Guest View-Tony D'Angelo: Facts About Golf

Guest view: Facts about golf
I appreciate your post today regarding “pay to play.” There is no problem with a town subsidizing recreational amenities for its residents and to encourage economic activity from them. What we need to get past is this obsession with golf being some sort of bad thing for a community that enjoys the sport.

Resident survey shows interest
The statistically valid survey in 2020 documented that 20% of the residents value golf. That is significant when you compare it to the published national benchmark of 12%.

Early challenges noted
There is no question there were extraordinary costs in the early years after the purchase. The Town had no expertise in managing golf, we were in a recession, and the property had been neglected for years before the sale.

Rounds and revenue under Indigo
During the five plus years under Indigo Golf management, almost 583,000 rounds were played. When including revenues from the Overlook, the average round sold for $52.17. That is consistent with a municipal course.

Operating performance improved
After all operating expenses, the gross profit is $2.79 per round. Indigo’s first year showed a loss of $4.44 per round. Through February of this year, operations are generating $7.24 of gross profit per round. This reflects improved operating efficiency.

Capital investment explained
More than 80% of the capital spent was for the new irrigation systems on the 36 holes. Actual golf-related capital since the acquisition has been just over $11 million, not $25–30 million as has been suggested. The new system replaced a 40-year-old system and is expected to last decades while improving water use efficiency.

Capital treatment matters
Capital should be viewed as an investment and not as an operating expense. If capital is amortized over 30 years using a depreciation model, golf would be in the black by over $1.8 million during the Indigo period. The average allocation of a green fee to cover capital would be about $2.23, or roughly 4%.

Overall conclusion
This is a good example of how the Town confronted a challenge and is now managing it more effectively. Like any recreational business, there will be up and down cycles. The question is whether other pay-for-play amenities should be managed and marketed in ways that produce similar results.
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Tony D'Angelo is a long-time Oro Valley resident and President of the Friends of Pusch Ridge Golf. He is Chairman of the town's Tourism Advisory Commission. The content is an email sent to us. We have published it with his permission.