San Diego Municipal Golfer's Alliance

SDMGA Founders testify about exploitation of City by USGA and Friends of Torrey Pines (FOTP) at City Council Budget Hearing. 

 

On May 23, 2007, John Beaver and Paul Spiegelman testified about the raw deal the City is getting from the USGA thanks to the so-called Friends of Torrey Pines. The North Course will be closed for months to set up corporate tents and other amenities, but the City will not be compensated adequately for lost revenue. Meanwhile, the City is spending millions on preparations but is only getting $350,000 to defray the costs.  This while the Friends of Torrey Pines get $3.5 million and the USGA will take in more than $50 million. Shouldn’t the USGA pay for the full costs of staging the Open? Why are the Friends of Torrey Pines taking the City’s money? The details are given below.

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THE CITY IS BEING SHORTCHANGED BY THE USGA AND FOTP

The Compensation to the City is Inadequate:

1.  Disruption Fee: City will be losing (net) revenue in the neighborhood of 5 million by staging the Open

1. Usual fee for disruption is about $5 million

·         City is getting only 500K for disruption.  

·         Disruption cost will be far more than 500K: North will be closed to 18 hole play from March likely through August for corporate tent construction, driving range on 10^th fairway etc. Adding the South closing and you might have 6 months of revenue at 50% of normal. I would guesstimate this to be in the neighborhood of 5 -7 million (based on projected revenues in the neighborhood of 18 million for whole golf enterprise fund)

2.  Renovation of South Costs: Should Far Exceed 350K Paid to City; Golf Operations should give an accounting

1. USGA contract calls for $350 K to compensate for changes to the course

2. City has already laid out money for changes to 6^th, 13^th and 18^th, plus various other tree and        brush removal projects.

3. Last December City council authorized additional payments for changes to the 4^th and 5^th holes and for new cart paths (to protect the kikuyu grass), changes to clubhouse, halfway house etc. See Tod Leonard's November 21, 2006 column for details click here.

4. Recent herbicide applications and other projects indicate that intense attention is resulting in substantial additional labor and material costs to get the course ready for the Open

5. The City needs an accurate measure of all the costs properly allocable to Open preparations to properly calculate the shortfall

6. These figures do not count the increased maintenance costs that the City will have to pay to keep the South course up to its new level.

Revenues Which Should Be Going to City are Going to FOTP:

1.  FOTP is receiving up to $3.5 million in corporate tent sales revenue

2.    The USGA contract calls for payments from FOTP to City of $1.2 million: $500 K disruption; $350K renovation; $350 K for added police and fire.

3.    This leaves $2.3 in revenues which should be going to City

4.    Solutions:

1. Any profits on Corporate Tent sales should go to City not FOTP; construction of and damage from the tents and other Open-related activities on the North is the principal reason that North may be unplayable for as much as 6 months

2. USGA should be asked to contribute its full share of costs properly applicable to the Open;

3. City should enact more resident friendly rules to compensate local golfers who pay the real costs of the Open in disruption, lack of access, and higher maintenance fees. Possible rules changes:

·         Make Fridays a weekday for residents

·         Assure 70% of prime tee times for residents

·         Negotiate special Torrey disruption rates at other golf courses in the City.

 

                                    Respectfully submitted

 

                                    San Diego Municipal Golfers’ Alliance

                                    John Beaver and Paul Spiegelman

 

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