After years of being stuck in a sand trap, the city of Napa may be about to hit safely onto the green.

The city is negotiating a lease with the management company that runs the Napa Golf Course at Kennedy Park, an agreement it hopes will make the course profitable and no longer a drain on city finances.

Officials said the lease could be signed by Feb. 1, making CourseCo Inc. financially responsible for the course that has been sucking General Fund money for at least the past decade.

“If this whole thing turns out well, as everybody thinks it can, we would have a positive cash flow for the city,” said Larry Mazzuca, director of the city’s Parks and Recreation department.

“The golfer out there playing today is going to benefit from this because the course will be in better condition (and) it guarantees that we can have our own municipal golf course. ... It’s a hell of a deal, a great thing for Napa golfers.”

The lease, which would take effect upon being signed, would bolster the course in the uphill battle that seems to be facing public and private golf courses everywhere, Mazzuca said.

“Courses across the country are losing money,” Mazzuca said. “Cities all thought golf courses were money makers, and then there became an over- saturation of golf courses. When the recession hit about five years ago, golf courses really started suffering. ... Ours was no exception, except that it was suffering before the recession.”

Mazzuca said for the first time in history, more courses are closing nationally than are opening. Younger generations are not latching onto the sport like their senior counterparts, he said.

Napa County is home to at least seven public or semi-public courses, and there are numerous others in surrounding cities.

About 35,000 rounds are played at the Napa Golf Course annually, a drop from the roughly 43,000 to 44,000 it hosted five years ago, Mazzuca said. 

The lease would allow CourseCo to expand the course’s limited food and beverage service options and install a semi-permanent tent to host weddings, tournaments and other events that can supplement course expenses, Mazzuca said. CourseCo would, in effect, make the course not only a place for golf, but a place for special events of groups 150 to 175 people.

“It’s not increasing rounds of golf necessarily that’s going to change the course of golf in our community,” Mazzuca said. “It’s other things in addition to golf we could do to bring in revenue.”

Until now, the course lacked facilities to host large event, including golf tournaments, said Mazzuca, who described the tent as a well-built structure with cloth walls, hard wood floors, heating and air conditioning.

“We lost a lot of our golf because we didn’t have golf tournaments,” Mazzuca said, explaining that a fair amount of business likely went to the nearby Chardonnay Golf Club and Eagle Vines Vineyards and Golf Course, which are set up for events.

Mazzuca said the city turns down tournaments and weddings “all the time” because the course cannot currently handle such events. CourseCo, which conducted a market survey, said there is a place for an event venue that locals can afford.

“We think we can come in at a better price point than (surrounding courses) and offer a different type of experience,” said Michael Sharp, vice president of operations for CourseCo.

“We’re not trying to compete with the five star and $200 per plate facilities. We think we have a specific price point we can hit in Napa. We’re sitting on a gem here and we think once we get the people out here to show them the facility, they will give us the thumbs up and book with us.”

The subject of how to save the golf course and end ongoing General Fund subsidies is not a new one to the council, which in December, allocated $125,000 from city accounts to keep the course solvent through the current fiscal year. Since 2008, the council has spent $410,000 from its General Fund to keep the doors open, Mazzuca said.

Mazzuca said he did not know the specifics of subsidies in the five years before 2008, but said they were probably similar to the past five years.

“Since 2005, we’ve had one year the golf course has made money and it was less than $5,000,” Mazzuca said.

In 2011, the city raised fees on rounds of golf by several dollars, something Mazzuca said proved not to be enough. “It made a dent but it didn’t come close to addressing the issue,” he said.

About two years ago, the council told staff it no longer wanted to subsidize the course and directed them to find an alternate course of action. In November, 2011, the council discussed potential options for the course in a closed-session meeting.

“We brought to the council a list of what we thought were viable options,” Mazzuca said. A city may discuss real estate and property negotiations in private so as to protect the value of an asset, per open meeting laws.

Among the options presented to the council were to redevelop a portion of the property and keep only 9 holes; close the course and fence it up; or lease the asset, Mazzuca said.

Mazzuca approached CourseCo about the idea, which he said got a less-than-enthusiastic response initially.

“It was one of the worst times to do that because who wants to take someone else’s loss and make it their own,” Mazzuca said. Over the course of six or seven months, the Petaluma-based company, which runs public courses along the West Coast, from Southern California to Washington, came around to the idea, recognizing that leasing a course in Napa is an asset to a company, he said.

Under the draft lease, which is in the hands of CourseCo and may come before the city within a week, CourseCo would make an initial investment of at least $375,000 into the course. That would cover  purchase of the tent, a parking lot upgrade, new landscaping, restoration of course paths and an upgrade to course drainage. Currently, the course can flood in small storms.

CourseCo will pay the city a base rent starting at $1,000 a year in the first few years, then increasing to more than $15,000 per year over the course of the contract, according to a city report. CourseCo will also pay a rent for the food and beverage space, also beginning at a rate of $1,000 and increasing to more than $25,000 per year. If food and beverage revenue exceeds that rent amount, the city will receive a portion of the sales.

Both CourseCo and the city would enter into a capital improvement plan for the course, each contributing a percentage of course revenue to a fund beginning in year four of the agreement. They would each contribute 2 percent of course revenue, up to $20,000. That cap will increase by $2,000 annually, up to $32,000 in 10 years, according to the city. The fund will be used to purchase equipment and make physical improvements to the course and facilities.

Sharp said capital investment in the course has almost been non-existent in the past decade because the city has not had money. Only last summer, for the first time in 10 years, did the city balance its budget without the use of reserves, following years of operational cuts and concessions by employees.

CourseCo would receive a 10-year-lease, which could be extended another five years. At the 15-year mark, both parties would have to agree to extend the lease another five years, for a total lease of up to 20 years.

The city stands to make at least $278,200 in the first 10 years of the lease, just from rent alone, according to a city staff report. The actual amount could be twice that if the revenues brought in through golf and events are higher than the base rent, the city said.

Of that pot of revenue, the city would pay a maximum of $182,000 over 10 years for course maintenance, regardless of how much additional revenue the city receives. The city could net at least $96,200 in 10 years, officials said.

Some have questioned the city’s plan to lease to CourseCo. Karen Stratvert, a Napa golfer, has voiced concerns over what have largely been behind-the-scenes negotiations.

“I find it deeply disturbing that there was no public input, and that this deal is being done without solicitation of bids from other parties,” Stratvert wrote in an email to the Register. “I expect government to be conducted in an open, visible manner.”

The city is not required to put a lease out to bid, per its municipal code, but Stratvert said she’d like to see that happen. She said the course is a public asset and the city owes it to its citizens to get the best available deal.

Former Councilman Mark van Gorder, who left the council in December when his term expired, was the only member of the board to vote in November against authorizing the city manager to execute a lease agreement. He said his dissent had nothing to do with the quality of the proposed lease, but rather with the little public input received on the pending agreement.

“I didn’t feel we had done enough to get public input,” van Gorder said. “I don’t have any issue with the Parks and Recreation Department’s recommendation or with CourseCo. I just think it could have benefited from a little more public input.”

On Thursday, the city held a meeting at the course to address why it did not issue a request for proposals to lease the course and why the matter was discussed in private.

“Why did we not go out (to bid)?” Mazzuca said. “I still have a (management) agreement with CourseCo for a year and a half. When we started this process, it was for 2 1/2 years. If my operator gets the idea that I want to test the market out, he has a clause in there that he can leave. In this economy, I might have a harder time finding another operator who would do as good of a job. On top of that, (CourseCo is) a good partner.”

CourseCo said it had discussed with golfers other ways to possibly improve the golfing experience. Sharp said it’s unlikely the Napa Golf Course will get into the business of high-end dining, but took suggestions ranging from expanding current food service hours to security to lighting the driving range.

Following Thursday’s two-hour meeting attended by about 15 golfers,  golfer Jack Walters said he came to the meeting skeptical, but left happy after hearing the plans.

“I am all for the lease,” said Walters, who added that he didn’t have a problem with the city subsidizing the golf course. The city subsidizes its non-golfing parks, he noted.

Mazzuca said figuring out what to do with the course has consumed him for the past year and he feels the city has found the best deal.

“At the end of the day, what really drove us was what’s best for this community,” he said. “And we thought that this was.”

(9) comments

country girl

35000 rounds times a low estimate of $30 per round average is over $1million per year. There is less than 20 employees most which are part time and earn close to minimum wage. The City of Napa needs to absorb the employees under the Parks and Recreation Dept and get rid of CourseCo. Keep the money locally. Locals will do a better job managing their course.

country girl

Another revenue maker is the practice range. There range needs to be graded so the water drains and you can hit balls year round. There are sections you can't hit to because it is too wet/muddy/bumpy to retrieve balls from. The range machine is constantly running out of balls. I'm not sure if that is because there are no nets on the left and right of the range and perhaps a lot of balls are lost in the water hazards on each side. They need to invest in nets and more balls so they don't run out. Another opportunity is to put lights on the range so you can have extended practice time. Ranges in San Francisco have ball machines that accept cash and credit cards. You can hit balls 24hrs. Sacramento also has a huge 24 hr practice range with 10 times the number of hitting stalls. They even have mats that pre-load your ball on a tee automatically. Extended range hours is something resort course don't offer. It is untapped opportunity. PUC has 24hr tennis courts for the public.

country girl

One easy money maker is having a good food and beverage area (consistent hours, advertised, some dining deals, and comfortable where people can socialize). There hasn't been a strong effort to get a the 10am-6pm consistently staffed. I've been there plenty of times between 10am and 6pm and the food area is closed. College students could easily eat lunch at the course if there was some advertising and consistent and reasonable dining hours. There is never a "cart girl/boy" servicing golfers on the course with refreshments. It says you don't want my money if I have to track someone down just to place an order. The whole proshop/bar/dining area needs a makeover. The bar is completely separate from the food area so if you have more than 2 golfing groups there is barely room for standing. That whole setup needs to be integrated better so people will actually want to linger after a round for lunch or a light dinner.

country girl

This is amazing to me. So the management company that has been is responsible for managing and maintaining the Napa Golf Course has not made the City of Napa any money in the last few years but has COST the city money?!?! And they haven't done much upkeep and improvements?!? and CourseCo is still what is best for Napa Golf Course? I don't think so. What it looks like to me is CourseCo is happy to get paid FIRST with a contract and the residents of Napa get stuck with a poorly maintained course and having to foot the bill.
Opening this for bid and discussion would be wise.

rooddog

I am really hoping for good things to come from this. Kennedy is a beautiful course with a rich history and deserves better treatment. The staff does the best they can, but have not had much to work with for a long time.
As for "enjoying" more rounds at Eagle Vines, I hope you don't mind a six-hour round of golf. The last few times I have tried to play at Eagle Vines the course was totally backed up with not a marshall in sight. Too bad, it's a great track.

Really napa

Build some drains!

Project707

So looks like more rounds to be enjoyed at eagle vines instead of at the wedding crashers course.

glenroy
glenroy

…connecting the dots….this is a text book case in how not to allow government management into a private sector market because in the end it costs the tax payer needlessly. Changes were needed a long time ago but weren't allowed.
Berryessa is another example…there’s nothing wrong with private sector management of public assets…in the end it’s the only way it comes close to paying for itself.

napablogger
napablogger

It sounds like a good deal for Napa and Napa golfers. Sometimes the best way to do something for the public is to have confidential negotiations, the law allows for that in some cases and for good reason. The way to judge this is five years down the road.

The Napa golf course is a great asset for the community, it is a great muni course (and I have played a lot of them) and I am glad they have a plan to make it work.

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