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"Due diligence"?! Golf and money figures just never add up.
Responding to May 21 Times Picayune article

Debra Howell

The City Park Golf Projections done by Economic Research Associates were downloadable from their website and are also attached here. Assuming the 36-hole plan that keeps the North Course open (since that is likely to be the only one fundable): at year 3, which is the first year both courses are fully open, they're projecting net operating revenues of $3,573,000, net operating expenses of $3,048,000 (including cost of goods sold), and net operating income of only $525,000.

This is basically the same revenues as the old courses pre-Katrina, higher expenses as would be expected, but not a whole lot of improvement in net income to show for it all. At year 5, there is an inexplicable increase in rounds played, which trigger an equally inexplicable but steadily increasing rise in revenues and net income.

However, even these low income figures in year 3 are based on 56,000 rounds of golf being played at City Park, 38,000 at the old North Course and 24,000 at the new championship course! In Louisiana, the average number of rounds per course in 2007 and 2008 was under 22,000/year; even at the TPC Louisiana course, reaching 26,000 rounds in 2007 and 2008 was considered a highly successful number (From a Times-Picayune article of 4-19-09, "Going for the Green").

From where and with whom are these remarkable rounds of golf going to materialize? There is no explanation attached for how these numbers were derived, and they seem absurd... yet we are supposed to believe that the City Park Board has practiced "due diligence" by accepting them?

Money Background

What has happened at Audubon is revealing regarding the money/success topic, since the new Audubon golf course has consistently lost money every year since its opening despite glowing income projections--which one is unlikely to hear about from anyone at Audubon or the Times-Picayune.

In addition, Audubon has had to drop its green fees to shore up falling demand since its opening. They are currently $30 weekdays and $40 weekends, including cart and taxes, with no discount for LA residents. In 2003, for LA residents, they were $44 weekdays and $51 weekends, including cart and taxes. The projected numbers for rounds played and green fees at City Park should be filtered through this real life data, as well as the infamous state payments for unplayed projected rounds at the TPC Louisiana.

In 2000, the Audubon Golf Course had net Operating Income of $8,546. It closed down in mid-2001, and the new course opened in October 2002.

Year One: the 2003 ANI report shows a net Operating Loss of $336,300, despite operating revenues of $1,818,402. The Golf Study had projected a net cash flow of $140,525 that first year instead.

Year Five: the 2007 ANI report shows a net Operating Loss of $415,819, with operating revenues of $1,853,945. The Golf Study had projected a positive net of $370,141 in the fifth year instead.

City Park always made more money from golf than Audubon, although it went down considerably when they hired outside management in Nov 2002.

In fiscal year Sept 01-Sept 02, golf operating revenue was $3,355,098, expenses were $2,165,757, leaving a net operating income of $1,189,341.

In 2002-03, net operating income was $708,313 (revenues: $3,306,249, expenses: $2,597,936); in 2003-04, it was $586,425 (revenues: $3,388,991, expenses: $2,802,566).

In the last year of operation pre-Katrina, Sept 04-Sept 05, golf operating revenue was $3,081,039, expenses were $2,693,994, leaving a net operating income of $387,045.

City Park Golf income projections