Historically, Golf was the big earner for City Park, not surprising when you consider that four golf courses consumed over half of the park. One of the biggest mysteries surrounding the pending new golf course construction and management contract remains the money: specifically, how much will the park receive, and what happens if the glowing income projections for the new course fall short, as they have done so extremely at the Audubon Park Golf Course. We thought it appropriate to outline City Park Golf's historical income figures as a way to shed light on the numbers that any new contractor should be expected to meet or exceed.

Oct 2000-Sept 2001: The top revenue producer for the park was Golf, followed by Catering and Amusements.
Golf Operating Revenue: $ 3,233,884
Golf Operating Expenses: $ 2,314,076
Net Income(Loss): $ 919,808

Oct 2001-Sept 2002: The top revenue producer for the park was Golf, followed by Catering and Amusements. This was the only year out of the five pre-Katrina that golf remained the highest producer of net dollars for the park because outside management was brought in late in 2002 and net income from Golf subsequently dropped.
Golf Operating Revenue: $ 3,355,098
Golf Operating Expenses: $ 2,165,757
Net Income(Loss): $ 1,189,341

On November 22, 2002, the Park entered into a management agreement with Kemper Sports Management, Inc (KSM). As part of the management agreement, KSM provided certain procurement functions to and for the benefit of the Park, including solicitation of proposals for certain operations, management and maintenance responsibilities in regard to the facilities and related golf services under the supervision of the CEO and Board of Commissioners of the Park. The agreement term was from January 1, 2003 to December 31, 2007, unless terminated according to the cancellation provisions of the agreement. The agreement could be renewed for two additional years by mutual written agreement of the parties. The contract with KSM was terminated after Katrina.

Kemper received a management fee equal to 15% of the first $1,200,000 of net profits. KSM was also paid an incentive management fee equal to 17.5% of net profits between $1,200,000 and $1,500,000, 20% of net profits between $1,500,000 and $2,000,000 and 25% of net profits in excess of $2,000,000.

Oct 2002-Sept 2003: the top gross revenue producer was again Golf, but due to golf management costs, Golf fell behind Catering and Amusements for net income for the first time.
Golf Operating Revenue: $ 3,306,249
Golf Operating Expenses: $ 2,597,936
Golf Management Fee: $ 2,083,692
Net Income(Loss): $ 708,313

Oct 2003-Sept 2004: the top gross revenue producer was Golf.
Golf Operating Revenue: $ 3,388,991
Golf Operating Expenses: $ 2,802,566
Golf Management Fee: $ 2,802,566
Net Income(Loss): $ 586,425

Oct 2004-Sept 2005: the top gross revenue producer was Golf.
Golf Operating Revenue: $ 3,081,039
Golf Operating Expenses: $ 2,693,994
Golf Management Fee: $ 2,522,426
Net Income(Loss): $ 387,045

While Golf gross revenues varied little over the 5-year span pre-Katrina, net revenues clearly plummeted after outside management was brought in to operate the courses. It is difficult to figure out why this direction was chosen, in fact.

Oct 2005-Sept 2006: after Katrina, the Driving Range was the only part of the golf courses in operation.
Golf Operating Revenue: $ 144,644
Golf Operating Expenses: $ 24,459
Golf Management Fee: $ 107
Net Income(Loss): $ 120,185

Oct 2006-June 2007: the Driving Range was the only part of the golf courses in operation.
Golf Operating Revenue: $ 150,947
Golf Operating Expenses: $ 42,900
Golf Management Fee: $ 0
Net Income(Loss): $ 108,047

July 2007-June 2008: the Driving Range was the only part of the golf courses in operation.
Golf Operating Revenue: $ 159,704
Golf Operating Expenses: $ 70,928
Golf Management Fee: $ 0
Net Income(Loss): $ 88,776

July 2008-June 2009: The North Course was reopened in September 2008 under the management of Billy Caspar Golf.
Golf Operating Revenue: $ 1,153,578
Golf Operating Expenses: $ 1,057,439
Golf Management Fee: $ 1,057,439
Net Income(Loss): $ 96,139

While we don't yet know the income dollar projections proposed by the applicant for the new golf course construction and management contract, we do have some figures from the "Business Term Sheet" submitted by the Bayou District Foundation in 2007 that started this entire debate and resulted in amendments to the Golf portion of the City Park Master Plan in 2007.

In addition to the "lease" terms of 50 years with four ten-year renewal options, the term sheet proposes "start up rent" of $100,000 per year, commencing 60 days after approval of the lease terms, and base rent equal to $500,000 per year upon opening of the courses (or two years from lease execution). In addition, the Tenant would pay as additional rent an amount equal to 33% of net operating profit generated by golf operations. To the extent that New Orleans City Park provides in excess of 33% of monies necessary to construct the proposed facilities, additional rent shall be adjusted to equal that percentage of total project costs.

$500,000 per year. This seems to be the critical number that tempted the City Park Board to sign away half the park to a private developer to become an accessory use to a housing development, although it is clearly less than the Park netted from Golf in all pre-Katrina years except the last one. We await the next step in the process becoming public.

Bayou District Foundation-City Park Proposed Term Sheet