City seeks golf course operator

The City of Omaha will seek a private company to take over its seven municipal golf courses.

The city was advised to make the move by a Florida consultant to counter financial losses at most of the courses. The consultant did not weigh in, however, on whether the courses would be better off in private hands.

Instead, NGF Consulting of Jupiter, Fla., said Omaha should request proposals in order to “make an informed decision regarding the future of the municipal Golf System.” The World-Herald has obtained a copy of the report by NGF Consulting, a subsidiary of the National Golf Foundation. The report was finalized late last week.

Omaha Parks Director Steve Scarpello said Monday that the city will develop a request for proposals. He didn't have a timeline for when that would happen.

“We just got finished reading the report,” he said. “We have no idea if we're going to make any change. But if we did, we would want to do it in 2010.”

The National Golf Foundation will help the city prepare a request. Scarpello said the request may be broad enough to draw a range of proposals.

“We're just going to give it our best shot,” he said. “We don't know ultimately if we'll get an offer that is a benefit to the city.”

Mayor Jim Suttle's office commissioned the study last summer. The city's golf fund, which is supported by greens fees, cart rental money and concessions, has been in the red for years. Through last year the fund had amassed $760,000 in losses.

If losses aren't stemmed, the city might be forced to subsidize golf operations with tax money.

All four of the city's nine-hole courses are propped up financially by profits from Omaha's three city-run 18-hole courses. Use has been down at all seven courses, with operating losses topping $320,000 in 2008 alone.

The nine-hole Westwood Heights course near 132nd Street and West Center Road was slated to be closed this year until an increase in golf fees at all city-run courses saved it.

State law bars Omaha from selling its golf courses or other parkland. Omaha has two courses under private management — the Knolls near 120th and West Maple Road and the Steve Hogan course at Miller Park, 30th Street and Redick Avenue.

The consultant looked at the pros and cons of a private company taking over all course operations at the remaining seven municipal courses. The report does not recommend simply turning over only the course management because the city still would be responsible for many of the costs of running the courses.

The benefits of a private takeover include shifting all operation costs to the private company and providing a reliable revenue stream to the city through contract fees.

Drawbacks to such a takeover, as cited in the report, include the city's loss of control over golf fees and other details.

Even if the courses were turned over to a private company, the city would most likely still have to fund major improvements to the courses. The consultant doubted that a private company would be able to turn a profit if it had to pay for day-to-day course operations, fund major improvements and pay the city contract fees.

The consultant considered only an all-or-nothing approach for the seven courses, which would avoid letting a company cherry-pick the better-performing 18-hole courses.

The analysis did not include the option of closing any course. While the nine-hole courses struggle financially, they “serve a noble purpose” by providing outlets for less affluent residents and helping youths learn the game, the report said.

Private operation of city courses has gained favor in recent years, the consultant said, because of increased course competition and the faltering economy.

The report states that the Omaha area has 64 golf facilities — 51 of which are open to the public. Almost a fifth of the golf holes open to the public in the Omaha area were added in the past 10 years. That growth contributed to the drop in the number of rounds played at established Omaha courses since the late 1990s.

If the city ends up keeping control of the courses, the report recommends improving the marketing of the courses. The consultants noted that Omaha's courses do not undertake the sophisticated marketing efforts common with other courses, such as mass e-mails to users touting new features or deals.

Scarpello said that the City of Omaha does not offer discounts and other incentives offered by private operations.

Contact the writer:

444-1149, tom.shaw@owh.com