Courses find themselves in the hole

Profits rare for golf clubs of Columbia Association, despite affluent location

May 12, 2002|By Laura Vozzella | Laura Vozzella,SUN STAFF

CLARIFICATION

An article in last Sunday's editions of The Sun about the growth of golf courses in Howard County should have included a mention of two now-defunct courses that once operated in the county, Font Hill and Allview.

Howard County is full of folks who fit the typical golfer's profile to a tee: a baby boomer with an annual income of more than $70,000.

All those likely players live in one of the nation's most golf-deprived regions, with fewer holes per person than 91 percent of American metro areas.

Yet golf has landed the Columbia Association in the rough. The homeowners group has lost more than $6 million on its two golf courses during the past 10 years - even as other area facilities turned profits or at least broke even.

There could be even tougher hazards ahead for Columbia as golf operations in the Baltimore region and across the country try to recover from a double bogey: a recent boom in course construction coupled with a slide in participation.

During the past decade, the number of players nationally fell nearly 4 percent, according to the National Golf Foundation, an industry group based in Jupiter, Fla. In the same period, the number of courses rose by more than 20 percent. In Howard alone, golf holes more than doubled - from 63 in 1991 to 162 now - while the population grew by less than a third.

Concern is growing, even at courses that have been making money for years.

"It's far more difficult now than it ever was," said William L. "Lynnie" Cook II, executive director of the Baltimore Municipal Golf Corp., which runs the city's five municipal courses without public funding. After years of profits - $3.6 million of that returned to city coffers since 1985 - the golf corporation had to dip into reserves to cover losses of $175,000 and $200,000 in the past two, Cook said.

"I would not want to be someone owning a golf course or considering building one," Cook said.

With their record of red ink, the two Columbia Association courses appear to be in a far more precarious situation.

The Fairway Hills Golf Course, which opened in 1995, has racked up $3.1 million in losses and never made a profit. The 35-year-old Hobbit's Glen course was in the black just one year in the past 10, clearing $118,000 in fiscal 1995. The rest of the decade, it posted six-digit annual losses - ranging from $232,000 to $463,000.

The miserable results surprise golf industry experts, particularly because the combined rounds played on Columbia's courses approach 90,000 a year and golfers pay a premium to use them.

Weekend greens fees with cart rental at association courses are in line with the competition's: $36 at Fairway Hills and $55 at the plusher Hobbit's Glen. The price is $55 at Timbers at Troy, which is owned by Howard County; $74 at the privately owned Waverly Woods; $34 to $67 at Baltimore County-owned courses, depending on the facility.

But Columbia golfers must also buy an annual membership - $492 to $774 a year for residents, depending on whether the golfer wants access to one course or two; $882 to $1,446 for nonresidents. The cheapest annual Columbia golf membership would pay for an extra nine rounds of golf at Timbers at Troy - a game every weekend from June into August.

"It probably doesn't have anything to do with the demand for golf or the downturn of the economy," National Golf Foundation consultant Angelo Palermo said of Columbia's losses. "Probably it has more to do with the practices and procedures of the operation."

Robert D. Bellamy, operations director for the Columbia Association's sport and fitness division, said the organization's budgeting practices may overstate losses. The homeowners association maintains open space and provides a wide range of community services in addition to running athletic facilities, and it allocates administrative expenses across the organization. So the golf program winds up bearing costs that are not directly related to it, Bellamy noted.

"I don't think that you can say, `Well, Hobbit's and Fairway are not managed well or not performing well financially compared to this course or that course' unless you put all the numbers next to each other," Bellamy said. "Everybody analyzes their financials differently."

But critics say the association's budgeting methods understate the cost of certain facilities. Recent budgets have included about $2 million in expenses that were not allocated to any particular operation.

"It's funny accounting, but the point is, that's the way they decided whether the facility was making money or not," said Alex Hekimian, president of the citizens watchdog group Alliance for a Better Columbia. "And through their decision and their methods, they can't make a profit. ... It sure has been a sore point, continuously falling short when other golf courses in the area are doing really, really well."

Most area courses say they have made money in recent years, covering not just operating expenses but depreciation and hefty long-term debt.

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