 of 87

16 16 of 87

17 17 of 87

18 October 1, 2014 Tel: (772) F. Chandler Doolity Horticulturist Parks & Recreation Department Martin County 2990 S.E. Dixie Highway Stuart, FL Re: Review of Martin County Golf & Country Club Dear Chandler: The following letter comprises a summary of National Golf Foundation Consulting s ( NGF or NGF Consulting ) review of the Martin County ( County ) golf program, specifically related to the operation of the 36-hole Martin County Golf & Country Club ( Martin County GC or MCGC ). This summary is based on my review of this property in the summer of The August-September 2014 site visits included a comprehensive inspection of the MCGC and meetings with senior golf staff and other County officials and representatives of Martin County Golf & Country Club, Inc. In addition, the NGF team collected other information to assist with our review, including NGF market research, NGF golf facility research, in-market competitive data, and data collected from previous engagements in the County dating back to This review includes a strategic look at the County s overall municipal golf offering, with specific focus on the recent performance of Martin County GC in light of the recent closure of several structures on site, and the subsequent decision of the Martin County Golf & Country Club, Inc. Board to relinquish control of the property. A key focus area for the NGF in this review is to help the County establish the appropriate operating program and mix of amenities that will best fit the golf market in Martin County, considering the recent decline in golf demand and struggles of local golf courses. The ultimate goal is to help Martin County create a more sustainable County golf facility for the long-term future. This NGF review was managed by Richard Singer, MBA, NGF s Director of Consulting Services, with assistance from Barry S. Frank, Senior Associate Consultant. This letter is presented to provide a summarization of the NGF review, detailing the main findings and NGF recommendations for Martin County in the continued operation of MCGC. We note that the findings and recommendations made by NGF are reflective of a limited view of the operation, and are based on both on-site findings and our extensive experience in reviewing municipal golf facilities, both locally and nationwide. In summary, NGF finds that Martin County is essentially operating what can best be described as a municipally-owned private club. The NGF recommendations contained in this report are designed to help the County transition this facility into a more modern municipal golf course, which the NGF believes will be more sustainable for the longer-term future. As such, much of our recommended program is based on creating a facility operation and package of amenities that better resembles a municipal golf course, as opposed to a private country club. This would even include the name of the facility, which we recommend be changed from Martin County Golf & Country Club to Martin County Municipal Golf Course. NATIONAL GOLF FOUNDATION CONSULTING, INC. A Subsidiary of the National Golf Foundation 1150 SOUTH U.S. HIGHWAY ONE, SUITE 401, JUPITER, FL (561) FAX: (561) of 87

19 NGF SUMMARY AND 2014 ACTION PLAN The Martin County Golf & Country Club has been operated for 40+ years by an entity known as Martin County Golf & Country Club, Inc. ( Golf Board ), which is a volunteer group of avid golfers at the facility. This Golf Board has done a good job in managing the facility as directed by the County, keeping operating expenses at a minimum so as to provide very low cost to golfers. In , MCGC generated between $1.7 and $2.0 million in annual revenue, and by 2014 had accumulated $1.0 million in reserve funds. However, as our review will show, the Golf Board s strategy has led to some severe condition of property concerns, up to and including the 2014 closure of two key structures on property the locker room and restaurant buildings. It was the closure of these buildings that led directly to this NGF engagement in The NGF sees this review period as an ideal opportunity for Martin County to press the reset button on the entire golf course operation, and have a fresh start for the facility. In preparing this report for the County, NGF has divided our recommendations into immediate action items and long-term planning for the property. We note that the immediate recommendations represent urgent items that should be acted upon immediately by the County. We understand that the present operating structure is proposed to be in place until the two parties complete an easy transition on January 1, However, the situation and property conditions documented by NGF warrant a change in operation to commence sooner than January 1. The following is a summary list of NGF recommendations and immediate action steps for the County to undertake in the Fall of More detail and formal support for these recommendations is contained in the body of this report. We note that one of the immediate action items is for the County to begin a process of long-term planning for the future of the property, keeping in mind that 36 holes may not be the best configuration for this facility and that airport / FAA regulations will hinder broader development of this property. Martin County Immediate Action Items Action items for the County to undertake immediately using MCGC reserve funds include: 1. County should assume control of MCGC while a new long-term plan is created. 2. Use third-party contracting for maintenance services and/or pro shop labor. 3. Discontinue the Golf Board and replace with a Citizen Advisory Committee. 4. Re-name and re-brand the property as Martin County Municipal Golf Course. 5. Demolish the locker and restaurant buildings. 6. Bring in temporary facilities (modular) for restrooms and snack area. 7. Enhanced use of the marketing and technology systems in place. 8. Restructure fees with Red-White / Gold-Blue segmentation. 9. Implement new Gold-Blue availability policy. 10. Review responses to the County s Golf RFI and prepare a long-term plan for the site, mindful of local golf demand and airport proximity restrictions. The NGF fully expects that action on the above-noted items will help the County take the appropriate first steps in modifying the golf course operation into a more open and welcoming public golf facility that can be enjoyed by a maximum number of County residents and visitors. This plan will also help the County preserve the golf facility and continue its function as the most affordable public golf course in this market. MCGC is the only municipal golf course in Martin County and it is the NGF s recommendation that it be allowed to change so as to better serve this function. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 2 19 of 87

20 Martin County Long-Term Recommendations The above action items represent NGF recommended activities for immediate attention. As these changes are implemented, it is the recommendation of NGF that the County prepare a longer-term master plan for the MCGC property. This plan should be completed with significant public input, as it is a key piece of the County s infrastructure and affects nearby properties. Ideas related to the long-term plan include: 1. Begin the long-term planning process with a charrette that includes County staff, Commissioners, citizens and a qualified land planner and/or Golf Architect. 2. Define specific property uses and potential mix of (allowable) elements to be included in MCGC site plan. 3. Examine the viability of moving the entrance of the MCGC facility west to Dixie Highway, considering the logistics of existing uses proximate to the Dixie / SE Normand St / SE Indian St intersection(s), and possible airport / FAA restrictions. 4. The NGF review suggests that the new MCGC will work best for the County with: a. 18 holes of regulation golf b. 9 holes of shorter-length, or executive golf c. Enhanced driving range / practice center (possibly with lights) d. Modest 6,000 to 8,000 sf clubhouse with public golf course program e. Open air, outdoor tournament/event pavilion f. Professional golf management and maintenance on site 5. Include a vibrant volunteer program allowing golf privileges in exchange for services. 6. Enter into a site lease for the long term operation of the MCGC, only if new lease partner will bring capital to the redevelopment project. The lease is desired so as to remove the County from direct operation of the facility. Summary Conclusion The NGF review has highlighted the importance of the MCGC to a large segment of the County s residents and seasonal residents. The facility is presently providing a service of lower fee golf to residents not able to afford the higher-priced private country clubs in the market, and others seeking an occasional good quality round of golf on an affordable golf course. While the data reviewed by NGF suggests an overcrowded golf market in Martin County, we still believe there is a place for the continued operation of a County municipal golf course, provided that the facility is operated and maintained properly, with professional on-site management and ultimate authority in County administration. The operation of the MCGC has traditionally been restrictive, and it would benefit the County to open the facility up for the widest possible use and enjoyment, and to become a catalyst to increase golf participation and grow golf in Martin County. The recent change in operation has given the County a great opportunity to re-think the golf facility, its place within the overall County offering, who it should serve and what physical structure should be in place. The findings and recommendations contained in this report have been provided to help Martin County create a sustainable golf program that can be a point of pride for the County and its citizens. We sincerely hope the information provided by NGF is useful in this endeavor and that we have helped the County to improve its unique and historic municipal golf course. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 3 20 of 87

21 SECTION 1 REVIEW OF MARTIN COUNTY GOLF COURSE The Martin County Golf & Country Club is a 36-hole public golf facility located in Martin County, Florida in the City of Stuart. The facility includes 36 holes of golf, three separate clubhouse buildings (locker room, restaurant, pro shop), a driving range and other basic amenities commonly associated with public golf courses. The 36-hole layout includes two separate and distinct 18-hole golf courses with differing design and quality, although at present the County does not segment pricing between the courses. The facility is operated via lease agreement with Martin County Golf & Country Club, Inc. ( Golf Board ), which is a volunteer citizen group made up primarily of avid golfers at the facility. This entity has operated the golf course for approximately 40 years, until a recent voluntary lease termination by the Golf Board in The MCGC is now operated via temporary lease with the Golf Board through the end of December Location and Access Martin County GC is located in the northern part of Martin County, just to the southeast of the City of Stuart in immediate proximity to Martin County s Witham Field Airport. Access to the facility is via SE St. Lucie Blvd., which connects to SE Ocean Blvd (A1A) approximately 1.5 miles north of the facility (just before the bridge to Sewall s Point and Hutchinson Island). There is also a SE St. Lucie Blvd. intersection with SE Indian St. just less than one-half mile from the golf course entrance. The entrance access to the golf course is bounded almost entirely by residential elements. The course is generally convenient from SE Ocean Blvd., SE Monterey Rd and SE Indian St, all connecting to Dixie Highway, which is a primary north-south surface arterial in this part of the County. A small westerly piece of the golf course (presently the back nine of Gold-Blue) is only a few hundred yards from Dixie Highway, although the entrance to the golf course is further east as noted. This location offers mixed findings for Martin County in the continued operation of Martin County GC: Positive Aspects The location in eastern Martin County is in immediate proximity to the Intracoastal Waterway and local residences. Ease of connection to the area s main roadways such as SE Ocean Blvd., Dixie Highway, Monterey Rd. and U.S. Highway 1. Negative Aspects Although accessible to major roadways, the course is not immediately proximate to these roads, particularly Dixie Highway and U.S. Highway 1, the most important north-south thoroughfares in the eastern part of the County. There is no signage helping golfers less familiar with the golf course find the site. The two most important intersections in need of golf signage include the SE Ocean Blvd. / SE St. Lucie Blvd. intersection and the SE Indian St. and SE St. Lucie Blvd. intersection. The proximity to the airport and the FAA-mandated Airport Impact Zones limits activities that are allowable on the golf course site (more later in this report). The facility s location is not proximate to area hotels and the majority of play is expected to come from the local market. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 4 21 of 87

22 Gold Course Red-White Course Blue Course Google Earth image showing the 262-acre MCGC and immediate surrounding elements. The configuration shows the proximity to the airport and expected limits on the options that may be allowable in site redevelopment. The southwest portion of the property does come close to Dixie Highway, opening up possibilities for re-configuring the entrance, but existing elements would have to be relocated. MCGC Facility Review The initial development history of the course is not known, but the original 9 holes were believed to be developed in the 1940 s (original architect is unknown). In 1951, golf course architect William B. Langford designed 9 new holes to create the first 18 holes on the property (this is now known as the Red - White course). According to County officials, this original Red - White golf course may have been part of an original Hanson Grant of property to the County, specifically for use as recreation purposes only. A summary of the Red-White course scorecard: Yardage Rating Slope Par Blue Tees 6, White Tees 6, Gold Tees 5, Red Tees 5, National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 5 22 of 87

23 In the late 1970 s, the Blue course (located on the southwest portion of the property) was designed by Lakeland-based golf architect Ron Garl. In the mid-to-late 1980 s, Mr. Garl designed the final 9 holes that is known as the Gold course (located on the northern section of the site). Found below is a scorecard summary for the Gold-Blue course. Yardage Rating Slope Par Blue Tees 6, White Tees 5, Gold Tees 5, Red Tees 4, The resulting golf layout presents some unique and challenging golf holes, resulting in two distinct golf courses. The Red-White course is considered an open and forgiving golf course and appeals to the higher handicap player. Due to this course s proximity to the clubhouse, walking is allowed at any time as well as 9-hole play. The Gold-Blue course utilizes more water features, native vegetation and a moderate amount of topography to provide a more challenging golf layout. The Gold-Blue course is located primarily on the northern and southwestern boundaries of the property and golf carts are required at all times. Both courses have slope ratings (measure of difficulty) that show the golf courses as easier to play than standard. Over the years, NGF has found that courses that are more difficult to play and result in more lost golf balls tend to host fewer rounds than easier golf courses. Clubhouse Complex / Structures Review The clubhouse complex at MCGC is comprised of 3 buildings the golf shop, the restaurant and the locker rooms. The clubhouse was developed in various phases and has been expanded over time to its current configuration. A County report on the clubhouse notes that the original building was constructed approximately 50 years ago and the newest phase was completed approximately 10 years ago. In early August 2014, the restaurant building and locker room facility were closed due to poor condition and long-term deterioration. Only the pro shop building remains open and useable and the facility is now being operated solely from this structure. The locker room building is connected to the restaurant building via a covered open-air breezeway. The men s and women s locker rooms contain a total of approximately 400 full-size lockers as well as restrooms and limited shower facilities. The number of lockers available at the MCGC exceeds what is typically found at many private clubs, let alone a municipal golf course. The restrooms inside the locker room building are the only restrooms in use for the clubhouse facility. MCGC also has a small halfway house for F & B service on the golf course and there is a cart storage building located approximately 100 yards southwest of the clubhouse. NGF understands this is the newest building on the property. According to staff, this building was rebuilt after it was damaged by hurricanes in 2004 and Our review of the facility and financial performance suggests the existing clubhouse program may not be the best fit for this facility. Golfers do not appear to utilize the full-service lounge and restaurant (seating capacity for approximately 60 to 75), as F & B revenue is very low. This golf operation could be adequately served by a more modest F&B structure that is better suited to the facility clientele. The MCGC complex does not include any type of large covered outdoor seating area that would be beneficial for tournaments and events. Even though most of the lockers are rented out annually for the modest fee of $60 per year, the space allocated to this use does not match a public golf course program. The closure of the restrooms and locker rooms necessitated bringing in temporary restroom facilities. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 6 23 of 87

24 The current condition of the clubhouse will require Martin County to consider their options and make some important decisions. How the County elects to operate the facility as well as the short and long-term visions for the courses will factor into these decisions. In the Recommendations section of this report, we will discuss the appropriate space allocations for the various functions to provide guidance on the clubhouse. Clubhouse Evaluation Martin County commissioned Jay Ammon Architect, Inc. of Longwood, FL to conduct a survey and provide an evaluation report of the building assemblies of the Martin County Golf & Country Club clubhouse. This report examined the current condition of the various exterior components of the clubhouse buildings including roofing, walls, windows, framing and doors. The report did not examine the interior components or systems (HVAC, plumbing, electrical, etc.) of the clubhouse, their physical condition or functionality, or the remaining useful life for the building interior. The building envelope evaluation report was completed in early June The report provided an overview of the various building exterior components (assembly, construction, overall condition and prognosis) and presented a series of recommendations that will prevent continued deterioration. This report provides some context to repair the exterior of the building and expand the useful life of the structure, but does not address the major systems and the overall interior, and thus is problematic in understanding the future viability of the clubhouse. Listed below is a summary of the recommendations from the building report: Estimated Construction Recommended Repairs Budget Metal roofing repair $28,000 Built-up roofing replacement $65,000 Single ply roofing replacement $61,000 Wall assembly stucco repairs $28,000 Wall assembly concrete block repainting $2,000 Wall assembly glass block (no repairs) $0 Aluminum framed window repairs $4,000 Wood framed window replacement $9,000 Aluminum framed door repairs $2,000 Hollow metal door repairs $1,000 Total Projected Construction Budget $200,000 Logistics, Range and Amenities Other findings related to the customer flow and amenities of the MCGC include: The basic flow for customers is currently in flux due to the closing of the clubhouse. Customers currently enter the complex between the golf shop and the now closed restaurant and locker rooms. Upon exiting the golf shop, golfers walk to the cart staging area and the starter s booth behind the restaurant building. The practice putting green is adjacent to this area and the 1 st holes for the Red course and the White course are very close. Unfortunately, the 1 st and 9 th holes for the Blue course and the Gold course are on another portion of the property and there is no visual control from the pro shop building. Upon finishing the 9 th hole for the Red and White nines, the customer is again close to the clubhouse. This is important for the course s ability to sell 9-hole rounds and help improve food and beverage sales for golfers between nines. However, the closure of the clubhouse and the lack of another proximate food and beverage operation is problematic. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 7 24 of 87

25 There is a halfway house and restroom located on the west side of the property. This structure is next to the 5 th green on the Red course and golfers going from hole #9 on the Gold course to the 1 st tee of the Blue course drive by it. The halfway house features only beverages, snacks and warmed foods (no cooking capability). MCGC has a full size driving range that is located approximately 150 yards from the current clubhouse. Unfortunately, the view of the range from the clubhouse or golf shop is blocked by the cart storage building. Hence, new players may not know that there is a range on property. The practice amenities at the MCGC are adequate, but the range could use some additional depth. At the back of the range is a small treed area and balls hit here require hand picking or are lost. The range hitting area has modest depth at approximately 20 to 25 yards to allow for multiple hitting lines, and the width is over 80 yards which should be sufficient to accommodate all golfers on most days. Other practice amenities include a putting green adjacent to the starter and 1st tees for the Red and White courses and a chipping / short game area on the east side of the cart storage building. The facility includes several on-course restrooms throughout the property. Each nine holes have a restroom but there is only the single on-course halfway house. Current Operation The 36-hole facility is owned by Martin County but has been operated under a lease to a private non-profit group called the Martin County Golf & Country Club, Inc. ( Golf Board ) for more than 40 years. The lease required that the course operate as a public golf facility and the County was not required to provide any monies for on-going operations or capital improvements. However, the Golf Board informed the County earlier this year that they wished to terminate the lease on the property due to challenges in the facility operation. The golf facility has been popular with local residents and area visitors, averaging over 100,000 total rounds over the previous 4 fiscal years. The majority of play has been by Advance Green Fee (AGF) players (also referred to as members ) this group pays an advance fee and they are entitled to reduced green fees for every round played. However, the number of AGF players has declined over the past 5 to 10 years and there has been a lack of improvements to the facility and these factors have adversely impacted the facility s performance. County staff reports to NGF that there is approximately $1 million in the Golf Board s Capital Improvement Fund at this time. A summary of the NGF review of the organization, staffing, financial performance, operations, and physical condition of MCGC follows. This review was not meant to address all issues in the operation, but rather to focus on key items NGF believes are critical in considering recent performance and preparing a long-term strategic plan for MCGC. Contract Review The Martin County Golf & Country Club has been operated by the non-profit Martin County Golf and Country Club, Inc. ( Golf Board ) for several decades. This structure enabled Martin County to provide a good quality public golf facility to County residents and visitors but have no direct responsibility either fiscally or from a personnel perspective (no County employees are used in the course operation). NGF Consulting reviewed the lease between Martin County and the Golf Board dated July 17, 1992 (and the 8 corresponding amendments). From this review, we have summarized several key points: National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 8 25 of 87

26 MCGC is to pay Martin County a base rent amount of $100,000 or the actual collections of the County Player fees whichever is greater. County Player fees are based on $1.00 per 18-hole round and $.50 per 9-hole round. County staff reported to NGF that rent payments were suspended by request of the Golf Board from 2004 through In addition to the base rent, the Golf Board will pay to the County at the end of each fiscal year as additional rent and sales tax: (1) monies in the Golf Course Operations Account in excess of $25,000; (2) funds remaining in the Clubhouse Operations Account in excess of $25,000; and (3) all unencumbered funds remaining in the Capital Improvements Account. The Golf Board will establish and maintain a system which provides all players an equal opportunity to obtain a starting time. Tee time procedures may be inspected by the County at any time. The Golf Board has the authority to limit Advance Greens Fee (AGF) play between January and April to 12 rounds per month per player. Any additional play shall be at the daily posted green fee rate. The Golf Board can schedule up to 8 tournaments per calendar year. No tournaments can be scheduled between January and April without County approval. The County will fund all approved projects at the course with a debt service contract between the County and the Golf Board if golf funds are not available for the project. The County and The Golf Board may agree to place a portion of the rent paid to the County in a separate County account so that funds can be accumulated and used for future capital improvements that are part of the approved capital improvement budget. The various amendments made to the 1992 lease pertained primarily to changes in league play. The most significant amendment was a 20 year extension of the lease through 2026 done in November 2002 (when the original expiration was 9/30/2006). In the summer of 2014, the Golf Board informed Martin County of their intent to terminate the lease for the operation of MCGC. The Golf Board agreed to continue management under a sixmonth interim lease through the end of This interim lease is intended to provide the County time to assess the facility, management options and develop a strategy for the future. Over the years, the MCGC has had very few capital improvements and has largely deteriorated as a result. The property lease provided a vehicle for the funding of capital improvements from the rent paid, the monies collected from the County Player fees and any operating income that was generated by the club. Unfortunately, the facility has been operating on a breakeven basis even after the suspension of the base rent payments in In 2013, the facility had a new irrigation system installed and this was the first significant capital improvement in many years. Organization and Staffing The current management for the Martin County Golf & Country Club is operated under an operational lease by the Golf Board. Martin County has approval over fee increases and outside tournaments and is entitled to review various aspects of the golf operation (such as tee time procedures). However, day-to-day operations are overseen by three on-site managers, reporting directly to the Golf Board: the Superintendent of Grounds, the Head Professional / Pro Shop Supervisor and the Food & Beverage Manager (now vacant with the closure of the clubhouse). The president for the Golf Board serves as the liaison between the County and the club, with communication and specific requests coming from this person. A copy of the MCGC organizational chart is found in Appendix A of this report. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 9 26 of 87

27 Under the current operational structure, the Golf Board volunteers oversee all key golf components golf operations, facility maintenance and the food & beverage operation. With the August closure of the food & beverage building, the only remaining segment of F & B operation is the halfway house on the golf course. For employee staffing, MCGC, Inc. uses an employee staffing company Progressive Employer Management Company (PEMCO). The club is fully responsible for employee hiring and termination (not PEMCO) but the employee leasing firm handles all aspects of employee payroll services as well as workman s compensation compliance. For golf operations, the Golf Board employs only two full-time staff the head golf professional / pro shop supervisor and business manager. All other roles for inside and outside golf operations pro shop staff, starters, rangers, cart / range attendants, etc. are part-time employees. Under the current operation, this includes approximately 30 people (with hours per employee ranging between 10 and 30 hours weekly). The head golf professional previously had several other teaching professionals on the staff but as they left, these personnel were never replaced. We were surprised that the facility does not utilize volunteers as part of the operations staff (as we frequently see at many daily fee and/or municipal golf courses). We frequently see positions such as starters and course rangers staffed by volunteers who perform service to the facility in exchange for golf playing privileges. The high number of part-time employees at the facility minimizes the benefits that are paid (a significant cost savings) but increases the responsibilities of the administrative / business manager. The head golf professional / pro shop supervisor is responsible for the day-to-day operation of the facility, managing staff, keeping financial records, coordinating leagues and events, and marketing. The actual level of production in the areas of marketing appear deficient to NGF based on our limited review of the operation. The other paid staff operates as shop clerks, cashiers and attendants. The MCGC golf operation now includes a total of 2.0 full time equivalent (FTE) staff for the operation and 11.0 FTE among the part-time staff. When compared to industry standards, it appears that MCGC is generally under-staffed in number of employees. The standard 18-hole public golf course in the U.S. with a 12-month operating season is three (3) full-time employees (Golf manager, Assistant Manager and Golf Professional), plus an additional six (6) part-time employees to cover the cart, starters, cashiers, shop clerks and attendants for a total of eight (8.0) total FTE s for the operation (most recent data 2012). This shows MCGC would be under-staffed even as an 18-hole operation, and well below standard for a 36-hole operation. Golf Maintenance Staffing & Budget The MCGC golf course playing area is maintained by a staff of 17 full-time employees. The staffing structure includes one Certified Golf Course Superintendent, two Assistant Superintendents, one Head Mechanic, two Assistant Mechanics and 11 Grounds Crew. As with any golf facility, course maintenance is always the single largest expense and has the capacity to make the strongest lasting impression (positive or negative). The NGF inspected the golf courses, interviewed senior maintenance staff and reviewed the course maintenance budget from the last 3 years. During our brief tour of the entire property, the course conditions seem adequate and provided a decent playing experience relative to the fee structure. Listed below are several observations regarding the course maintenance and the budget expenditures: Over the past 3 years, the total course maintenance expense has been at approximately $1 million annually for the 36 holes. This amount appears appropriate, but well under the industry standard of $650,000 for an 18-hole public golf course. The full time staff of 17 people does seem adequate for the facility and the National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

28 maintenance staff budget falls within the standard range of 55% to 60% of the total maintenance budget. We have prepared a summary of the club s maintenance expenditures since fiscal year 2012 below. NGF Consulting did not complete a lineby-line review of the maintenance budget for this review. FY 2012 FY 2013 FY 2014* Maintenance Staff $592,022 $577,135 $499,633 Maintenance Expenses $436,724 $434,608 $356,364 Total Maintenance Budget $1,028,746 $1,011,743 $855,997 Source: MCGC. *2014 partial year through August 14, Staff reported to NGF that there have been no new equipment purchases or upgrades in the recent past. As a result, there has been significant cannibalization of older equipment to keep things running. There have also been virtually no capital improvements made to the golf facility with the exception of a new irrigation system for the entire property in 2013 (with the replacement of irrigation heads, piping, wiring & controllers but no new pump stations). It was reported that the new system cost approximately $1.35 million. There are issues concerning the physical condition of the golf courses that will need to be addressed (more in next section of this report). It is the preliminary opinion of the NGF that much of the problems observed at this facility are more related to the limited maintenance budget for the entire facility. Food and Beverage Operation The majority of the food and beverage operation was located in the facility clubhouse this included the club lounge/bar area (with seating for approximately 10 patrons) and the restaurant area with room for approximately 15 to 20 tables. However, the closing of the clubhouse and locker rooms in August 2014 completely terminated this operation. The only food and beverage option remaining at MCGC is the halfway house located on the course. Unfortunately, the halfway house has no cooking facilities and has capacity for only pre-prepared sandwiches, hotdogs and beverages. The club does not use a beverage cart on the golf course (a roving cart that sells drinks and snacks to golfers during their round) and this is generally a standard part of most facility operations. In reviewing the financial records for the facility, the entire food & beverage operation is severely under-performing. In spite of having a full bar (serving liquor, beer & wine) and a breakfast and lunch menu, the facility averaged only approximately $140,000 annually. Given the high number of rounds at the facility (generally in excess of 100,000 per year), the F&B revenue per round has averaged approximately $1.30 to $1.40 per round. With an industry standard of $6.10 per round in F&B revenue at public golf courses, this should be a much more successful enterprise. We were not able to see the restaurant in operation (it had already closed prior to starting this assignment), so we cannot provide observations from our review. We believe that many of the issues pertain to the high percentage of AGF rounds, allowing players to bring their own food on property and a general lack of marketing & promotion have all contributed to their revenue generation challenges. Also, it is important to note that direct revenue in food and beverage operations at golf courses is only a small part of the equation, as F&B in golf is mostly a service to customers. The course is primarily in the business of collecting green and cart fees, and the F&B operation can either help or hurt that business. This is especially salient in the area of tournaments and outings. The clubhouse issue must be addressed and it needs to include an appropriately sized F&B National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

29 operation. With a stronger F&B operation and opportunity, this would be more appealing should the County wish to consider leasing out this concession. Technology Point of Sale (POS) and Reservation System It is of the utmost importance that public golf courses remain at the forefront of modern technology in course operations. The efficiency of software for tee time reservations, operations / accounting reporting, retail point-of-purchase reporting, and overall management information systems can help improve overall performance (or lead to declines if poorly designed). In late August 2014, MCGC upgraded the facility s technology systems, moving to the EZ Links system, a well-regarded point-of-sale (POS) system that represents a significant improvement. To date, the facility has been highly challenged in its use of technology and modern golf marketing, and this has been detrimental to the overall operation. The EZ Links system will allow the facility to pay for the system using a trade-out process whereby the golf facility provides two foursomes per day to the vendor to sell in exchange for the system. The EZ Links system is a leader in public golf course POS technology, and should help MCGC: Create customer databases for marketing programs Create and manage a modern customer loyalty program Integrate the Tee-Time Reservation System with POS Issue identification cards and/or capture golfers addresses Develop a reporting system and monitor key management benchmarks Create a web-based marketing presence with 24-hour tee-time reservations Sell pre-paid gift cards and reservation cards for premium access online Create a distinct brand for MCGC Increase operational efficiency and improve internal control Enhance customer service From our observations, the MCGC had been operated by a group of volunteers with limited effort to attract public (or non-member) players. This is evident in the lack of marketing to attract more public play and the structure of the facility s tee time system. Prior to the recent upgrade of the reservation system to EZ Links, the tee time system offered more available times to members than non-members (we confirmed this via several visits to the web site). However, the new tee time system seems to have eliminated this issue. Golf Facility Marketing Traditionally, NGF Consulting recommends marketing budgets for golf courses of at least 1% of total gross facility revenue, or roughly $20,000 for MCGC in A review of the MCGC s financial records show that approximately $18,000 was spent on advertising annually in the previous 2 years but there was no detail on these expenditures. The MCGC has the potential to have wider potential market draw than a typical municipal golf course, since the facility has a local market, a seasonal market, and a tourist market. In our review, NGF noted the absence of a true marketing plan to define a strategy, establish goals and define specific activities. This is a planning item that typically falls to the golf course manager or a marketing director. Unfortunately, the club manager has many duties and responsibilities and marketing is not considered a priority. Additionally, the facility has never had a marketing-focused staff person. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

30 The key areas of focus for increasing activity and revenue at the Martin County Golf Course include: Internet The MCGC website ( is not currently part of the Martin County parks and recreation website this will need to be rectified as changes are made to the operation of this facility. The current MCGC web site includes most all of the features NGF typically recommends in public golf websites (rates, scorecard, directions, phone numbers and ability to book online). The site is easy to find and comes up reasonably strong on all area internet search tests. Still, this site s visual appeal could be improved with more golf course pictures. Online Tee Times A key to increasing golf in 2014 and beyond is the ability to book tee times on line with a convenient system. The new EZ Links system provides a standardized module for this function and it is an improvement over the previous Comp-U-Tee system. As we understand, the MCGC does not employ an marketing program. This type of activity is considered standard operating procedure for all public golf courses to increase play from current frequent players (as opposed to members who play at a discount). Staff did not report being active in trying to capture transient player s. Newsletter At present, there is no newsletter for the Martin County Golf & Country Club. There are several flyers available in the pro shop regarding leagues, skins games and player development groups, but nothing produced on a regular basis. Print MCGC has maintained a local presence through various print media venues with an average budget of approximately $18,000 annually. For FY2014, the facility advertising has been placed in the Treasure Coast Newspaper (with a weekly & monthly ad), Tee Times (a monthly golf publication), Chamber of Commerce publication ads and the Hampton Inn hotel welcome book. We are not aware of any analysis of this advertising or quantification of how many rounds were generated as a result of these ads. Groups The MCGC currently has several regular and active groups that play several times per week. Staff reports that the groups are primarily focused on current members or AGF players. There does not appear to be any corporate groups currently playing at the facility. Leagues The MCGC hosts several leagues organized by the volunteer Golf Board. The five organized leagues include a Tuesday ladies 18-hole, Wednesday men s 9- hole and mixed afternoon, Thursday men s 18-hole and a Friday 9-hole ladies league. These leagues are primarily populated by club members. Tournaments/Outings The MCGC manager has not been active with direct efforts to bring tournaments and outings to the facility. This type of sales activity requires significant direct marketing and even face-to-face efforts in the local community. The lease between Martin County and the MCGC, Inc. limits the number of outside tournaments to 8 events per year without County approval. The MCGC does not currently employ a Sales and Marketing position, so the responsibility for marketing falls to the Pro Shop Supervisor / Head Golf Professional. This is a position or job responsibility that will be needed in the future. As so much of the successful marketing in 2014 and the near future is about technology, it does seem that this facility will need better tools, in addition to appropriate staff and County commitment to improve the marketing reach of the facility. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

31 Green Fees The table on the following page shows the fee structure at MCGC in The facility does not separate a weekday / weekend rate but does provide a Martin County resident rate. The AGF membership requires the payment of a per-round fee (walking or riding) in addition to the initial card purchase. NGF will provide specific recommendations regarding golf fees later in this report, and cover all issues related to key categories of pricing, discounts, third-party wholesalers and multi-play programs. Overall, the MCGC appears to be underpriced when comparing rack rates to other facilities in the market (next section) especially the member rounds. We note the difficulty of undertaking accurate comparisons of green fees in this market in 2014 due to the presence of considerable discounting and the presence of third-party wholesalers. A few observations from NGF regarding MCGC pricing in 2014 are shown below. Later in the report, NGF will offer recommendations related to pricing that are based on these observations. The Martin County golf market appears to be quite price-sensitive due to the large number of public golf facilities. It is also difficult to gauge true competitive pricing due to prevalent third-party discounting in the area. The observed peak demand periods at MCGC are consistent with the area golf market and reflect the large seasonal population that lives in proximity and uses the facility regularly. Green fees at MCGC make no distinction between weekdays and weekends. Further, there is no price differential between the Gold-Blue course and the Red- White course. This type of split pricing model may be an opportunity for the facility, especially in the peak winter season. The pricing at MCGC is not overly complicated even though there are several options and discounts. The facility is priced on the low end of the fee spectrum and is considered the low price provider in this market (more in next section). NGF Consulting has observed a very price-sensitive and competitive public golf market, especially in the summer, leaving limited room to be aggressive with green fees. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

32 Martin County Golf Course AGF & Daily Fee Rates FY2013 & FY2014 AGF Cost Per Round FY2013 FY2014 % Increase 2013 to Holes Riding $15.14 $ % 18-Holes Walking $6.95 $ % 9-Holes Riding $7.83 $ % 9-Holes Walking $3.49 $ % Daily Fee Rates County Resident - Winter 18-Holes Riding $35.09 $ % 18-Holes Walking $26.40 $ % 9-Holes Riding $20.19 $ % 9-Holes Walking $15.28 $ % Non-Resident - Winter 18-Holes Riding $41.13 $ % 18-Holes Walking $31.84 $ % 9-Holes Riding $23.46 $ % 9-Holes Walking $18.02 $ % Shoulder Season 18-Holes Riding $33.11 $ % 18-Holes Walking $24.39 $ % 9-Holes Riding $18.21 $ % 9-Holes Walking $13.30 $ % Summer Season 18-Holes Riding $20.05 $ % 18-Holes Walking --- $ Holes Riding $10.00 $ % 9-Holes Walking --- $ All prices exclude 6% sales tax Advance Green Fees MCGC offers an annual program ( membership ) that entitles holders to reduced rates on a perround basis. The Advance Greens Fee card (AGF) is available for a single or couple and has been very popular with players as a means of providing inexpensive golf on an annual basis. As the data will show, the MCGC generates the majority of play from members or AGF players, although the number of AGF members has declined. According to our discussion with MCGC representatives, there were approximately 1,200 AGF cardholders 5 or 10 years ago. However, this number has declined to its current level of approximately 600 AGF cardholders. This group is still responsible for at least 60% of total facility play (reduced from previous years). These cards are for a pre-paid annual green fee only, but require a surcharge based on the number of holes and walking or riding (ranging between $4.01 and $16.75 before tax). The NGF has estimated that the total average AGF revenue per round was $12.89 in FY 2013, compared to the daily green fee + cart fee average revenue per round of $ This represents a discount of approximately 42%, which exceeds the NGF accepted standard of 25% to 30% discount for advance fee programs. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

33 Player Development Staff reports some activity in player development with reduction since 2012 due to the Golf Board eliminating assistant professional positions. The majority of player development activity was with non-members, so the Golf Board was less enthusiastic about this area of service. The facility does have several player development programs in place during the summer, and one 9- hole course is designated as the beginners only course for a period on Friday morning. The facility also offers junior golf camps for several weeks during the summer. The club professional also provides private lessons to his own students. Player development programs at municipal golf courses are important for generating interest in golf and creating new future customers. Total revenue derived from the programs is much less important. Merchandising The current players at the MCGC have not been a group that strongly supports the facility this has been evident in their spending on food & beverage and the same appears to hold true for the pro shop. In recent years, the pro shop revenue has averaged less than $1.00 per round which is well below the industry standard of $2.48 per round for courses of this type. This performance is reflective of the customer segments that frequent this facility. The selection of soft goods and the displays are all adequate, but there is space in the shop to expand the merchandise selection. The items that tend to sell best at facilities like the MCGC are the obvious impulse items (balls, gloves, hats, towels, socks, etc.), but also logoed merchandise like shirts and outerwear. Approximately 65% of the pro shop sales come from golf balls, clubs & equipment, clothes and gloves. The direct cost of merchandise sold for FY 2011 to FY 2013 ranged between 83% and 91% - this is significantly higher than the industry standard of 70% cost of sales. For the current fiscal year, the cost of goods sold was at 72% - much closer to the industry norm. The purchasing methodology for the golf shop needs to be addressed in the future after change in operator. A key to improving sales may be increasing the volume of non-resident, tourist rounds and doing more to promote key soft items that feature the MCGC logo. However, as with the food and beverage operation, the total net to the County will never be significant in merchandise sales. Rather, this is a service to golfers to make the round more enjoyable and help to bring them back for more. Golf Club Rentals One key to increasing the volume of tourist golf rounds is to have a good quantity of high quality rental golf club sets available, and communicating this fact to potential customers. The NGF was not aware of any form of formal golf club rental program in place at MCGC. Many better quality golf courses in tourist markets are showing success by purchasing newer, brand name rental sets and renting them for 1 to 2 years and then selling them in the pro shop. The funds gained upon sale can be used to purchase newer rental sets and keep the cycle going. As noted several times in this report, the key revenue sources for the MCGC are green and cart fees, and rental sets help the facility to sell more rounds. Thus, the rental sets themselves are not viewed as a strong direct profit center. Tournament, Outings and Leagues NGF Consulting has observed that tournaments and outings can be an important business component in the Martin County golf market. As the only 36-hole public facility, it is expected that the MCGC should have a large (or at least visible) tournament segment. It is clear from the NGF review that the MCGC needs to do more to attract tournaments and outings having 36 holes is a huge advantage that allows regular play as well as hosting events simultaneously. Most of the deficiency can be traced to the lack of importance on this business segment. Prior to the clubhouse closure, there were adequate ancillary amenities with indoor gathering space for participants after these events. However, the current lack of a food & beverage operation and National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

34 any gathering space puts the facility at a severe competitive disadvantage for attracting large tournaments. NGF also notes that some competitor golf courses in the area are engaged in direct marketing of tournaments to prospects, as opposed to waiting for prospects to contact them (more in recommendations section). Activity and Financial Performance Rounds Activity Recent operational data shows a decline in rounds activity at the MCGC in the past 2 years. For fiscal years 2010 through 2012, the facility had steady play at approximately 105,000 total rounds from all sources. Over the past 2 years, there has been a decline in play rounds were down 6% in fiscal year 2013 and play has continued down by 3% for the fiscal year 2014 (through July 2014 with 2 months remaining in the fiscal year). Listed below is a summary of rounds played by month at the Martin County Golf & Country Club over the past 5 years. Martin County Golf & CC Rounds Summary Month 9-Holes 18-Holes 9-Holes 18-Holes 9-Holes 18-Holes 9-Holes 18-Holes 9-Holes 18-Holes Total Starts Monthly % October 5,126 2,574 5,223 2,644 3,945 2,276 3,980 2,003 4,341 2,755 27, % November 6,170 3,158 5,686 3,133 5,653 3,556 4,936 2,906 4,522 2,863 35, % December 5,719 2,992 4,797 2,722 5,748 3,534 4,953 3,049 4,813 2,996 33, % January 7,072 3,666 7,773 4,286 7,718 5,159 7,090 4,806 5,667 4,047 47, % February 8,299 4,203 8,707 4,765 8,040 5,391 7,067 4,505 7,055 4,584 50, % March 9,192 4,511 9,358 5,133 9,020 5,684 7,792 5,108 7,732 5,339 55, % April 7,815 3,643 7,175 3,874 6,943 4,036 6,071 3,964 5,913 3,610 43, % May 5,533 2,837 4,953 2,599 4,886 2,588 4,379 2,135 4,358 3,111 29, % June 4,085 2,000 3,722 2,225 3,813 1,893 4,102 2,614 3,737 2,039 24, % July 4,045 2,069 3,933 2,281 3,911 1,899 4,016 2,176 3,230 2,125 24, % August 3,714 1,636 3,358 1,866 3,352 1,561 3,905 2, , % September 3,675 1,846 3,467 2,015 3,527 1,808 3,591 2, , % Sub-Total 70,445 35,135 68,152 37,543 66,556 39,385 61,882 37,912 51,368 33, , % Total Starts 105, , ,941 99,794 84, ,010 Estimated Member Rounds 63,348 63,417 63,565 59,876 50, , Hole Equivalents 70,358 71,619 72,663 68,853 59, ,493 Peak Season % 1 63% 64% 67% 62% 70% 64% 9-Hole % 67% 64% 63% 62% 61% 64% % Change - Prior Year 2 N/A 0.1% 0.2% -5.8% -3.2% Peak season months include November through April 2 Based on total starts When completed, FY2014 is expected to show a reduction in rounds of approximately 3% to 4% from the prior year. Another important observation regarding the rounds at MCGC is the high percentage of 9-hole play. This has consistently been around 60% to 65% and is well above the norm for most courses. The key issue is the fact that 9-hole play is allowed anytime on the Red / White course as this does not encourage higher fee 18-hole rounds. According to the rounds data we were provided, seasonal play (November through April) represents approximately 65% of total rounds this is consistent with the local golf market. The performance at MCGC mirrors a national trend, and is borne out by a review of recent weather patterns and actual performance at other area public golf courses. In comparison, the total U.S. golf industry has experienced a 35% decline in average rounds per 18 holes at public golf courses since 2000, a 9.7% decline in public golf course rounds between 2005 and 2010, and a 3% decline from 2009 to Total average rounds per 18 holes in the U.S. now stands at 31,500 for public golf courses, and the Southern Florida average is around 42,000 rounds per National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

35 18 holes. This represents a decline of about 16% from a 50,000 rounds average recorded in Thus it appears that MCGC has experienced a decline in rounds that has been similar to the State and the total U.S., but lessened somewhat by the large volume of 9-hole rounds. We believe that several key factors have contributed to the most recent decline in rounds activity at the MCGC. First, the lack of improvements to the golf courses and the flat maintenance budget has likely caused slightly deteriorating conditions over time. The new irrigation system in 2013 was a welcome improvement but also disrupted play for 6 months. More importantly, the number of annual pass-holders at the facility has been declining over the past 5 to 10 years. We understand that there were approximately 1,200 annual members in the recent past - now that number is closer to 600+/- annual members. Unfortunately, the facility does very little marketing to the public and they have not increased play from this key segment in spite of available capacity. We understand that the members generate approximately 60% of total play at the facility but this figure could be higher. Martin County Golf Course Revenue The primary sources of revenue at the 36-hole facility come from Advance Green Fee (AGF) cards, AGF player fees and daily green fees. These 3 categories represent approximately 85% of total facility revenues. Overall facility revenues are down by 7% when comparing FY2013 to FY 2011 and direct golf fee revenue is off by 6% to 9%. Annual total facility revenue at the MCGC had exceeded $2.0 million in fiscal years 2011 and 2012 however, FY 2013 was under this figure and FY 2014 will also finish under $2 million. NGF research indicates that total golf facility revenues in the U.S. have declined from about $29.1 billion in 2005 to just over $22.1 billion in 2012 (23% decline). The review shows that MCGC is experiencing revenue declines that are comparable with the golf industry as a whole. Martin County Golf Course Total Operating Revenue * FY 2011 FY 2012 FY 2013 FY Daily Greens Fees $926,300 $925,005 $869,088 $839,655 AGF Fees $502,332 $478,904 $455,687 $440,723 AGF Cards $346,221 $336,810 $315,911 $272,620 Cart Fees $14,117 $14,379 $15,129 $16,765 Driving Range $28,924 $22,316 $33,278 $26,587 Pro Shop $119,424 $107,042 $89,304 $74,775 Restaurant $142,042 $145,913 $142,177 $117,018 Lockers $22,715 $23,340 $22,785 $19,151 Other $5,381 $10,436 $14,424 $17,555 Total $2,107,456 $2,064,144 $1,957,783 $1,824,849 % Change -2.1% -5.2% N/A Source: Martin County Golf & Country Club, Inc. * 1 Through August 14, 2014 (47 days remaining in the fiscal year) National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

36 Revenue per Round - The decline in revenue at MCGC has been primarily a function of activity, as the average revenue per round has held fairly constant in the last few years. The increase in average revenue per round in FY 2014 was due to the price increases that were instituted in October The average for Standard public golf courses in the U.S. was $23.51 for total golf revenue per round (start), plus an additional $9.70 in ancillary spending (food, beverage + merchandise see Appendix B), or a total of $33.21 per round. Other items of note include the range revenue at the MCGC at approximately $0.31 compared to an industry standard of $1.12 and $0.90 per round in pro shop compared to an industry standard of $2.48. Martin County Golf Course Gross Revenue per Round FY 2011 FY 2012 FY 2013 FY Total Rounds Played 105, ,941 99,794 84,837 AGF Rounds $13.38 $12.83 $12.89 $14.01 Daily Green & Cart Fees $22.24 $22.17 $22.15 $25.24 Driving Range $0.27 $0.21 $0.33 $0.31 Pro Shop $1.13 $1.01 $0.89 $0.88 Restaurant $1.34 $1.38 $1.42 $1.38 Other $0.27 $0.32 $0.37 $0.43 Total Operating Revenue Per Round $19.94 $19.48 $19.62 $21.51 Source: Martin County Golf & Country Club, Inc. * 1 Through August 14, 2014 (47 days remaining in the fiscal year) Martin County Golf Course Expense Overall expenses to operate and maintain the facility have been in the range of $1.9 million to $2.1 million over the past 4 years. Expenses have been declining to match falling revenues and the facility operates on a breakeven basis. These figures do not include the direct cost of merchandise sold (not an expense). This has been an operational philosophy to maintain balance, but it is the opinion of NGF that this strategy of cutting expenses to match revenue may be a direct contributing cause of declining revenue. Cuts in expenses have led to reductions in maintenance applications and staff reductions or elimination of open positions, both of which lead directly to reduced quality and service. The expenses to maintain this facility are consistent with the average for standard public golf courses in the nation (average 18-hole facility spends $997,200 in expenses for golf facility operations excluding COS). However, the condition of the golf courses and the clubhouse has deteriorated due to a lack of capital improvements. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

37 Martin County Golf Course Total Operating Expenses FY 2011 FY 2012 FY 2013 FY Golf Operations -Operations Salaries $463,562 $412,737 $356,313 $307,696 -Operating Expenses $375,600 $285,871 $274,805 $260,306 -Pro Shop COGS $107,446 $95,574 $68,631 $49,638 -Golf Cart Expenses $71,864 $74,135 $70,534 $60,950 Total Golf Operations $1,018,472 $868,318 $770,282 $678,590 Golf Maintenance -Maintenance Salaries $609,111 $592,022 $577,135 $499,633 -Supplies/Chemicals/Fill/Repairs, etc $385,627 $436,724 $434,608 $356,364 Total Golf Maintenance $994,738 $1,028,746 $1,011,743 $855,997 Restaurant -Restaurant Salaries $84,889 $84,349 $85,642 $75,530 -Restaurant Expenses $4,600 $5,744 $11,363 $8,012 -Restaurant COGS $64,826 $63,648 $63,969 $56,507 Total Restaurant $154,315 $153,741 $160,974 $140,049 Total Expenses - All Categories $2,167,525 $2,050,804 $1,942,999 $1,674,636 Total Operating Expenses Per Round $20.51 $19.36 $19.47 $19.74 Source: Martin County Golf & Country Club, Inc. * 1 Through August 14, 2014 (47 days remaining in the fiscal year) Condition of Property Review In completing this review for the County, NGF has provided a summary of the physical condition of the MCGC. We note that this summary is not based on a formal inspection the facilities, but a cursory review completed by the NGF in August The review covered both the golf course playing area, as well as the clubhouse facility. In summary, the NGF finds the golf courses to be in adequate, but declining condition, mostly a result of modest budgets for course maintenance and the overall lack of capital improvements (excluding the new irrigation system in 2013). Golf Course Review The original 9-holes were opened in the 1940 s and second 9-holes were designed by architect in 1951 by architect William B. Langford. This 18-hole layout is known as the Red - White course. The Gold - Blue course was designed by Florida-based golf architect Ron Garl, with one nine opening in the late 1970 s and the other in the mid-1980 s. Key NGF findings related to the golf course playing area include: The Red-White course is considered the easier of the two courses. It is mostly open and has limited vegetation on the property. The course is a core-type design with parallel fairways on a rectangular parcel. The property is approximately 90 acres in size and has little topography. There are 4 ponds on this course and they come into play on approximately 9 holes. This is a good course for beginners, players seeking a quick round of golf and/or 9-hole players (due to its proximity to the clubhouse). National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

38 The Blue course is located on the southwest part of the property and represents the back nine of the Gold-Blue course. It is estimated that the site is approximately 70 acres in size. Players on the Gold-Blue course must take a golf cart due to the distance from the clubhouse (it is approximately 0.8 miles from the 18 th green back to the clubhouse). The Blue course is a challenging layout with water features (ponds, creeks, etc) in play on eight of the 9 holes. The course routing plays through several areas of dense vegetation and has more topography in its design. The Gold course is located on the northwest corner of the property and is bounded on the north and west sides by the airport. The site is estimated at approximately 73 acres and the distance from the clubhouse to the first tee is over.6 miles. Similar to the Blue course, water hazards are in play on 8 holes in the Gold 9. The emphasis is on accuracy due to the water and the vegetation. This course has only 6 bunkers but is still very challenging. The greens are nicely elevated to create good visual targets. The NGF team did not complete a formal agronomic inspection as part of this service to Martin County. Our general impression was that the golf courses were not in ideal condition due mostly to reductions in maintenance expense and the reduction or elimination of several maintenance applications (over-seed, aerations, etc.). This has implications and the intensity of maintenance and applications that will be required to keep the turf in the best of playing conditions. The irrigation system for the golf course was replaced in 2013 with new heads, pipes, wiring and controllers. However, the pump stations were not replaced in this upgrade. The seams from the new irrigation system were still evident on portions of the golf course nearly a year after the system was installed. The slow return to health may be related to the soil issues and/or drainage problems in some areas. The cart paths appeared to be in fair overall condition but many paths are unpaved. It is especially important to maintain the cart paths so as to maximize the number of playable days and allow cart path only play of golf. Clubhouse Review The clubhouse complex at MCGC includes the three buildings totaling approximately 10,600 square feet (sf). A summary of condition: Pro Shop Building The pro shop building is the newest of the three pieces, and includes 2,200 sf for the pro shop and administrative offices. This building appeared to be in good condition during the NGF visits and was adequate for its intended purpose. The pro shop building does not include any restrooms. The size is such that if the County were to use this building as a temporary clubhouse, considerable adjustment will have to be made to add restrooms and a small snack bar area. Locker Room Building This facility includes 4,200 sf and houses the restrooms for the facility and a total of approximately 400 full-size lockers as well as limited shower facilities. This building was closed due to poor condition and significant long-term deterioration. The locker room building is connected to the restaurant building via a covered open-air breezeway. Restaurant Building - The restaurant building includes 4,200 sf and offered a full-service lounge and restaurant with seating for approximately 60 to 75 patrons. This building was in poor condition, especially related to its kitchen and cold storage features. While in operation, the MCGC offered a fullservice restaurant and bar with tableside service. Many years ago, this building was the only structure and housed the pro shop with windows overlooking the Red-White course. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

39 The recent closure of the locker room and restaurant buildings was due to the poor condition of these facilities. The three-building structure was also probably not the best program and function for a public-access golf course. This golf operation could be adequately served by a more modest F&B structure that is better suited to the facility clientele. Also, the inclusion of a large locker room facility is not common at municipal golf courses, and typically not consistent with the public-accessibility focus of the muni golf operation. Key Areas Requiring Attention The NGF did not complete a full and detailed inspection of the golf course condition, nor did this engagement call for a full agronomic review (which we recommend be completed). Our initial review and preliminary opinion on the condition of the golf courses show some areas of concern, mostly related to reduced or deferred maintenance practices that were reduced or eliminated by the Golf Board as methods to reduce expense in the operation. Some considerations for physical improvement that will require new County investment in the physical plant include: Turf Condition: As noted, there have been reductions in maintenance practices and this has led to some stressed areas of turf. There are several areas in fairways and tees with a mix of many grass types and several patches of mixed turf on the greens (especially on the Red-White course). A detailed agronomic inspection will help the County establish the needs for improvement. Cart Paths: MCGC would benefit from improvements to the cart path system on both courses. Full cart path coverage can allow the golf course to be open more often, even after heavy rainfall as the course could always operate as cart path only and allow golfers out on wet days. This could increase the total number of playable days and help improve rounds and revenue. On-Course Services: The County should upgrade the comfort stations / restrooms on the golf course. This is a customer service item that should help improve rounds and revenue at MCGC. Clubhouse Upgrades: The existing MCGC clubhouse arrangement is not ideal for maximum revenue performance at a public golf course. Although there may be temporary solutions (modular) to the current facility closures, The County should consider a more long-term plan for the clubhouse at MCGC. The NGF recommends the structure include the following key elements (more later in this report): Pro shop Administrative offices Men s and Women s restrooms Snack bar area with indoor seating for around 50 to 75 patrons A small conference room / classroom An outdoor, covered tournament/event pavilion Maintenance Equipment: The condition of golf course maintenance equipment was very poor, as no investment has been made in this area in several years. The Golf Board did employ a full-time mechanic and this individual has helped to maintain equipment as best as possible, given the tight budgets and lack of capital for replacement. The inclusion of appropriate maintenance equipment is a key to successful public golf operations and should be considered an urgent issue for the future operation of MCGC. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

40 Physical Review Summary The MCGC and the County have invested very little in capital improvements to the facility over a long period of time. As a result, certain aspects of the facility are likely beyond repair or their useful life (Appendix C). The courses are in modest condition considering the lack of improvements but a plan must be developed going forward to improve and enhance the overall golf experience. As the new plan is being developed, the amenities and functions at the facility must be considered so as to match the desired experience. Once identified, capital costs and the importance in terms of order of impact must be part of that thought process. The County will need to be prepared to invest in aspects of the facility that can help increase rounds and improve revenue (especially from new or growing market segments). Items that will require capital investment have been identified and recommended by NGF (see Recommendations section). In general, these items tend to be centered on the fact that the physical condition of the MCGC needs to be improved for the facility to compare favorably to its immediate competitive set. In addition to these physical needs, there are other operational improvements that will be needed as well, some of which will also require capital investment. NGF Summary of MCGC 2014 The Martin County Golf & Country Club has been popular with local residents and area visitors, averaging over 100,000 total rounds over the previous 4 fiscal years. The majority of play has been by Advance Green Fee players (also referred to as members ) this group pays an advance fee and they are entitled to reduced green fees for every round played. However, the number of AGF players has declined over the past 5 to 10 years and there has been a lack of improvements to the facility and these factors have adversely impacted the facility s performance. The facility has traditionally been operated with the majority of its play from members, many of whom volunteered their time to at MCGC. If the County moves to alter the structure into a more open public golf course, some changes to the facility will have to be made. In spite of the operational challenges and the clubhouse problems, the golf courses were in reasonably good condition during our property tour, and thus are marketable for the lower fee golf customer. However, long-neglected improvements will need to be made to the facility as well as decisions regarding a clubhouse operation. NGF Consulting acknowledges that there are very limited funds available in the current Capital Improvement Fund and improvements may require investment capital from the County. However, we fully expect that the facility can be financially self-sufficient and not require any operational subsidies. The location of the facility is generally good, but the course entrance is a little out-of-the-way for golfers less familiar with the property. If Martin County elects to directly manage golf operations, there will clearly have to be improvement in pro shop operations due to the need for enhanced marketing and the expansion of advanced technology that has become an emerging best industry practice for public golf courses. We also observe that the operating and maintenance expenditures at MCGC are not appropriate and will need to be adjusted as well. Despite all of its challenges, the MCGC was able to generate over $2.0 million in total revenue on 36 holes as recently as FY2012, with declines coming in In reviewing the revenue performance of the facility, NGF observes a very low average revenue per round of golf, largely reflective of the low playing fees that are not high enough to cover basic facility maintenance. The course is very active but much of the activity is at the lowest possible rate, even in the peak winter season. Further, the high activity may also be contributing to the condition of the property as high rounds can equate to added wear and tear. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

41 SECTION 2 - MARKET ANALYSIS/BENCHMARKING SUMMARY Martin County should understand that the external golf market will present challenges for strong economic performance at MCGC. The trends in the golf industry are generally not favorable for golf course operators. The total number of golfers has declined, and total spending on golf has declined along with them. The local demographic and economic factors affecting the demand for public golf in this market tend to be mixed in that the greater Martin County area golf market shows some characteristics unfavorable to golf participation, but the area is still a mecca for large-scale tourist and seasonal resident activity which will boost demand for golf. As the permanent and seasonal resident market ages, the golfers that helped fuel the golf boom in the 1990 s are retiring or aging to the point where they can no longer play as much golf. New generations need to be introduced to the sport. To meet this need, industry efforts have started and one or more of the many industry initiatives should be incorporated into the new plan for MCGC. The ultimate future success of the new MCGC will be dependent upon the course s ability to attract and retain new populations of golfers to come and use the facility, in addition to the traditional segments that have supported this facility over the years. Basic Demographics With more than 148,600 people (2013 estimate), Martin County experienced strong growth in the 1990s and early 2000s, although this growth appears to have slowed for the period. Recent census forecasts indicate that growth projections for the market are limited through Martin County has mixed attributes related to golf demand. The median household income is comparable to state and national medians, although the data is incomplete as it does not account for the large retiree population living off retirement nest eggs. The impact of lower incomes on other more permanent residents may impact the potential to grow golf activity from newer golf segments at this facility. Lower incomes tend to coincide with lowerthan-average golf demand. However, the area is much older than the rest of the state and the nation, and older age markets tend to have higher golf participation. Martin County / State / National Summary Demographics Martin County Florida U.S. Population 1990 Census 100,899 12,936, ,584,652 Population 2000 Census 126,727 15,982, ,399,034 CAGR % 2.14% 1.25% Population 2010 Census 146,318 18,801, ,745,538 CAGR % 1.64% 0.93% Population Projected ,672 19,313, ,419,291 Population 2018 Projected 154,550 20,594, ,556,267 CAGR % 1.15% 0.78% Median HH Income (2013 Estimate) $50,746 $46,286 $51,804 Median Age (2013 Estimate) CAGR = Compound Annual Growth Rate. Source: NGF Consulting, Tactician Corporation, Applied Geographic Solutions National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

42 Local Economy Factors It is clear that the recent ( ) recession has had a direct effect on the demand for golf both nationally and locally, as decreased discretionary income and the plunging values of many stock portfolios, retirement accounts, and home values led to reductions in recreational / leisure spending. Some observations related to the local Martin County area economy in 2014 are highlighted below, with special focus on the immediate MCGC area. Martin County is considered part of the Treasure Coast a region of the Atlantic coast that includes Martin, St. Lucie & Indian River Counties. The county has a strong seasonal population of winter residents but the employment base is divided among several industry sectors. According to Enterprise Florida, the primary employment categories for Martin County include (1) trade, transportation & utilities; (2) education & health services; and (3) leisure & hospitality. Between 2000 and 2010, the population for Martin County grew by nearly 16%. During this same period, the overall US population grew by only 8.3%. Based on estimates from the US Census Bureau, Martin County and the US have had very flat population growth over the past 4 years. Based on various metrics, Martin County has a growing economy and is well positioned for the future. Listed below is a brief summary of some of these metrics relative to the overall United States: Martin County United States Unemployment Rate 5.7% 6.3% Recent Job Growth 3.69% 1.18% Future Job Growth 41.7% 36.1% Sources: US Census Bureau & Bureau of Labor Statistics (June 2014) The Martin County real estate market has been recovering over the past few years and home values have been increasing. The median household income is higher than the State of Florida and average net worth per household is also higher than Florida and the US. Further, the average age is 50 older than other areas of Florida, but indicative of a desirable place to reside. Listed below are summary key statistics for Martin County to illustrate its economic strength. Martin County State of Florida United States Median Household Income $52,847 $47,152 $52,961 Average Household Net Worth $521,685 $394,552 $495,853 Median Age Median Home Price $180, $170,100 Home Appreciation Last 12 Months 12.0% % Source: US Census Bureau & the National Association of Realtors (June 2014) In spite of the economic challenges that were experienced throughout the US between 2005 and 2008, Martin County has been recovering. Income levels are growing, employment is somewhat diversified and real estate values have been escalating. All these factors bode well for Martin County and future opportunities. Weather/Climate - Golf is an outdoor activity and thus weather will impact activity and revenue. NGF estimates that over 90% of golf rounds are played when the temperature is between 55 and 90 degrees. Rain, snow, and wind are mitigating factors that will reduce the number of playable days. Golf activity can be hosted year-round in Martin County. One key variable will be precipitation, as years with higher rainfall will lead to reduced rounds and vice-versa. This issue is especially significant for MCGC as the course has generally poor drainage and incomplete cart paths. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

43 Golf Demand Analysis Golf participation in the U.S. has grown from 3.5% of the population in the early 1960s to about 9% of the population today. NGF estimates that the number of golfers fell in 2013 to 24.7 million (decline of 2.4% from 2012). In the longer term trend, the industry has seen a loss of some 4.7 million golfers since This loss is due to both a decline in new beginners and a problem in retention golf is losing more people than it is gaining in new beginners. For research purposes, a golfer is defined as a person age 6 or above who plays at least one round of golf in a given year Rounds Played The Largest Single-Year Jump since the Millennium - The most influential factor in the golf economy in 2012 was the 5.7% increase in rounds played, through the end of the year. The resulting increase of 27 million rounds took the national total to about 490 million, then falling by 4.8% to 466,500,000 for For the longer term, rounds have declined by approximately 11% or 55 million since National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

44 Golf Industry Outlook for Golf continues to recover slowly from the recession of , and this recovery has been very modest to date. The outlook for 2014 is for modest sales growth in golf consumer products and services, and golf course equipment and supplies. Rounds played are expected to remain flat at 2013 levels, as the number of play days is unlikely to match those of 2012, but overall course revenues should not be as affected. Course closures will continue to outpace openings significantly, resulting in another year of supply correction with negative net growth Facility Openings and Closings - U.S. golf course openings remain at historic lows, as NGF recorded only 14 openings in 2013, compared to golf course closures, measured in 18-hole equivalents (18HEQ). As in recent years, closures were disproportionately lower priced public facilities (68% of total closures). According to NGF data, since the market correction in golf course supply began in 2006, there has been a cumulative net reduction of 644 golf courses (18HEQ), which represents a drop of 4.3% off the peak supply year of Local Golf Course Closure - Following a nation-wide trend, 16 golf courses have closed in Palm Beach, Martin, Indian River Counties in the last ten years, although only one of these courses was in Martin County (76 Golf World s 9-hole course). Each of the other 15 golf course closures in the three-county area was more than 30 miles from the subject MCGC. Estimated Martin County Golf Demand NGF Consulting uses predictive models and actual data from area golf facilities to provide documentation of the local golf economy, and this information is presented in this report. The indices used in this report compare the measures of golf participation and rounds demanded to a national base of 100 (U.S. Standard Index = 100). The golf demand indices for the subject MCGC golf market shows much higher-than-average golf participation (Index=134) and rounds played frequency (Index = 183), indicating high golf demand and activity relative to the population. In addition, the area has a strong seasonal element with additional golfing households with permanent residences outside Martin County. NGF estimates the total rounds demand based on facility input is almost twice (2x) the golfer-based rounds demand, indicating a very high volume of golf rounds demanded in Martin County from golfers that do not permanently reside in Martin County. In all, this is modest-sized golf market with between 15,000 to 20,000 golfers (permanent and seasonal) with potential to demand as many as 1.1 million rounds of golf (permanent and seasonal) annually. For comparison, NGF has provided the indices for Martin County and the State of Florida as a whole. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

45 # of Golfing Households Predicted Golf Demand 2014 # of Seasonal Golfing Households Golf Index Predicted Rounds (Golfer Based) 10-Mile Ring MCGC 14,206 2, , Overall Martin County 13,164 1, , State of Florida 1,217, , ,386, Source: National Golf Foundation. Rounds Index Martin County Golf Course Supply Factors There are a total of 34 golf facilities in Martin County (666 holes), with only 11 public facilities (216 holes). The table below shows the total number of golf facilities and total golf holes within 10 miles of MCGC, with a comparison to the number of households within that same geography. The resulting ratio is a telling measure of the relative supply of golf in any localized market. The Household/Supply Ratios are derived by dividing the number of households by the number of 18-hole equivalent golf courses. This measure is used as a benchmark to establish the level of support (households) that is available for each 18 holes of golf in the market. For reference, there are 8,160 households per 18 holes of golf in the total U.S. The data shows a much smaller number of households available to support each golf course in the County, thus the success of golf courses is largely dependent on the attraction of non-local (seasonal) golfers. Golf Facility Supply 2014 Market No. of Golf Facilities Total No. of Golf Holes Households per 18 holes HH / 18H Index (US=100) 5-Mile Ring MCGC , Mile Ring MCGC , Mile Ring MCGC 59 1,161 2, Martin County , State of Florida 1,048 21,447 6, Source: National Golf Foundation. Change in Supply - Martin County has seen new golf course construction over the last decade, but the overall trend is for more closures than new golf courses. The overall net change in golf holes is -27 for Martin County, representing a decline of 3.9% of the inventory of golf holes in Martin County since 2003, compared to -1.8% for the total U.S. Golf Market Summary and Opportunity Using the most basic measures of golf demand and supply, we note four possible combinations for any given market area: (1) favorable demand and favorable supply ( opportunity ); (2) favorable demand and unfavorable supply ( active ); (3) unfavorable demand and favorable supply ( inactive ); and (4) unfavorable demand and unfavorable supply ( saturated ). The review of Data for Martin County suggests an active market, with a very favorable demand profile and a generally unfavorable per capita supply of golf courses when compared to the national benchmark. Further, these measures can be enhanced somewhat by the large transient markets that contribute significant golf demand during the year, and will have to be a strong source of rounds volume for MCGC in the future. Also, the lower incomes in the market suggest a resident golfer population that could be more price-sensitive and seek out good value in green fees. Martin County GC staff should be active in developing appropriate promotions and programs to stimulate greater activity. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

46 Latent Demand People who express an interest in playing golf but have not yet started include beginners, former golfers (gave it up), and those who have never tried. The demographic profile of latent demand tends to be more female and younger than the population as a whole. Surveys show these golf-interested non-golfers cite several barriers to entry in golf, including the cost and social aspects (no one to play with). The latent demand population is comparable to the golfer population, and NGF estimates 7,700+ in Martin County, with 8,800+ within 10 miles of MCGC. Competitive Golf Facilities The market for golf in Martin County is very competitive, with 34 total golf facilities operating in the County, 23 of which are private golf facilities, 11 public golf facilities including one municipal facility (the subject MCGC). There is a disproportionate number of private clubs in the County and most are affiliated with residential developments. There are also 6 clubs that are physically located in southern Martin County but are generally considered as part of the Palm Beach County market. Some of the private clubs are in transition and are allowing non-member play on a limited basis. When benchmarked to the population, Martin County has fewer households per golf course than in the total U.S. (unfavorable for golf courses). Overall, the numbers still suggest that there is a great deal of golf course supply in the market area and that competition for public golf customers is likely to be fierce. Some key findings on the area competitive golf market include: The Martin County golf market is seasonal, and highly dependent on seasonal and tourist golf demand in order to adequately fill the area s golf courses. As such, there is limited time in which golfers are active and rounds demand is strong. The seasonal patterns in Martin County show that the typical high demand season lasts from December through mid-april, with relatively soft demand the remainder of the year. In general, the peak season generates approximately 60% to 70% of the total rounds at area facilities. This short peak demand season reduces the total rounds activity that can be sold at premium rates, and also adds a degree of risk to golf facilities in the area for uncontrollable factors such as weather (both local and up north) and the economy. The overall trend in golf rounds in the market area has been downward. Almost all of the golf courses reviewed by NGF reported this decline, so the subject MCGC is not alone in poor performance especially in 2013 (but some courses have reported some modest improvement in 2014). Declining play is also somewhat consistent with statewide and regional trends, which saw the South Atlantic Region report a 4% decline in rounds due to a 28% increase in yearly precipitation. The total U.S. reported a 9% decline in rounds for 2013 (Appendix D). Golf operators in this market report that the general decline in play began with the crash of economy in approximately Since then, there was some recovery in 2012, with decline through None of the key competitors provided us with detailed rounds information for a multi-year period. However, we are aware of the significant competition in the Martin County market and the challenges that have been observed. Discounting and Specials - One key issue observed by NGF in this market is the strong presence of GolfNow and other third-party discounters. These arrangements are making the overall comparison of green fees difficult as there is considerable discounting in the market. The County should be careful when budgeting average green fees to respect the discounting arrangements in the market, even if facilities are improved in both physical condition and marketing/operations. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

47 Key Market Competition NGF has identified eight key comparable facilities that stand out as being the most important competition to the Martin County Golf Course. These facilities are all daily fee operations Champions GC, Heritage Ridge GC, Palm Cove Golf & Yacht Club, Hammock Creek Golf Club, Lost Lake GC, the Florida Club and Eagle Marsh GC. We note that these facilities offer a variety of fees and amenities, but all are open and available to the public year-round and are generally competing within the same local market strata. The Miles Grant GC is an exception as it is a hybrid facility that allows public play in the summer but primarily member play & groups in the winter. A detailed summary of each facility appears in Appendix E to this report. Fee Comparison The table below shows basic rack rate fees for the key competitors to the Martin County Golf & Country Club. The table highlights basic fees for comparison, but NGF notes that there are numerous other discounts at all of these facilities for time of day, coupon specials and loyalty programs. Weekday Weekend Highest Unlimited Memberships Course Location Resident Non-Resident Resident Non-Resident Discounts Winter Single Family Martin County Golf & CC 2 Stuart $22.50 $22.50 $22.50 $ $45.28 $505 $850 Miles Grant Golf Club Stuart $22.00 $22.00 $22.00 $ N/A $3,956 $5,856 Champions Golf Club Stuart $35.00 $35.00 $35.00 $35.00 $20.00 $70.00 $1,750 $3,000 Heritage Ridge Golf Club Hobe Sound $35.00 $35.00 $35.00 $35.00 $25.00 $65.00 $2,500 $3,500 Palm Cove Golf & Yacht Club Palm City $23.58 $23.58 $23.58 $23.58 $18.86 $ Hammock Creek Golf Club Palm City $32.00 $32.00 $32.00 $32.00 $20.00 $85.00 $3,200 $4,500 Lost Lake Golf Club 3 Hobe Sound $40.00 $40.00 $40.00 $40.00 $31.00 $80.00 $3,300 $5,200 The Florida Club Stuart $40.00 $40.00 $45.00 $45.00 $25.00 $75.00 $3,500 $4,400 Eagle Marsh Golf Club Jensen Beach $49.00 $49.00 $49.00 $49.00 $29.00 $89.00 $3,095 $3,895 1 All rates exclude 6% sales tax 2 Plus a per-round surcharge 3 Lost Lake charges a one-time initiation fee of $1,000 for new members Martin County Golf & Country Club - Key Competitors Fee Table for Summer 2014 (with cart) 1 Source: National Golf Foundation (Sept 2014) - Not all fees & discounts/specials are shown - some facilities also have loyalty programs with lower rates National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

48 External Market Summary As noted, Martin County should understand that the external golf market presents challenges for strong economic performance of MCGC. Below is a summary of our findings on the external market environment: The permanent resident demographics are generally favorable for golf demand in Martin County. However, there are 34 public and private golf facilities in the county and the ratio of golf courses to population is not favorable for golf courses. As a result, golf courses are dependent on in-migration of golf in the winter season in order to sustain operations. Permanent population has been growing in Martin County and incomes tend to be at or slightly higher than national standards. Further, the official income estimates in the County do not include the large retiree population in the area and many households living off of their nest eggs. In the past one to two years, other key metrics have also been escalating such as housing values and employment. The local Martin County economy is driven by tourism, education & healthcare, and the trade, transportation & utilities sectors. Other than pockets and areas of wealth (such as Jupiter Island), the county has a large middle market. This group will be attracted by good value. Tourism is an important part of the local economy. Martin County GC must do a better job of marketing and attracting this segment, as the facility is not presently part of the consideration set for visiting golfers. Low golf rates in the market will continue to require MCGC staff to focus the attention on drawing in new players through targeting pricing opportunities. Public golf in this market is inexpensive and volume is needed to improve the economic viability of MCGC, especially in the off-season. The golf course industry as a whole has experienced a reduction in rounds and revenue since 2000, and this has been felt by all courses in this market. The other public courses in the market experienced declines in play but signs of improvement are underway. There is opportunity to increase rounds and revenue at the MCGC, but new investment in the facility, staff and marketing will be required. The competitive golf market in Martin County is tough, as there are several key competitors operating within a tight band of fees and amenities. Discounting in many forms is common in the market. From our review, MCGC is the low price provider for public golf in this market but there is room for fee growth with the appropriate investments. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

49 SECTION 3 - NGF RECOMMENDATIONS Martin County GC Operation The first consideration for the future of the Martin County GC operation is for the County to make a formal commitment to continuing the operation of this golf facility. A summary of findings from NGF in this facility review show: The Martin County GC is ideally suited to be a high volume municipal golf facility. The location and layout of the facility are such that it should generate adequate volume provided it is operated and maintained properly. The MCGC has a place in the Martin County golf market, serving a niche in the lower fee golf demand segment. MCGC is the only municipal golf course in Martin County and the operation needs to be adjusted so as to expand its market base and fulfill its maximum potential. The location of MCGC has positives and negatives related to the facility s viability. The location is favorable, but the entrance structure is less-than-ideal and improved directional signage is needed, especially if the entrance configuration off SE St. Lucie Blvd. is to remain. The County may find it is more desirable to have the entrance to the golf course on Dixie Highway, although this may not be practical due to existing elements at that location and possible airport / FAA restrictions. There may be too many holes of golf at MCGC, as the capacity of golf rounds is ideal for the January April winter season, but there is clearly excess capacity during the summer. The facility currently has $350,000 to $400,000 of needed direct capital investment in repairs and upgrades to bring the facility to a condition whereby it can effectively compete for improved market share. Martin County GC is presently under-staffed and clearly under-managed. In addition to capital investment, this facility needs the appropriate staff to provide adequate service to customers and help attract additional play. This facility is capable of producing a higher level of rounds and revenue. However, there needs to be improvement in marketing, improvement in physical condition and a commitment from the County administration. In short, the Martin County GC is viable as a County golf facility to serve the lower end of the area golf market. However, changes are needed to improve the physical condition of the facility and improve the on-site operation and maintenance. For the longer term, if the County were to consider a broader change in site amenities and configuration, then some adjustment in the number of holes should also be considered. NGF believes that the MCGC would operate best as an 18-hole golf course with an additional third 9-hole course that is shorter length ( executive course). Structure Considerations Assuming the County is to continue with a golf facility at MCGC, it will have to replace the volunteer Golf Board and its operation. NGF has identified five (5) basic operational structures for the County to consider in the continued operation of MCGC. Each of these options has advantages and disadvantages, but the overriding issue with this particular property is the location and the need for extensive marketing, promotion and customer service (staffing). Our summary review of the options includes: National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

50 1. Self-Operation. Self-managed would mean that ALL employees and managers are direct employees of the County. The main advantage is that the County would have total control over the facility and its operation, and would likely self-fund all improvements either through Revenue or General Obligation Bond (Sailfish Splash Park Model). The biggest disadvantage of this structure is that employees could become subject to County labor policies and benefits. There may also be limitations on paying incentives to public employees and the County would have to take over the very expensive maintenance operation. Given the higher cost of benefits to County employees, the resulting payroll is often out-of-line with competition. 2. Concession Agreements or Services Contract: A Services Contract is very similar to the management contract (Item #3 below), with the exception that the agreement is usually for one aspect of a golf operation, rather than the full facility. The key areas of operation include Pro Shop, Food and Beverage, and/or Maintenance. The County could seek to enter into a concession agreement or contract for one or all of these functional areas. Although a concession agreement could be just for the services of the individual, the agreement could also be structured to where the employees of the operation become employees of the contractor. This type of contract is popular among municipalities in other areas of the country, but much less popular among Florida municipalities. The key advantage to this type of arrangement is the direct cost of labor is shifted to a private vendor, potentially leading to savings in operating expenses, especially maintenance expense with a maintenance contract. The disadvantages usually involve the concept that each area of the operation is under separate management making it difficult to align economic interests for the benefit of the County. 3. Full-Service Management Contract. Hire a management company to operate all aspects of MCGC. This structure can come in several forms and include combinations of all areas of operation as noted with concessions. The greatest advantage to the County is shifting the operation to a qualified third-party who will control the operation and employ all staff directly. This usually leads to reduction in expense over self-operation. This type of third-party management is also usually acceptable in Revenue Bond financing. The greatest disadvantage of this option is in the operational risk remains with the County. The County is responsible for paying the management fee to the operator provided all terms of the agreement are being met, even if the golf course financial performance does not improve. These contracts work best when they are incentivebased. Ideally, the County will want to create an alignment of interests so that if the management company is doing well, the County is doing well and vice versa. 4. Lease. MCGC could be leased to a private golf company (or individual), who would be responsible for all operating expenses as well as capital upkeep. The lease can be structured to provide an annual lease payment to the County, and the lease could be established to include certain lessee requirements, including capital investment in facility improvements maintenance standards and/or restrictions regarding green fees. The advantage of this structure is the removal of the County from the day-today operation and the full shifting of risk to the operator. The key disadvantage is the loss of control in the operation and the growing difficulty in finding a qualified vendor willing to accept the risk, especially when large-scale capital investment is required. Other disadvantages include limitations on financing (probably not compatible with Municipal bonds), long-term contracts, and maintaining appropriate contract compliance. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

51 5. Hybrid. The County could elect to combine options from the above list and create a custom arrangement for MCGC. A common arrangement among municipalities in South Florida is to have County employees operate the pro shop (self-operation), a concession agreement for food and beverage and contracted maintenance with a qualified maintenance company. The advantages and disadvantages to the hybrid structure include great flexibility for the County to change over time, but often involve several moving parts that must be managed properly. Recommendations to the Board of County Commissioners The NGF recommends that Martin County use a hybrid structure that includes County personnel for management, marketing and revenue collection (golf fees, carts, range balls, AGF, etc.) to be staffed by the County at the industry standard full time equivalent (FTE). NGF recommends outsourcing all golf course maintenance and services related to the Golf Pro, Junior Golf and merchandise services. This structure would be similar to the Sailfish Splash Waterpark model that has been a successful enterprise for the County. This structure appears to NGF Consulting to be the strongest fit for the County, considering the operation in place and the target user groups. However, the County should consider: Immediate Recommendations The NGF immediate recommendations for immediate implementation at MCGC: The County should work alongside MCGC staff to better understand golf course operations until the temporary management contract expires on December 31, The County shall assume direct control of MCGC operations by January 1, 2015 while a new long-term plan is created. If the County is unable to assume direct control of operations due to time constraints the County shall continue the temporary management agreement on a month to month basis. The County shall procure services for third-party maintenance of the golf course and for golf pro junior golf and merchandising services. Re-name and re-brand the property as Martin County Public Golf Course or a name determined appropriate by the BOCC and within County policy. Utilize the Parks and Recreation Departments Marketing, Digital Marketing Specialist to execute the marketing and technologies strategies identified in this report. Demolish the locker room and restaurant buildings and bring in temporary facilities (modular) for restrooms and snack area. Temporary facilities for approximately 3,100 sf (bldg. envelope) could cost upwards of $250,000 or more, depending on quality. Bring in County owned Fiber Network from the Stuart Jet Center to the Golf Course to provide annual cost saving of $12,000 on phone and internet services (project cost as estimated by County IT = $52,000). Restructure fees with a new Red-White / Gold-Blue segmentation, and implement a new availability policy whereby tee times on the Gold-Blue are restricted to 18-hole rounds only before 1:00 pm in season. Discontinue advance tee time preferences and privileges for AGF members on the Gold-Blue course. Utilize the County food and beverage service provider for Sailfish Splash Waterpark and Sand Dune Café and utilize the staff at these facilities to provide a pool of candidates for services. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

52 Providing that outsourcing golf operations (through Request for Information - RFI) is not in the best interest of the County, recruit, hire and train the following FTE s: Golf Course Manager Existing FTE with pay increase. Golf Course Assistant Manager outsourced working full time hours. Food & Beverage Manager currently outsourced, convert to FTE at low cost Digital Marketing Specialist currently outsourced, convert to FTE at low cost Administrative Specialist III FTE Longer Term Operational Recommendations The above action items represent NGF recommended activities for immediate attention. As these changes are implemented, it is the recommendation of NGF that the County prepare a longer-term master plan for the MCGC property. This plan should be completed with significant public input, as it is a key piece of the County s infrastructure and affects nearby properties. Ideas related to the long-term plan include: Master Plan NGF found the County is lacking a broad strategic vision for municipal golf, and reacting to circumstances as they arise in a day-to-day mentality. The County would benefit greatly from the preparation of a formal 10-year master plan for golf, complete with a strategic vision as to how MCGC fits in to the overall County recreation offering, and helping to define the appropriate level of investment that is ultimately appropriated to the golf course. This planning should begin with a charrette that includes County staff, Commissioners and interested citizens. Physical Changes Consider the physical changes that could be made to the property, including: (1) the definition of specific property uses and potential mix of (allowable) elements to be included in MCGC site plan; (2) the ultimate size and number of holes to be present at MCGC long term; and (3) examine the viability of moving the entrance of the MCGC facility west to Dixie Highway, considering the logistics of existing uses proximate to the Dixie / SE Normand St / SE Indian St intersection(s), and possible airport / FAA restrictions. Staffing The County would benefit from the employment of a qualified golf manager, with appropriate responsibilities for oversight, marketing and helping to define needed capital expenditures. Marketing The NGF recommendations for marketing MCGC involve a fourpronged marketing approach: (1) Maintaining loyalty and wallet share from existing regular-play golfers who are mostly local residents; (2) improving the messaging to attract greater participation from other residents, many of whom are working people who do not know just how available the facility is during weekends and other slow periods; (3) developing a comprehensive tournament and outings strategy that includes direct face-to-face marketing to potential target groups and charities; and (4) developing an expanded strategy to attract transient tourists and visitors to the facility through enhanced direct marketing via the Internet and through direct participation and cross-promotions with area lodging and other attractions, as well as other third parties such as credit cards, discount books, internet specials, etc. Technology The Martin County GC would benefit from maximizing the available POS technology, including upgrades to computer equipment and basic operating software. The Golf Board s recent switch to the newer EZ Links POS system includes services to complete many of the above-noted initiatives such as: Loyalty program modules National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

53 Customer database segmentation through enhanced reporting Direct -to-the-consumer marketing and integration with social media Web site remodeling to become the central focus of the golf marketing Print / Brochure Printed ads can still be effective in golf. The County should create a new fold-out piece so the word Golf is in the upper 1/3 of the front page to stand out in racks. This piece should be distributed and placed in as many area visitor centers, hotels, and tourist attractions with information racks as is reasonable. NGF research reveals that 44% of all golfers play golf when they travel. We also encourage occasional ads in local papers and regional golf publications. Print campaigns should be coordinated with social media and campaigns. Tournaments and Outings The County and its new golf manager should expand direct marketing to tournament and outing prospects to bring in a larger share of that business. Keys to marketing in this segment include some direct contact selling, as well as actively seeking groups, charities, and corporations that have hosted tournaments in the past. Increasing Female Participation - This represents a major industry best practice and is recommended by NGF in every golf course and system review of operations. There are many reasons why female golf participation is low, but increasing participation from women is key to increasing revenue and is fully achievable with some additional adjustment. The most common issues relate to golf course difficulty, retail selection, on-course services (restrooms, drinking fountains), food and beverage selection, and customer service. Signage The signage for MCGC is virtually non-existent, both off property (directing golfers to the course) and on site (directing customers where to go). MCGC would help to improve its performance with new directional signs at key intersections leading to the course and should be improved to the extent that is allowable by local guidelines. All signage for MCGC should make it clear that the golf facility and restaurant are open and available to the public. Volunteers The County should implement a new and vibrant volunteer program whereby citizens can trade their services to the golf course for golf privileges. This is common at municipal golf courses in Florida and a good way to help expand the service to golf customers without adding to operating expense. It is also a way for area resident golfers to obtain discounted (or even free ) golf in exchange for their labor in simple areas such as starters, rangers, cart attendants, etc. Golf Advisory Committee The County should create a Citizen Advisory Committee to help address citizen concerns on the operation of the golf facility. This committee should be structured without real authority on operations, providing assistance to the County in advice and counsel. The committee should include golfers (from various groups), County staff and other non-golfer citizens. Public Relations/Grand Re-opening: PR announcements are free and can be effective. Make sure to send out press releases, particularly on details related to the proposed upgrades/renovations and as MCGC hosts its grand reopening. This is highly cost effective, as most media will allow free publication of public notices. As improvements are made, the reporter(s) should be invited back to see what has changed. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

54 Golf Course Operations Outsourcing Review responses to the County s Golf Course Operations request for information (RFI) and prepare a long-term plan for the site, mindful of local golf demand and airport proximity restrictions. Entertaining the possibility of a more comprehensive lease agreement, only if the selected lease partner were to bring capital to complete, or contribute to completing, the needed upgrades at Martin County GC. Martin County GC Expense Estimates NGF Consulting has prepared estimates of expenses for the 36-hole Martin County GC under the ownership of the Martin County and the assumption of self-operation by County employees (separate from the Golf Board operation). Golf course maintenance expenses have been estimated to be $1,385,000 and general, administrative and clubhouse expenses have been estimated to be $600,000 in the first full year of County operation (2015). The County should assume inflation in these expenses for the years after 2015, assuming higher annual inflation in labor. The general, administrative, and fixed clubhouse expenses have been estimated based on the operation of a good quality municipal golf course. Overall, the fixed expenses are expected to conform to the following general schedule prepared by NGF Consulting: Estimated Golf Course Maintenance Expense Martin County Golf Course Salaries & Wages Full-Time Employees Course Superintendent 2 Asst. Superintendents 1 Mechanic 1 Irrig. Tech. 6-8 FT Laborers Benefits & 33% $65,000 70,000 35,000 30, , ,000 Part-Time Labor 25,000 $10.00/hr. 250,000 Total Salaries & Wages $730,000 Utilities (Incl. Water) 180,000 Supplies 200,000 Maint. Equipment Lease 125,000 Seed, fertilizer, & Sand (incl. Top-Dress program) 100,000 Miscellaneous 50,000 Total Course Maintenance Expense $1,385,000 National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

55 Administrative & General / Clubhouse Expense Salaries & Wages Full-Time Employees General Manager / Director of Golf 2 Assistant Golf $30,000 1 Kitchen 1 Accounting/Office Mgr. Benefits & 33% Part-Time Labor Shop Clerks, wait staff, starters, rangers, etc. $60,000 60,000 30,000 30,000 60, ,000 (16,000 $10.00/hr.) Cart Lease 65,000 Utilities30,000 Maintenance + Supplies 30,000 Professional Services, fees + charges 20,000 Advertising & Promotion 20,000 Insurance 20,000 Miscellaneous 15,000 Total Administrative & General Expense $600,000 Fee Recommendations NGF recommends some adjustment in fees, with the County bringing the highest peak winter non-resident rate for green and cart fees on the Gold-Blue course to $48, so as to be under the $50 threshold for tourists to the area. Other fees will be adjusted based on percentages from this peak figure and as shown in the table below. NGF also recommends the County discontinue the AGF program, and push frequent golfers to use a newly developed Martin County Golf Discount Card. The County can allow existing AGF holders to renew through the end of September The Golf Discount card is a better program for the County to help maximize the revenue earned per round, while still provide a fair discount to frequent players. Other key features of the NGF recommended pricing: The new pricing includes Gold-Blue / Red-White segmentation, with Gold-Blue being 15% to 20% higher than Red-White. The County should also restrict the Gold-Blue to 18-hole rounds (with cart) before 1:00 from December through April. Carts are now priced separately (but mandatory ridership on Gold / Blue and perhaps weekend mornings on both courses). Non-peak pricing is based on 20% discount in shoulder season and 50% discount in summer (versus winter rates). No 9-hole summer rate - just an afternoon discount of 25% off the standard summer 18-hole rate and 9-hole cart rate is ~60% of 18-hole rate. The County should create a new Martin County Golf Discount Card (loyalty card) in an effort to keep customers loyal to MCGC. The system should allow frequent golfers at MCGC to earn points and redeem them for green fees. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

56 Winter Rates Martin County Golf Course Proposed 2015 Green Fee Pricing Martin County Resident Non-Resident Gold / Blue Red / White Gold / Blue Red / White -18-Holes $29.00 $24.00 $33.00 $ Holes $16.00 $13.00 $20.00 $17.00 Shoulder Rates -18-Holes $23.00 $19.00 $26.50 $ Holes $13.00 $10.50 $16.00 $13.50 Summer Rates -18-Holes $14.50 $12.00 $16.50 $ PM Discount $11.00 $9.00 $12.50 $10.00 AGF Per-Round Fees -18-H Riding $20.00 $ H Walking $10.00 $ H Riding $12.00 $ H Walking $7.00 $5.00 Annual AGF Fee Single Couple $ $1, Golf Carts 18-Holes 9-Holes 18-Holes 9-Holes Cart Rates $13.00 $8.00 $15.00 $9.00 Physical Recommendations The changes NGF is recommending for the physical plant of MCGC include basic site program and configuration, the size (number of holes) of the facility and the recommended clubhouse program. NGF recommendations on each are reviewed below: Site Configuration Recommendations At present the MCGC is organized with 36 holes of golf on two separate golf courses. The Red- White course is the older course and sits on property that is central to the site, immediately proximate to the clubhouse and parking facilities. Although this is the lesser of the two golf courses, its location is the preferred position on the property. The Blue-Gold course is the newer golf course with better overall features and is clearly more desirable to golfers. However, it is located on the wings of the property with nine holes to the southwest and a second nine holes to the northeast, with neither 9-hole course being proximate or convenient to the clubhouse. The NGF recommendations related to basic property configuration considers the demand for golf, the present condition of the courses, the surrounding properties and the nearby airport: The market analysis and observed demand/supply balance suggests that for the longer term (beyond five years), the MCGC would improve its viability by operating with 18 holes of regulation golf, plus an additional 9-hole short (executive or par-3) course. The County should upgrade all on-course restrooms and/or comfort stations. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

57 The County should enhance the practice amenities at MCGC, including range improvements such as: Adding a self-service range ball dispenser with pre-loaded credits on a magnetic swipe card, or PIN system (no tokens). Add lights to the range for night use. Night time availability of driving ranges will increase the revenue earned on a driving range. The manager of the adjacent airport indicated this was a possibility at the current range location. According to the County Airport Manager, much of the MCGC property sits within various layers of Airport Impact Zones as defined by the FAA. This includes the highly restrictive Runway Protection Zones (RPZ), which are present on much of the central and western portions of the golf course property. As such: Any large-scale redevelopment of the property to include new commercial or residential components is not likely to be approved. Any significant change to this facility s basic configuration on the central and western portions of the property is likely to trigger RPZ restrictions. The County should still examine the viability of moving the entrance of the MCGC facility west to Dixie Highway. However, as noted, the FAA / RPZ restrictions may make this change problematic. Further, the existing uses proximate to the Dixie / SE Normand St / SE Indian St intersection(s) may also hinder this opportunity. Clubhouse Recommendations As noted previously, the clubhouse facilities at MCGC are not appropriate for a public golf facility for a number of reasons. It is clear that the clubhouse facility at MCGC puts this course at a severe disadvantage when compared to the competition, and improvement to the clubhouse should lead directly to improved revenue performance. Based on NGF experience and our review of several other successful public golf facilities in South Florida, we provide the following insight and feedback from other operators that is applicable to Martin County as the County is contemplating a new clubhouse for MCGC. Key insights include: Operators favor the inclusion of a covered exterior patio area that is attached to the main clubhouse and convenient and accessible through the main F & B service area. The design and layout of the kitchen, food preparation area, and other back of the house areas must be carefully planned with basic form, function, and customer/employee flow given strong consideration. The inclusion of some type of easily accessible pass-through window to provide exterior F & B service to golfers will help improve pace-of-play on the golf course and lead to increased F & B revenue. Two-story clubhouses at public golf courses tend to be problematic and create inefficiencies. Single-story structures tend to work best, unless there is a specific program element to be included in a second story (i.e. banquet space). Golf clubhouses need to be designed with adequate storage capacities for all components of storage, including F & B (cold and dry), merchandise (with a locking door), and customer areas such as golf bag storage. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

58 The F & B service area works best as casual dining space for golfers to use while still in golf attire. Tableside service is not needed or recommended, and a selfservice snack counter is considered ideal. The inclusion of some type of classroom or conference room space can be a real advantage for a new clubhouse. The space can be used for golf classroom instruction, camps and/or even for small corporate meetings / golf outings. Site Programming The key NGF recommendation for the County in the future operation of the MCGC is the replacement of the present clubhouse facility with a more modern and functional single building, better suited to the higher activity potential of this golf course. Other recommendations include: The NGF recommendation is for a new clubhouse to be situated on generally the same site as present, with the same general orientation. The NGF-envisioned building would have a central main entrance facing north (to the parking lot), with the entry corridor, lobby area, pro shop and office access via the main entrance. The County should maintain at least 100 +/- parking spaces, plus a bag-drop area and keep the existing cart storage barn. The food and beverage service areas would be on the south side of the building, with an entrance direct from the golf course area. Recommended Amenities and Space Allocation The NGF recommended amenities to be included and the proposed space allocation for each is described in the table that follows. The result is a clubhouse facility of between 5,700 and 7,500 sf under air, with an additional 1,100 to 1,500 sf of covered veranda space for outdoor seating and function as an attached tournament pavilion. The result would be a facility that could combine indoor/outdoor space for up to 140 patrons, but the largest indoor banquet would seat only 50 or 60 people comfortably. The largest spaces in the proposed new building will be related to the food and beverage service areas, and NGF is recommending the County build for everyday use and "make do" for the rare large events, as opposed to building for the largest events and having the building go unused for most of the rest of the year. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

59 Martin County Municipal Golf Course Proposed New Clubhouse Space Allocation (2016) Proposed Space Allocation Element Key Function / Notes Ideal Location Low High Pro Shop Golfer check-in, retail sales and facility management. Convenient and proximate to front and rear entrances. Counter with window visibility to the 1 st and 10 th tees on the Red-White Course. 650 sf 850 sf Admin / Offices (3 proposed) Offices for GCM (150sf), PSM (300sf), GP (150sf), w/ open area for admin + bookkeeping (150sf). PSM office includes retail storage space (locking closets). Proximate to Pro Shop. Should contain a separate control point for employee-only access. 700 sf 900 sf Restrooms / Locker Rooms (2) Men s and Ladies restrooms with 4-6 stalls/urinals, 2-3 sinks, 1-2 enclosed shower areas, mirrors, etc. Space for 10 day-lockers with benches and changing area. Convenient to entrance. Opposite side of building from F & B operations. 1,800 sf (900 sf ea.) 2,200 sf (1,200 sf ea.) Snack Bar / Restaurant / Banquet Kitchen + F&B Storage Conference Room/Classroom Additional Flow / Lobbies Food and beverage service area with three functions: (1) snack bar; (2) restaurant; (3) banquet space. The area should be flexible with partitions and maximum space for patrons, but daily use of patrons (under air). Additional proximate space outdoors with covering from overhang/awning. Full service kitchen for daily use and banquets, including sf of storage (both cold and dry). Space for small meetings and classroom golf instruction. Include A/V equipment and wi-fi. Convenient to front and rear entrances / accessible from pro shop and exterior. The ideal would include a walk-up / pass-through for service directly outside for golfers between nine holes. Located on opposite side of building from locker rooms. Immediately proximate to F & B service area with appropriate doors, etc. Immediately proximate to F & B service area with appropriate doors, etc. Lobby area/ entrance foyer ( sf) with museum of Martin County golf, tournament plaques and other memorabilia/photos, plus additional 10% of full CH for basic flow and interior space 900 sf (under air) 1,100 sf (under air) 650 sf 950 sf 300 sf 600 sf 700 sf 900 sf Total Interior Total space under air, excluding any covered exterior space. 5,700 sf 7,500 sf Exterior Covered Veranda Covered exterior space for outdoor gatherings, tournaments and casual dining with seating for an additional Convenient and proximate to F & B service area. 900 sf 1,200 sf Starter Booth A starter area to organize flow of golf and sell range balls Convenient and proximate to first tees 150 sf 200 sf Total Clubhouse Space Allocation Total space, inclusive of exterior covered veranda. 6,750 sf 8,900 sf Abbreviation Codes: sf = square feet; GCM=Golf Course Manager; PSM = Asst. Manager/Pro Shop Manager; GP=Golf Professional ; A/V = Audio-Visual. Source: NGF Consulting, 2014 National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

60 Recommendations for Increased Participation from Less-Traditional Segments Increasing participation among less traditional golfer populations is generally about three groups younger adults, women and minorities. We know that 50% of the population is female. We also know that about 20% of the area s population is considered minority. As a result, the longer-term future of public golf in Martin County will be dependent on the ability of this golf facility to engage and grow these less traditional golfer segments. Understanding Obstacles To increase participation, one must first understand more about the obstacles that need to be overcome. These include: Perception of Golf: Golf is often perceived as elitist, especially among younger people and minorities. Young people rarely associate it with being cool or fun. It is also perceived as being very expensive and difficult, with some justification. Staff Attitudes: Women and minorities are often made to feel unwelcome and are treated differently than white male customers. Lack of Peers: Golf is a social activity. If a person is not able to identify with others that are playing, it is difficult to entice that person to play. Affordability: Many younger adults tend to have less disposable income, making cost an objection. Recommended Changes Specific activities that can be undertaken to improve MCGC s appeal to less traditional segments include enhanced player development programming, adoption of several of the PGA s Golf 2.0 initiatives and embracing new ideas in golf such as larger holes sizes and FootGolf. Player Development: New golfer development should be a fundamental component of the new MCGC. Having a PGA golf professional on staff to implement many of the nationally recognized programs to develop new players. Affordability: Golf is more expensive than many activities, and this includes both the on-going cost of playing (e.g. green fees, memberships, etc.) and the high cost of taking up the sport. This cost includes lessons, equipment and apparel (especially shoes). Here are some strategies available to lower this cost: Low cost rentals: Providing budget rentals for nominal fees. These would be used clubs and bags that have little investment in them. These would be in addition to the regular club rentals, as there needs to be premium rentals at all courses from popular labels to help attract more visitors and tournaments. Affordable Clinics: Offering a multitude of affordable (and some free) clinics for beginners. Some should be targeted to specific groups, while others are open for everyone. High School Golf: Include area high school golf teams at MCGC. Bundles: Creating beginner bundles that include clinics, private lessons, range use, green and cart fees, and equipment discounts, that are affordable. More fun : Encourage a more fun atmosphere at all the facilities, but especially those that will be targeting beginners and juniors, including a relaxed dress code. Emphasize those aspects of golf that make it special, such as the honor system and code of ethics, but relax those barriers that make it seem stiff. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

61 FootGolf FootGolf is a combination of the popular sports of soccer and golf. The game is played with a regulation #5 soccer ball at a golf course facility on shortened holes with 21-inch diameter cups. The rules largely correspond to the rules of golf. FootGolf as a game is played throughout the world in many different forms. The American FootGolf League (AFGL) is organizing tournaments throughout the country working with golf courses to bring FootGolf to their clubs as another avenue for revenue and to develop the game further. FootGolf is growing rapidly around the U.S. and NGF is starting to see this activity as an excellent way to enhance revenues and create new utilization at golf courses during off peak periods. FootGolf can also be an excellent way to introduce people to traditional golf, as the two sports are almost identical in rules and scoring. There is often misunderstanding about FootGolf and golf course operators should know that: FootGolf is most popular with young adults (18-30), as opposed to children. A FootGolf course could co-exist with a traditional golf facility without any direct interference with the traditional golf holes. FootGolf holes are not located on golf course greens, but rather mostly off to the side in roughs or generally under-used spots in fairways. The FootGolf course and 21-inch holes can also be used for traditional golf beginners when FootGolf is not being played. FootGolfers prefer smoother courses, with flat greens. The area around the 21-inch FootGolf holes does not need to be cut short or green-like FootGolfers will play much faster than traditional golfers, usually around 5-7 minutes per hole. The total area for FootGolf will be much smaller than traditional golf. A good length for FootGolf is around 3,000 to 3,500 yards. Par-3 holes are around 80 yards or less, Par-4 holes yards and par-5 holes at 220+ yards. As with many other golf and recreation activities, the key to success for an initiative like FootGolf will be through extensive programming, especially competitive leagues. The Martin County area has a demonstrated affinity for Soccer, and FootGolf should be a popular new activity for the golf system. At present, the Florida Club in western Martin County is the only course in the County active in FootGolf and is a member of AFGL. The NGF recommends that FootGolf be added at MCGC on the Red-White course in as a test case for demand and activity. If it is successful, there may be opportunity to include the concept into the new long-term plan for the facility. However, it is highly unlikely to be successful on the Gold-Blue course due to course layout and limited proximity to the clubhouse area. Ideas for marketing FootGolf include reaching out and advertising to organized soccer leagues, soccer stores, fitness clubs, colleges/schools and other soccer-oriented activities. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

62 SUMMARY CONCLUSION The Martin County Golf & Country Club has been operated for 40+ years by a group of volunteers known as Martin County Golf & Country Club, Inc. ( Golf Board ), which is a volunteer citizen group made up primarily of avid golfers at the facility. This Golf Board has done an admirable job in managing the golf course facility as directed by the County, focusing on keeping operating expenses at a minimum so as to provide very low cost golf to golfers. However, this strategy has led to some severe condition of property concerns, and the NGF recommends changes to the facility to better resemble a more modern municipal golf course. The NGF sees this review period as an ideal opportunity for Martin County to press the reset button on the entire golf course operation, and have a fresh start for the facility. In preparing this report for the County, NGF has divided our recommendations into immediate action items and long-term planning items for the property. We note that the immediate recommendations represent urgent items that should be acted upon immediately by the County. The most important recommendations to Martin County in October 2014: 1. The County should assume management of MCGC while a new long-term plan is created, and use third-party contracting for maintenance services and/or pro shop labor. 2. Discontinue the Golf Board and replace with a Citizen Advisory Committee. 3. Re-name and re-brand the property as Martin County Municipal Golf Course. 4. Demolish the locker and restaurant buildings and bring in temporary facilities (modular) for restrooms and snack area. 5. Enhance the marketing of the facility with programs to segments such as tourists, lodging establishments, and tournaments/outings. 6. Enhance the use of technology that is reflective of modern systems in wide use at successful public golf courses. 7. Review responses to the County s Golf RFI and prepare a long-term plan for the site, mindful of local golf demand and airport proximity restrictions. The NGF fully expects that action on the above-noted items will help the County take the appropriate first steps in modifying the golf course operation into a more open and welcoming public golf facility that can be enjoyed by a maximum number of County residents and visitors. This plan will also help the County preserve the golf facility and continue its function as the lowest fee provider of public golf in this market. MCGC is the only municipal golf course in Martin County and it is the NGF recommendation that it be allowed to change so as to better serve this function. Sincerely, Richard B. Singer Director of Consulting Services rsinger@ngf.org National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

63 Appendices APPENDIX A MCGC ORGANIZATIONAL CHART APPENDIX B GOLF INDUSTRY STANDARDS, NORMS, AND OPERATIONAL ISSUES APPENDIX C EXPECTED LIFE CYCLE APPENDIX D ROUNDS REPORT APPENDIX E KEY MARKET COMPETITION DISCUSSION National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

64 APPENDIX A MCGC ORGANIZATIONAL CHART National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

65 APPENDIX B GOLF INDUSTRY STANDARDS, NORMS, AND OPERATIONAL ISSUES NGF has presented a selection of basic golf industry information designed to help educate the Martin County on reasonable expectations for public golf operations in the U.S. Information provided includes operational norms for public golf courses (rounds, revenues, expenses, staffing) as well as some other standards consistent with successful public golf courses. Public Golf Operational Norms For purposes of comparing the performance of the MCGC, we present a review of selected NGF data from our bi-annual surveys of golf facilities, supplemented by data provided by the PGA of America through its Performance Trak data collection. This includes data from the aggregate of all golf courses in the U.S. (by category), as well as data from selected subcategories of golf facilities including mid-range (middle fee) public golf facilities. These data are detailed in the National Golf Foundation publication, Operating & Financial Performance Profiles of 18-hole Golf Facilities in the U.S. These figures were included and used for this effort as they represent reasonable estimates for comparison to MCGC. In addition, NGF Consulting has added estimates from the Future of Public Golf in America study completed in 2012 and presented at the annual NGF Golf Business Symposium. Public Golf Facility Rounds Expectations NGF research indicates that the average number of rounds played per 18-hole golf course has been declining in the last 25 years. The totals now stand at an average of 31,527 rounds for Municipal golf courses, 26,071 for all daily fee (privately-owned, open to the public), and 19,402 for private (member only) clubs. We note these figures all represent significant declines since 1985, with acceleration of decline since As a benchmark comparison, average rounds per 18-hole Municipal golf course was around 42,000 in 2000 and just over 36,000 rounds in The NGF uses a golf industry standard that defines a round of golf as one individual beginning a round in an authorized start. As such, the NGF is essentially counting starts as a round. During the course of this study, NGF has used the industry standard of starts to count rounds played and recommends the City continue to use this counting method for all future reporting. Average Total Rounds Played By Facility Type 2009, Daily Fee 26,009 24,394 26,071 Municipal 32,497 29,681 31,527 Private 17,748 18,323 19,402 Source: National Golf Foundation and PGA Performance Trak. National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

66 Public Golf Facility Revenue Expectations NGF research indicates that the total of all golf facility revenues in the U.S. represents a $22.3 billion industry, down from a peak of $29.1 billion in The section below shows the NGF estimate for total golf facility revenue (public and private combined) in the United States for recent years. Revenue Detail for Standard Public Golf Courses Further detail on standard public golf facility operations in the United States has been collected by NGF over the years, a summary of which is presented below for 2009 and Standard public golf courses are those with green fees between $30 and $70 (including carts). The NGF consultants feel that this represents the best measure of comparison to performance at MCGC, and is used for this purpose throughout this engagement. Public Standard Average Revenues * % change Green fees, cart fees and member/pass holder revenue $679,280 $666, % All other golf revenue $76,930 $75, % F&B revenue (incl. banquets) $214,400 $192, % Merchandise revenue $80,080 $78, % All other operating revenue $37,560 $35, % Total Revenue $1,088,250 $1,047, % Source: Operating & Financial Performance Profiles of 18-Hole Golf Facilities in the U.S., 2011 edition, National Golf Foundation, and Future of Public Golf in America study *Estimated totals derived from sample research in Public Golf Facility Expense Expectations NGF research indicates that all golf facilities in the U.S. had a total of $21.3 billion in direct operating expenses, down 20.5% from a high of $26.8 billion in The section below shows the NGF estimate for total golf facility expenses (public and private combined) in the United States for recent years. Operating Expense Detail for Standard Public Golf Courses Further detail on Standard public golf facility operational expenses in the United States from 2005 and 2012 are displayed below. NGF will use these figures for comparison to MCGC throughout the NGF engagement for the Martin County. Public Standard Average Expenses * % change Total maintenance costs $377,160 $442, % Golf car fleet costs $31,120 $32, % COGS F&B $86,360 $77, % COGS merchandise $56,450 $55, % Other expenses $315,280 $389, % Total Expenses $866, , % Notes: Total maintenance costs includes payroll, supplies, and equipment. Other expenses is a large category because it includes all non-maintenance payroll and all other operating expenses. Source: National Golf Foundation National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

67 Other Expense Findings NGF has also included basic information on golf industry standards for golf courses of all types in all climates. Industry standards can vary depending upon specific courses, but as a rule of thumb, allocated spending in key areas coincide with the percentages displayed below. The two most significant of these figures for the analysis of MCGC are the percentage of labor expense and utilities, as addressed by NGF for each individual facility. Key Area Allocated Spending Labor 50% Products, Supplies & Repair 15% Services (Incl. Equipment) 10% Utilities 5% Other 20% Source: Golf Course Superintendents Association of America (GCSAA) and NGF. Expense totals do not include non-recurring capital expenses, amortization, or depreciation. Public Golf Facility Average Revenue and Expense per Round The following section provides NGF estimates for revenues and expenses per round of golf played for each of Standard golf facilities. Public Standard Revenue and Expense per Round NGF research indicates that public golf courses in the U.S. with green and cart fees between $30 and $70 average $33.21 in total facility revenue per round of golf in Of this figure, $23.51 (70.8%) is derived from golf sources (green, cart, pass fees and driving range), with the remaining $9.70 (29.2%) per round derived from ancillary (mostly merchandise, food + beverage) sources. Overall, this figure has increased by almost 10% between 2005 and 2012, although we note that 2012 was a particularly strong year for golf in much of the U.S. due to outstanding winter weather. Standard Public Golf Courses Average Revenue Per Round % change Total Revenue $30.23 $ % Golf Revenue $21.01 $ % F&B revenue (incl. banquets) $5.96 $ % Merchandise revenue $2.22 $ % All other operating revenue $1.04 $ % Source: Operating & Financial Performance Profiles of 18-Hole Golf Facilities in the U.S., 2011 edition, National Golf Foundation, and Future of Public Golf in America study 2010 Middle fee public golf courses in the U.S. average $31.63 in total facility expenses per round of golf. Of this figure, $14.03 (44.4%) is derived from golf course maintenance, with the remaining $17.60 (55.6%) per round derived from all other expenses. Overall, this figure increased by about 31.5% between 2005 and National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

68 APPENDIX C EXPECTED LIFE CYCLE National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

69 APPENDIX D ROUNDS PLAYED REPORT YEAR-END 2013 National Golf Foundation Consulting, Inc. Martin County GC 2014 Review of 87

70 70 of 87 National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 53

71 APPENDIX E KEY MARKET COMPETITION DISCUSSION Miles Grant Golf Club (Stuart) This 18-hole executive length course (4,446 yards par 64) is the closest facility to the Martin County G&CC and was developed in conjunction with a residential community in the early 1970 s. The member clientele has been declining due to age there are now ~260 members (from the previous high of 500 members in the past). Member play is about 50% of total rounds. To offset the decline in play, the club sells summer memberships ($20 plus $22 per round). They have also been attracting regular weekly groups in the winter & summer (the group must be at least 16 players) and this has been successful. Annual rounds peaked at approximately 33,000 rounds about 5 years ago. The club is now generating approximately 25,000 rounds and they are seeing some modest growth in play. The membership fees are high relative to other public courses in the area as an executive facility about 50% of the members live in the Miles Grant community Conversely, the public fees at $22 per round in the summer are low for the market and likely attracts the value-conscious golfer The Miles Grant GC has a main clubhouse with locker rooms, lounge, restaurant, meeting space and offices (with ~10,000 square feet). The golf shop is housed in a separate adjacent building. The building & amenities are consistent with an older private club. The Champions Club (Stuart) The Champions Club was developed in conjunction with the Summerfield residential community and opened in The golf course property is owned by Martin County and there is a longterm ground lease in place with the course owner (based on a percentage of gross income). The facility reported that play in 2013 was down significantly and was also down from levels of just 4 years ago. They expect to finish the current year at approximately 35,000 total rounds. Member play has not been a factor at the facility in spite of having 500 homes in the Summerfield community. Management is now active recruiting resident members and project they will sell 40 to 80 memberships for Tournaments and group play has become more important and the facility actively markets for these segments. The winter season generates about 65% to 70% of the total rounds The clubhouse a modest building of under 6,000 square feet. Primary uses include a pro shop, restrooms (with 4 lockers), food & beverage operation (seating for 50) and outdoor seating for events. Heritage Ridge Golf Club (Hobe Sound) Heritage Ridge Golf Club was originally opened in 1979 and is developed in conjunction with a residential neighborhood. The facility s driving range has frontage on the east side of US Highway 1 (this parcel is leased to the course by Martin County) and this is good exposure for the course. The facility is a regulation length layout but is considered short at only 6,000 yards from the blue tees. 71 of 87 National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 54

72 In recent years, the Heritage Ridge GC has been relying more on public golfers. The facility has about 120 memberships and this is declining. Members are responsible for approximately 40% of total play (with most living outside the community). Their play is highly seasonal with as much as 80% coming during the winter months Rounds have declined in recent years as the economy worsened, although exact figures were not provided to NGF. In 2013, the facility renovated their greens at a cost of approximately $500,000. The facility clubhouse is a 2-story structure of approximately 8,000 square feet. The ground floor includes the golf shop, locker rooms & administrative office. The second floor has the restaurant / lounge and space for banquets & meetings. Palm Cove Golf & Yacht Club (Palm City) The Palm Cove G&YC was developed in 1990 and was originally known as the Cutter Sound Golf Club. It is developed in a residential community on the west side of the river. The location is somewhat challenging due to the limited crossing points over the river and the one road into the area. The golf course is developed on a small parcel and water and/or marsh comes into play on nearly every hole (with a very high slope rating of 139 for a course of only 6,300 yards). Play here is highly seasonal nearly 75% comes during the winter months. The facility no longer offers annual memberships and is focused exclusively on the public golf market. In spite of being part of a residential development, very little play comes from within the project. For 2013, Palm Cove had approximately 20,000 rounds of play. The club representative thought that the facility would end 2014 at over 30,000 rounds of play but this is likely overstated. Group play is important as they try to host 3 to 4 groups each week (with a broad range of group sizes). Their primary market area is Palm City & Stuart, but they also attract players from areas further north and south. The facility has a small clubhouse of approximately 4,000 square feet which includes the golf shop, locker rooms and restrooms. The food & beverage operation is operated from a separate adjacent building of approximately 2,500 square feet (with seating for ~60 to 80 guests). The F&B operation is open daily in the winter but only Thursday through Sunday in the summer. Hammock Creek Golf Club (Palm City) Hammock Creek GC is an 18-hole golf course located in close proximity to the Interstate 95 exit for High Meadows Road. This access enables the facility to attract golfers from a larger market area. The course opened in 1996 and the affiliated residential community has been fully developed for several years. This facility is the one of the highest priced courses in the market. However, it also provides the best overall experience as well (good playing conditions, GPS on the golf cart, on-course beverage cart, full bar & restaurant, etc.). Hammock Creek is putting less emphasis on annual memberships and now caps the number sold. In the past, they would have 100 to 150 annual memberships, but they are limiting the number for 2015 at only 30 (with 25 already sold). The winter season generates approximately 65% of the total play. The shoulder season of November & December is responsible for 15% and the summer months (May through October) generate the remaining 20%. 72 of 87 National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 55

73 Outings and events are an important part of their business model. During the months of April, May & October, they will host approximately 15 events with 60 to 100 players per event. Hammock Creek expects to finish the year in the low 40,000 round range. This will be approximately 3% to 5% down from the previous year. The Hammock Creek clubhouse includes approximately 6,000 square feet of space uses include pro shop, restrooms / small locker rooms, administrative offices and restaurant / lounge (with seating for 40 to 50 people). Additionally, the clubhouse includes covered space under the building roof that can be used for events & gatherings. Lost Lake Golf Club (Hobe Sound) Lost Lake is another real estate driven golf facility from 1992, located on the west side of US Highway 1 in Hobe Sound. The facility has a reputation as a good course but does very little marketing or promotion. The facility is extremely active during the winter generating 80% to 85% of total annual play during the peak season. Approximately 70% of rounds played at Lost Lake are by the members there are 200 members presently and this number has been stable in recent years (most members live in the community). Play at the facility is reported to be fairly stable they project finishing 2014 at or near 50,000 total rounds The majority of non-member play comes from the local market area. Being in southern Martin County, they can also attract players from the northern area of Palm Beach County. The facility has a clubhouse of approximately 12,000 square feet and has features and amenities similar to a true private club (such as a pool & 2 tennis courts). The building includes a large pro shop, locker rooms, restaurant & lounge, meeting / event rooms and offices. The Florida Club (Stuart) This golf course was developed in 1996 in conjunction with a residential community of approximately 500 units. The development is located approximately 1 mile west of Interstate 95 at Kanner Highway and the accessible location can attract from both Palm Beach and St. Lucie Counties. This facility is extremely active in their marketing endeavors they utilize direct s, local ads as well as a strong Internet presence. They have also been recently promoting FootGolf, a version of golf played with a soccer ball (it takes less time & attracts a very different segment than traditional golfers). The facility offers memberships and we anticipate that the majority of members come from the community or surrounding areas. Representatives for the Florida Club declined to talk with NGF so we have no information regarding their performance. However, we would expect that they generate ~60% to 65% of their play in season and may have a higher amount of off-season play due to their marketing activities. We estimate that this facility generates approximately 40,000 to 45,000 rounds annually based on the performance of their competitors. The Florida Club clubhouse is approximately 5,000 square feet in a ranch-style building. The functions include the pro shop, restroom (with no locker rooms), the restaurant / lounge (with seating for 50 to 60 people) and meeting space. 73 of 87 National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 56

74 Eagle Marsh Golf Club (Jensen Beach) Eagle Marsh is located in northern Martin County and was also developed with a residential community. The course opened in 1997 and the gated community includes approximately 700 homes. Eagle Marsh attracts play from Palm City, Stuart, Port St. Lucie, Fort Pierce and perhaps Jupiter. There are a total of 230 members and they generate approximately 40% of all rounds. Only about 50 members (20%) come from the Eagle Marsh community. According to the owner, round are up in 2014 for the first time since They project finishing 2014 at approximately 40,000 rounds (with the growth attributed to new people in the market). We observed that the course was only in average condition during our visit. Approximately 70% of play is generated between November and April (with most coming in January, February & March). This facility also actively markets and recruits for tournaments and outings. The majority of the outside events are hosted during the offseason (with only member events allowed in the winter). The clubhouse for Eagle Marsh is a 2-story building with the ground floor used primarily for cart storage. The upper floor is approximately 7,000 square feet and includes the pro shop, the lounge / restaurant (with total seating for about 60 people), men s & women s locker rooms and meeting space (about 2,500 SF). 74 of 87 National Golf Foundation Consulting, Inc. Martin County GC 2014 Review 57

75 NGF Review of Operations for Martin County Golf & Country Club Prepared for Martin County Parks & Recreation Department Presented by Richard Singer Director of Consulting Services National Golf Foundation Consulting, Inc. (561) NGF - KEEPING GOLF BUSINESSES AHEAD OF THE GAME SINCE SOUTH U.S. HIGHWAY ONE, SUITE 401, JUPITER, FL PHONE: FAX: of 87

76 Martin County Martin County Golf & Country Club Introduction National Golf Foundation Municipal golf facility consulting NGF Staff Richard Singer, Barry Frank Not advocate for any position other than Martin County Golf & Country Club success Why we re here: Overall operational & facility recommendations Help the County establish the appropriate operating program and mix of amenities that will best fit the golf market in Martin County Methodology: Meetings Facility inspection Market analysis 76 of 87 2

77 Martin County - Martin County Golf & Country Club Key Components of the Study Strategic look at the County s overall municipal golf offering Focus on the recent performance of Martin County GC in light of the recent closure of several structures on site Examine status of the Martin County golf market Review physical condition and operation of Martin County Golf & Country Club Help Martin County create a more sustainable County golf facility for the long-term future Present NGF Consulting findings and recommendations 77 of 87 3

78 Martin County - Martin County Golf & Country Club General Impressions MCGC has been operated for 40+ years by a volunteer entity known as Martin County Golf & Country Club, Inc. ( Golf Board ), which is a volunteer citizen group made up of avid golfers at the facility. MCGCC is essentially operating what can best be described as a municipally-owned private club. Golf Board has done an admirable job in managing the facility as directed by the County, keeping operating expenses at a minimum to preserve low playing fees. Facility is presently providing a service of affordable golf to residents. 78 of 87 4

79 Martin County Golf & Country Club Gold Course Red-White Course Blue Course 79 of 87 5