Florida municipal golf courses have lost nearly $100M over past five years

Like orange groves, royal palms and Disney World, golf has long been part of Florida’s identity, and municipal golf courses have provided locals with affordable opportunities to play.

But as golf and local demographics change, many municipal courses are struggling with declining participation and revenue.

That change is forcing local governments to re-evaluate what role, if any, they should play in running golf courses. 

Florida’s municipal golf courses have lost nearly $100 million over the past five years, an investigation by USA TODAY Network-Florida revealed.

While some dipped into reserves or found one-time sources of revenue, overall these county- and city-owned courses required $64.9 million in subsides to stay afloat, the investigation showed.

Financial documents indicate that most municipal golf courses are set up as enterprise funds — or special funds that are expected to be self-sufficient — but only a handful of munis can actually cover their expenses.

The investigation also revealed that, increasingly, local governments are getting out of the golf business, or refusing the opportunity to jump into it.

More:Collier County will not build or buy golf course

More:Brevard County commissioners back deals to get out of golf course business

Other findings from the investigation include:

• Golf courses remain a priority for many cities and continue to receive a significant portion of the general-fund budget, despite being a drain on resources.
• On many golf courses, participation is declining.
• Most municipal golf courses continue to pour millions of dollars into capital improvements, even though those courses consistently operated at a loss.
• Some courses have accumulated serious debt that will hang over them for years to come.
• Numerous courses have failed to address ballooning maintenance costs.
• Several counties that hired third-party contractors to run their courses experienced significant mismanagement.

Sarasota City Commissioner Hagen Brody — like many elected officials in Florida — is conflicted about continuing to subsidize the city’s course, which lost nearly $3.7 million in the past five years. Next year it will need a nearly $1 million subsidy to make ends meet, according to city records.

Bobby Jones Golf Club is a product of demand from decades ago and is not necessarily viable in today’s golf market, according to Brody. And yet, Brody said, the course provides the city's poorer residents the opportunity to play a round.

“Golf traditionally is an expensive sport to enjoy, but folks with limited means also should be able to enjoy a sport that’s really become a staple of Floridian society,” Brody said. “The goal is to provide access for people of all ages and incomes.”

'The only option'

Al Perry grew up on the Clewiston Golf Course.

On summer days, Perry’s parents would drop him off in the morning and he'd hang out there with most of the other town kids until early afternoon, when someone scrounged up a ride home.

The golf course was a central part of childhood in the Florida town just south of Lake Okeechobee, according to Perry, a lifelong resident.

“It was a safe haven," Perry said. Plus “it was the only option within an hour drive.”

Perry, 48, now is the city manager, but Clewiston — a landlocked town with six stoplights — hasn’t changed much, and the golf course remains critically important to the snowbirds and 7,800 permanent residents, Perry said.

Financially, though, the course is a burden.

Last year, Clewiston spent 10 percent of its general-fund budget on the golf course. The estimated $908,000 is as much as it spent on its fire department, public-works department and city manager’s office combined, according to city budget documents.

But the golf course brought in just over half that sum, leaving the city with a deficit of $429,000. And the course consistently loses money: Over the past five years it has operated at a loss of nearly $2 million.

“It’s a tough thing to understand,” Perry said. People say, "We could be using that for police officers or code enforcement, but it’s hard to incentivize someone to move to Clewiston. Golf keeps the winter residents coming here.

“We have to provide some sort of recreation, and a lot of residents just love the course,” Perry added. “It’s part of our community.”

Declining numbers

Golf Magazine, in a 2015 rating of states by their “golfiness,” put Florida No.1, because of factors including the avidness of the players, the number of courses and the importance of golf to Floridians.

But there are limits to the Florida market, particularly in the spring and summer, when snowbirds head back north and locals seek cooler, shadier activities, according to Richard Singer, National Golf Foundation director of consulting services, who frequently works with local governments.

And in recent years, the market — the number of people who play golf and the total golf rounds played per year — has decreased for many municipal golf courses, the USA TODAY Network-Florida investigation revealed.

In 2005, 30 million people in the United States stepped onto a golf course and played a round. By 2016, the most recently available data, that number had dropped to 23.8 million, according to the National Golf Foundation. 

To remain competitive with Florida's estimated 1,100 golf courses, including exclusive, private courses, some local governments pour money into course upkeep and beautification at a significant cost to taxpayers, the investigation revealed.

The Martin County Golf Course, for one, has lost nearly $6.6 million since 2015, when it took over the course, according to data provided by the county. And yet, the county is considering a $12.3 million project to build a clubhouse and partially redesign the course.

Parks and Recreation Director Kevin Abbate defended the spending strategies as crucial for the course, which sits five miles from the Floridian National Golf Club, a course favored by former President Barack Obama.

"There are 34 golf courses just in Martin County. With that kind of competition, people can go play the latest modernized green," Abbate said. "That's just golf. Golfers are very finicky shoppers."

Fort Myers has adopted a similar strategy, and recently spent $7.8 million on improvements to its municipal golf courses, despite those courses losing $960,000 over the past five years just on operations, the investigation revealed.

It plans to spend nearly $390,000 this year to finish the ongoing capital-improvement projects, according to the city.

More:Road project splits golf course, paves way for more tax money

More:Fort Myers Country Club a link to city's past as it reaches 100 years in operation

Unique challenges

Even as some municipal courses try to remain competitive, they face challenges that private and privately-owned public clubs might not, according to Singer, the consultant.

Broadly speaking, elected officials know little about running golf courses and, in some cases, impede their success, according to Singer.

"It's difficult for them to operate as business people. They're politicians," Singer said. "What voters want and what you need to develop a good business may not be the same thing."

In addition, government regulations often slow down work that private businesses can complete quickly, Singer said.

To combat that lack of expertise, some courses turn to third-party management.

That can be beneficial: Depending on the deal, the government might be able to shift financial risk to the third party and hand over burdensome tasks, including hiring and firing and managing direct payroll, Singer said.

But bringing in a private operator means giving up some control, a decision that could endanger the objectives of municipal golf.

“For the government, the course is there for the benefit of the public, but a private operator may not view it that way," Singer said.

Brevard County experienced just that when its third-party manager, Orlando-based Integrity Golf Co., suddenly terminated its management agreement because it was losing money.

Integrity Golf — which had managed the course for 18 months — gave the county only two weeks notice, leaving Brevard officials seething and determined to find a new way forward.

“I don't know why the county government is in the golf business,” County Commission Chairwoman Rita Pritchett said. “I would like to get out of the business and quit losing money.”

In March, the commission voted to dispose of its struggling golf courses: Two tentatively are to go to the nonprofit Golf Brevard while a third is to be transferred to a homeowners association.

Financial success

Municipal governments tend to fall into two categories when it comes to subsidizing golf courses.

Some officials view their course as an amenity — something that enhances overall quality of life, like a park or a library — and are comfortable subsidizing the course, even if it is set up as an enterprise fund.

Others, though, "cannot stomach any subsidy," Singer said. "They need to break even or turn a profit.”

Sandridge Golf Course in Indian River County is in the latter category, according to County Commissioner Joe Flescher.

"It gives the average Joe the opportunity to go play golf on a very high-quality course," Flescher said, "but it has to live and die by the money it brings in."

Sandridge has been $2.8 million in the black over the past five years, making it one of only a handful anywhere in Florida that has, in fact, been largely self sufficient.

Twenty years ago, Sandridge began outsourcing maintenance, a step that saves about $200,000 annually and has improved the appearance of the course, which is crucial in developing customer loyalty, according to Bela Nagy, director of golf.

"If you don't have good greens, you aren't going to stay in business very long," Nagy said, adding that, still "there's a budget, and we stay within fairly closely."

The inexpensive maintenance also has allowed the course to keep rates low, according to Nagy.

"We seem to have found a balance over the years: the right price that makes the right amount of money," Nagy said. "I’d love to raise rates, but we've found that delicate balance and haven't raised rates in 14 years."

Singer said this balance has allowed the course to find a niche in the Florida golf market.

"It carved out a spot in upper middle," Singer said. "Courses that find a place somewhere in the middle tend to do well."

About this investigation

The USA TODAY Network-Florida analysis of municipal golf course records was made through public-records requests and review of annual budgets. Revenue was calculated from all operating and miscellaneous revenue minus subsidies from other government funds. Interfund loans were excluded.

Expenses include operating expenses, debt payments and major capital-improvement projects.