A different approach to running Janesville's golf courses
Crown Golf Properties has leased the Riverside and Blackhawk courses since 1995, and the Illinois-based company’s deal with the city expires at the end of the year.
Crown has lost money on the operations and is changing its business portfolio. As a result, the Janesville courses will have a new operator in January.
Crown’s deal with the city required annual payments to the city of $70,000 or 12 percent of revenues, whichever was greater. For the most part, Crown covered the expenses and reaped the revenues, while the city counted on a guaranteed revenue stream.
On the revenue side, Crown hasn’t been reaping much.
In 2009, the courses basically generated revenues for Crown of about $976,000, expenses of more than $1 million and a net operating loss of $29,000.
When the company’s lease payment to the city of $138,000 and a $17,000 contribution to a capital improvement fund were added in, the company lost nearly $190,000 on the Janesville courses.
Last year’s loss was not unique. City documents show similar scorecards back to 2002.
“There’s no question that they’ve been losing money,” said Jay Winzenz, the city’s director of administrative services. “But much to Crown’s credit, they’ve continued to maintain the courses despite losing money.”
The reasons for the losses are many, Winzenz said, but primarily center on changes in the local golf market and a struggling economy.
Annual rounds of golf at Riverside and Blackhawk have dropped from nearly 76,000 in 2002 to 54,000 last year. That trend started in 2003, the same year Glen Erin opened as an 18-hole private course adjacent to the Southern Wisconsin Regional Airport.
“We saw a drop of nearly 10,000 rounds with the opening of Glen Erin in 2003,” Winzenz said.
Since Glen Erin opened, it’s steadily grown to the point that it logged more than 24,000 rounds in both 2007 and 2008, said Rob Vega, the course’s general manager and head pro.
That’s undoubtedly drawn rounds away from the 18-hole Riverside layout, as did the 1995 opening of Prairie Woods east of Janesville.
“The golf course boom several years ago just divided up the pie more, and the economy hasn’t helped either,” Winzenz said.
Jeff Mayers, an author of several books on golf in Wisconsin, agrees. Current economic woes arrived on the heels of a huge increase in golf course projects in the 1990s and early 2000s.
“Rock County has been hit pretty hard,” Mayers said. “Golf is disposable income, and people in a tough economy are going to cut back with their disposable income no matter how nice the course is or how affordable it is.
“I’d sure hate to see a great muni like that go to seed.”
At this point, no one is even remotely suggesting that’s what will happen to the two Janesville courses.
In fact, the city is taking steps that could some day return the operations to profitability.
A new course
The city’s golf course advisory committee last week discussed a plan to hire a new management company to run the Janesville courses. The city council could sign off on the plan next month.
The different approach will mean the city likely will pay the company a flat fee to run the operations, plus an incentive fee based on revenues.
That puts the operations’ expenses and revenues—the risks and rewards—squarely on the city’s books, Winzenz said.
“Under our lease agreement with Crown, the city didn’t really have much of the risk,” he said. “But given the changes in the golf market and the economic challenges, we’ve found that not a lot of private companies want to enter into that kind of arrangement anymore.”
Winzenz said the city is negotiating with the Northbrook, Ill.-based KemperSports to operate Riverside and Blackhawk.
Among other things, KemperSports operates nationally ranked golf courses and tournament venues such as Bandon Dunes Golf Resort, Dorado Beach Resort & Club, The Glen Club, Desert Willow Golf Resort and Chambers Bay, host of this year’s U.S. Amateur Championship and the 2015 U.S. Open.
Winzenz said a change in operating structure isn’t likely to turn the courses into cash cows.
If the city had been fully operating the courses in 2009, it would have lost about $132,000, due in large part to administrative and debt service costs for major capital improvements, he said.
“The reality is that for the next couple years, we’ll probably break even on the courses,” he said.
The challenge, he said, will be to improve the revenue and expense sides of the equation while still maintaining the courses at the levels for which they’ve become known.
“We think there are some improvements we can make to Riverside, and costs we can drive down while still being price competitive,” he said. “While we don’t want to make the course more difficult, we think we can some day return it to profitability.”
Steve Stricker is busy today representing the United States in the 2010 Ryder Cup in Wales, and Tony Romo is enjoying a day off as quarterback for the Dallas Cowboys.
Neither will be seen on this fall day at Janesville’s Riverside Golf Course, but both have had their moments in the sun at the 18-hole course that’s considered one of the best municipal layouts in the state.
“There’s no doubt that it’s a great track,” said Jeff Mayers, who’s co-authored three books on golf in Wisconsin. His latest is “Golf Wisconsin: The Official Guide to the State’s Top 25 Public Courses.”
“Riverside is mentioned in all the books I’ve been a part of. Beautiful location, well-maintained, great staff, and it can be a hard course if you get off track.”
Running along the bluffs above the Rock River, Riverside has routinely been ranked as one of the best municipal courses in the state. Golf Digest magazine gave it a 3.5 star rating, and with competitive greens fees, it’s been named one of the best values in public golf.
Built in 1924 and opened for play one year later, Riverside was redesigned in 1946 by Robert Bruce Harris, a golf course architect noted for his work on traditional, parkland-style courses.
“He used that land perfectly for the redesign,” Mayers said. “He used all the land, shaped it and really made something special.”
Gene Haas first stepped onto a Riverside tee box in the 1950s, “when the thorn-apple trees were still very small,” he quipped.
Haas is legendary in Wisconsin golf circles. As executive director of the Wisconsin State Golf Association, he was inducted into the Wisconsin Golf Hall of Fame in 1991, 16 years before being joined by PGA touring pros Stricker and Jerry Kelly.
Haas is also the man who started the Ray Fisher State Medal Play Championship, which after four years in the Madison area moved to Riverside in 1971. Stricker won the event in 1989.
“I would certainly classify Riverside as one of the more interesting, better public golf facilities in Wisconsin,” Haas said from his home in the Milwaukee suburbs. “I know players from around the state really look forward to playing the Fisher on that course.
“Probably the only thing it doesn’t have is length, and that’s because it’s constrained by the land.”
Riverside is not unique in that regard, he said. Equipment advances have made many courses play shorter.
“These older facilities—public or private—have not become obsolete, but they are much more manageable for the players who have the distance,” he said. “But Riverside very much holds its own.”
Curt Terry, a longtime Riverside player, is optimistic that Riverside will continue to be a gem. In fact, he thinks it can become even better.
“I think that if the city would put some money into it, re-do some bunkers and fairways and move some tee boxes, we could take the course to a higher level,” Terry said. “We’ve got to look at it as a revenue generator.
“But that’s tough because rounds are down, budgets are tight and the city really isn’t in the golf course business. Very few municipalities are.”
Terry understands that from his years of service on the city’s golf course advisory committee. Last week, the committee recommended that the city hire an Illinois company to manage the two municipal courses in Janesville.
Since 1991, Greenvisions and Crown Golf Properties leased the courses from the city and, for the most part, incurred the expenses and pocketed the revenues. Starting next year, it’s likely that the new management company will run the operations for a flat fee.
The city will be responsible for all expenses and will put any revenues into its own coffers.
Terry said most golfers understand the economics of the situation and are optimistic for the future. There is a concern, however, for the longtime staff members who run the two courses and are Crown Golf employees.
“They are very good people who know the operations of those courses inside and out,” Terry said.
The two courses tend to serve different groups of golfers. While the 18-hole Riverside generally caters to more to serious players, the nine-hole Blackhawk is a big draw for seniors and casual golfers looking for quick rounds.
“They are great assets for the community,” he said. “They will continue to be, but both need some work.”