Backup Documents 03/14/2017 Item #11ENick D’Onofrio
Hunden Strategic Partners
March 14, 2017
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Key Questions
o What is the purpose of Collier County developing its own golf course?
o What are the costs and benefits?
o Are there alternatives that achieve similar goals?
o What are national recreational golf trends and how do they relate to the long-term
viability of a publicly owned golf course?
o What are demographic trends in Florida, specifically Collier County? How do they
impact recreational golf?
o What is the present condition of golf facilities and infrastructure throughout Collier
County?
o What are the costs/benefits in providing a publicly managed golf course
versus a privately managed golf course in Collier County?
Headlines
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o The purpose of a publicly owned golf course is to provide quality golf at a seasonally
competitive, yet reasonable rate for residents, especially during the peak season
o The costs: capital development costs ($2-$3 million), land purchase (TBD) and
ongoing operating costs ($0 -$300k+)
o Alternatives that achieve the same goal: discount coupons or similar county-
provided discounts at existing privately-owned courses.
o Result: enhances economy viability of existing courses for lower
investment.
o Challenge: golf demand currently so high that discounted rounds may not
solve the problem
Headlines
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o National golf participation is steadily decreasing –has experienced 24% decline
between 2006 and 2015
o Target demographic for recreational golf are members of Baby Boomer Generation
and Generation X –households with annual incomes above $50,000
o High concentration of golf courses in Collier County -limited number of high quality,
affordable public access courses (semi-private resort courses)
o Higher likelihood of increased gross and net revenue with private, third party
management relative to public management due to incentive based structure
o Quality is important. Existing privately owned low quality courses charging less than
higher quality publicly owned course (in other counties –from survey)
What are national recreational golf standards and trends
and how do they relate to the long-term viability of a public
golf course?
5
6
24.5
22.7 23.3 22.3 21.9 20.9 21.1
18.9 18.4 18.618.6
17.6 18.1
16.9 16.5 15.9 15.1 13.5 14 13.9
5.9
5.1 5.2 5.4 5.4 5 6 5.4 4.4 4.7
0
5
10
15
20
25
30
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Participation (millions)National Golf Participation
Total Male FemaleSource: NSGA
•Golf participation declining –24% decline since 2006
•75% male –25% female participation
•Female participation relatively consistent –gaining share
National Golfing Trends -Participation
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43.9%
39.1%
17.0%
Frequency of Participation
Infrequent (2x-9x)
Occasional (10x-39x)
Frequent (40x+)Source: NSGA
National Golfing Trends -Frequency
•Small market share frequently participating –approx. 3.1 million participants
•44% infrequently playing –approx. 8.1 million participants
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National Golfing Trends –Demographics •Primarily played by Baby
Boomer Generation and
Generation X –approx. 10
million participants (53%)
–34% of Collier County’s
population is between ages of 35
and 64
•Approx. 15 million participants
from households with incomes
greater than $50,000 (80%)
–57% of Collier County’s
households earn more than
$50K annually
•Strong market demographics
to support recreational golf in
Collier County
–196,700 people fit demographic
in Collier County (some overlap)
1.7
1.2
2.6
3.1
3.3 3.2 3.0
0.4
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
7 -17 18 -24 25 -34 35 -44 45 -54 55 -64 65 -74 75+Participation (millions)Axis Title
Golf Participation by Age (millions)
Source: NSGA
0.4 0.7 0.9
1.4
3.5
3.0
4.4 4.3
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
<$15,000 $15K -$24K $25K -$34K $35K -$49K $50K -$74K $75K -$99K $100K -$149K >$150KParticipation (millions)Axis Title
Golf Participation by Income (millions)
Source: NSGA
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National Golfing Trends -Frequency
•Florida grouped in South Atlantic Region –largest share (18%)
•South Atlantic Region -DE, FL, GA, MD, NC, SC, VA, WV, DC
0.8
1.0
1.6
1.6
1.9
2.5
2.6
3.1
3.4
0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5
East South Central
New England
West North Central
West South Central
Mountain
Mid Atlantic
Pacific
East North Central
South Atlantic
Participation (millions)
Golf Participation by Region
Source: NSGA
What are demographic trends in Collier County? How do they
impact recreational golf?
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•57% of households in Collier County earn more than $50,000 (53% nationally)
•34% of population is between ages of 35 and 64 (39.7% nationally)
Collier County -Demographics
Population and Growth Rates
Population Percent Change
1990 2000 2010 2015 Estimate 2000-2015
United States 248,709,873 281,421,906 308,745,538 321,418,820 14.2%
Florida 12,937,926 15,982,378 18,801,310 20,271,272 26.8%
Collier County 152,099 251,377 321,520 357,305 42.1%
Source: U.S. Census Bureau, Hunden Strategic Partners
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•Collier County features more households with incomes >$50K
•Highest percentage among comparable counties in SW Florida
•Collier County features lower ratio of citizens ages 35 to 64
•Lowest percentage among comparable counties in SW Florida –does not
account for seasonal visitors
Southwest Florida -Demographics
Southwest Florida Demographic Analysis
2015
Population
Estimate
Population
between 35-64
years old
Percentage Total
Households
Households with
income > $50K Percentage
Manatee County 363,369 165,927 46%143,725 66,966 47%
Polk County 650,092 232,196 36%221,381 96,928 44%
Pinellas County 949,827 494,247 52%402,653 186,779 46%
Lee County 701,982 248,573 35%252,287 122,753 49%
Average 666,318 285,236 42%255,012 118,357 46%
Collier County 357,305 122,462 34%129,888 74,296 57%
Source: American Community Survey, US Census Bureau
What is the present condition of golf facilities and infrastructure
throughout Collier County?
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Collier County –Public
Golf Courses
•75 total courses
•14 public access
courses
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•Public access resort courses drive average rates up in Collier County
•Inclusion of cart fee into rate also drives averages up
•Limited supply of high quality –public access courses in Collier County
•Average membership fee higher in Collier County vs. surveyed courses
•Cost per round averages $25 lower during low season and $56 lower
during high season on publicly-owned courses vs. privately owned
Survey Courses vs. Collier County Public Courses
Surveyed vs. Local Public Access Golf Courses - Rate Structure
Publicly Owned-Surveyed Golf Courses Privately Owned-Local Public Access Golf Courses Difference (Public less Private)
Membership Low Rate High Rate Membership Low Rate*High Rate*Membership Low Rate High Rate
Average $1,330 $22 $71 $4,681 $47 $126 ($3,351)($25)($56)
Low $720 $15 $24 $1,500 $25 $52 ($780)($10)($28)
High $2,199 $32 $225 $11,140 $90 $265 ($8,941)($58)($40)
Source: Collier County Municipal Golf Survey
*Cart Fee Included in ALL rates
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Collier County Public Course –Feedback/Insight
o Moderate decrease in local play –seasonal play has increased
o Residents that are not members at private courses are seeking high quality, public
access courses
o Perceived opportunity for high quality public golf course development south of Naples
o Limited tee-time availability –especially in-season
o Annual number of golf rounds range between 30,000 to 40,000 per 18 holes
o Summer rates are more attractive to locals -local play in summer, seasonal play in peak
season (December –March)
What are the pros and cons of private versus public golf course
management?
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1.Public Management
–County maintains operational responsibilities
–County assumes liability of golf course operations
–Suggest experienced golf course manger or pro to optimize course performance
–May be more desire to maintain course quality and less emphasis on maximizing utilization
–Less likely to have incentives to maximize revenues and minimize expenses
–County may have less ability to change personnel due to business performance
–May be more in tune with county’s mission to offer low cost play than private management
2.Private Management
–Incentive to maximize utilization
–Incentive to minimize expenses
–Incentive to maximize customer service for repeat business which maximizes use
–Incentive to cross-sell other products and services like carts, food and beverage, etc.
–Bring experience from other golf courses
–County can ask management company to change manager if unhappy
Management Options for Collier County
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Survey Results –Revenues / Expenses per 9 Holes
-Majority lose money
-Majority managed by the public sector
-Public golf courses are an amenity for local
residents –quality of life
$1.1
$0.5 $0.5
$1.0
$0.7
$0.5
$0.8
$1.2
$0.5
$0.8 $0.9
$1.2
$0.5
$0.9
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
$1.6
$1.8
City of
Cape Coral
City of
Largo
City of
Lakeland
City of
Orlando
City of
Pompano
Beach
City of Sarasota Miami Dade
CountyMillionsSurveyed Municipal Golf Courses -2016 Revenues & Expenses per 9 Holes
Series1 Series2RevenueExpenseSource:Collier County Municipal Golf Survey
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Projection of Golf Demand: Low, Base, High
•Rounds per capita decreasing
•Number of rounds played
increasing in base and optimistic
case
•Depends on population growth
and rate of decrease in
participation
Projection of Golf Demand in Collier County - Pessimistic Case
Year
County
Population Change
Cumulative
Change
Golf Rounds
Played
Change from
Prior Period
Cumulative
Change
Rounds per
Capita
2015 357,000 ----3,375,000 ----9.5
2020 383,200 7%7%3,260,420 -3%-3%8.5
2025 415,000 8%16%3,177,889 -3%-6%7.7
2030 430,000 4%20%2,963,477 -7%-12%6.9
2035 445,000 3%25%2,760,169 -7%-18%6.2
2040 460,000 3%29%2,567,887 -7%-24%5.6
Projection of Golf Demand in Collier County - Base Case
County
Population Change
Cumulative
Change
Golf Rounds
Played
Change from
Prior Period
Cumulative
Change
Rounds per
Capita
2015 357,000 ----3,375,000 ----9.5
2020 383,200 7%7%3,441,555 2%2%9.0
2025 417,200 9%17%3,559,566 3%5%8.5
2030 447,000 7%25%3,623,130 2%7%8.1
2035 472,700 6%32%3,639,868 0%8%7.7
2040 497,700 5%39%3,640,753 0%8%7.3
Projection of Golf Demand in Collier County - Optimistic Case
County
Population Change
Cumulative
Change
Golf Rounds
Played
Change from
Prior Period
Cumulative
Change
Rounds per
Capita
2015 357,000 ----3,375,000 ----9.5
2020 421,500 18%18%3,865,226 15%15%9.2
2025 475,600 13%33%4,230,492 9%25%8.9
2030 527,500 11%48%4,551,381 8%35%8.6
2035 576,700 9%62%4,826,613 6%43%8.4
2040 627,100 9%76%5,090,976 5%51%8.1
Source: HSP, Bureau of Economic & Business Research, Florida Population Studies
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Conclusions
o One-time and Ongoing Financial Commitment
o 140-180 acre site on average; land prices generally increasing as population increases
o Average development costs run between $2 and $3 million + land acquisition cost
o Capital expenditures (on top of operating loss) $75k -$150k/year
o Annual net operating loss more likely than profit; up to -$400,000.
o Provides affordable play for a portion of county residents
o Number of beneficiaries relatively small compared to overall population
o Little additional economic, fiscal or employment benefit to consider in the ROI calculation
o Discounts or coupons at existing courses would provide similar benefit but not likely in
high season. Much more targeted and less expensive solution. Also benefits local
privately-owned courses, especially during off-season.
o Difference between this investment and sports complex is lack of impact
Questions?
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