Kent looks to make Riverbend Golf Complex profitable

City leaders are trying to figure out a business plan to make Kent’s Riverbend Golf Complex profitable rather than suffering annual losses of about $300,000 per year.

“The end goal is for the golf course to recognize a profit at the end of each year, which can then be reinvested back into the course’s infrastructure needs and/or its working capital,” Parks Director Julie Parascondola said in an email. “That’s what we are working through now – what it will take to achieve that goal.

“There are many challenges and policy decisions to work through first before we can determine if that goal is achievable or not, including creating a new business model that also no longer includes operating the par 3.”

City Council efforts to make the 18-hole course, driving range and pro shop profitable are in the analysis and data gathering stage by city staff and consultants. The council’s Parks & Human Services Committee heard a report last week from Leon Younger, president of Indiana-based Pros Consulting.

“Even if you reduce debt and make it clean through the sale of the par 3 course, you still have issues that you have to deal with in updating the site because the site needs some real improvement,” said Younger, whose company will receive up to $60,000 from the city for its analysis and data gathering.

The City Council voted 5-2 in May to sell the Riverbend par 3 golf course property for $10.5 million to a developer who plans to build a mixed-use project with 500 apartments. The council put the par 3 course up for sale in 2014 to help eliminate the city’s enterprise golf fund debt of nearly $4 million and allow for about $6 million in capital improvements to the 18-hole course and driving range as a way to draw more players to boost revenue.

The debt is owed to an inter-fund loan, money that the city borrowed from its water and fleet funds to help pay off the bond for the golf complex.

“We are also validating many of the strengths that Riverbend Golf Complex brings and the staff team that operate the course have already advanced,” Parascondola said. “We have very dedicated professionals at Riverbend, who continue to work hard to address this challenge and having this business plan in place will help focus those collective efforts as well as provide new areas of opportunity to attain the best return on investment.”

Heavy financial losses

Riverbend, along West Meeker Street, operates at a deficit of about $300,000 per year, losses covered out of the city’s general fund. The complex lost $713,080 in 2016 (which includes a one-time expense of $300,000 for a new irrigation well paid out of the general fund); $206,383 in 2015; and $203,678 in 2014, according to city financial reports. Riverbend lost a total of about $1.7 million the previous five years.

“I think the sixth biggest city in the state should have golf and provide golf for its residents,” Councilman Dennis Higgins said at the committee meeting. “I don’t think there is any reason we can’t make it be successful in Kent.”

But Higgins then mentioned how people have emailed him about whether the city can make money from its golf course since fewer people are playing the sport.

“Are we deceiving ourselves if we reinvest in this course?” Higgins said to the consultant.

Younger, whose company has completed more than 100 recreation facility, aquatic, sports complex and park feasibility studies over the last 21 years, said people aren’t playing golf as often.

“Golf is flat and has been the last three or four years,” Younger said. “Time is the biggest issue with golf. It takes five to six hours to play and a lot of people don’t want to take that time. People are still playing, just not as much or as often. They played 10 rounds five years ago and now play five, but they are still playing.”

Riverbend had 64,506 rounds played in 2016, down slightly from 66,245 in 2015 but up from the 60,032 in 2014 and 55,732 in 2013.

Golf is more than just playing the sport, Younger said.

“It’s about the experience,” he said. “It’s a social place to meet and have fun. A place for families, friends or corporations to gather. It gets as much recognition as anything the park system provides.

“But you built that course when golf was the hottest thing going.”

Riverbend opened in 1989. The city took over operations from a private contractor in 2000.

Younger added that nine-hole courses have struggled to remain open but 18-hole courses can still succeed. Kent parks officials have talked about including shorter tees placed along the 18-hole course for those who want to play a shorter course. Younger said that would be a good flexibility to have.

Improvements needed

The improvements needed at Riverbend include an upgraded driving range.

“It’s tired,” Younger said. “It runs a lot of play through it, but it needs a lot of help and is one of best revenue producing pieces of the course.”

The driving range might need a second level or simulator games to help draw more golfers, Younger said.

About 20 percent of the golfers are women. That number could increase if restrooms were built along the course, according to a Riverbend survey of female golfers.

Riverbend also needs a restaurant as that space is empty. But the last two restaurants failed after a short time. A recent city survey shows most golfers want a sports bar-type restaurant.

“You need a clubhouse architect to look at the building to expand the pro shop and set up rooms for men’s and women’s club meetings,” Younger said. “You need to build around the experience, which is a sports bar focus, 60 percent want that, only 1 percent want fine dining, which is what your last two (restaurants) have been, more on the fine dining side.”

Despite the drawbacks, Riverbend remains popular with many golfers. About 80 percent of the golfers come from outside the city. Younger said ways need to be found to keep those golfers and attract more local golfers. The men’s club has 570 members and the women’s club about 100 members.

“They love the course because it’s flat, you get a lot of walkers, and the greens and fairways are good,” Younger said. “I think it sets up really nicely and is a fun course to play. You want a course challenging but still fun and that’s what you have.”

But Riverbend’s age is showing.

“You need to update the facility so it can serve the next 25 to 30 years,” the consultant said.

Riverbend also battles the rainy days. If it rains too much, most golfers don’t play. That means the city brings in most of its revenue during the dry days.

“Seventy-five percent of golf is played in six months at Riverbend, and it’s expensive to stay open the other months,” Younger said. “It needs to be determined how best to manage that.”

Costs need to be lowered as well, according to the consultant. Overhead costs for information technology, fleet charges, finance charges, human resources and legal costs are high at $250,000, Younger said.

“The goal here is to have a revenue-producing golf course – that’s difficult with so many overhead charges,” he said.

The next steps include city staff and the consultants finishing up the analysis.

“It has a lot of complicated layers, but we hope to have the final recommendations for consideration by the mayor and City Council, where applicable, by September,” Parascondola said.