Source: The Capital (Annapolis, Md.)
Snow-filled fairway bunkers couldn't keep Joe Smith off the links at Compass Pointe Golf Course.
The Pasadena bay pilot played Tuesday and Wednesday and sounded a note of optimism when asked between shots about the county's decision last week to buy the course.
"It'll make money; it'll just take time to get started," Mr. Smith said.
According to county predictions, there are a lot of Mr. Smiths out there who will play frequently and make the course profitable.
But some experts say the county is taking over the Pasadena course at a time the golf business faces an uncertain future.
Acting on legislation backed by County Executive Janet S. Owens, the County Council approved Monday borrowing up to $26 million to take over Compass Pointe, which the Maryland Economic Development Corp. was to build and operate on land it leased from the county.
MEDCO ran into financial trouble on the still-unfinished 36-hole course, prompting the county to act.
Budget Officer John Hammond said Thursday that the county hopes to complete construction of the last nine holes, paved cart trails and stormwater management system before July.
MEDCO, a quasi-private state agency, was building the course on county-owned land, and was to have operated it under a lease. It hired Billy Casper Golf to manage the course. The county hopes to retain Billy Casper Golf, but the golf course management company could not be reached for comment.
Ms. Owens did not respond to a request for an interview to discuss the course, but her spokesman, Jody Couser said: "It is anticipated that Billy Casper will manage the course and that oversight will come from within the current complement of County employees."
About $23 million of the money the county will borrow to take over the course will be held in escrow to cover the bonds and interest that MEDCO issued, Mr. Hammond said.
About $1.5 million will be needed to complete the construction.
Mr. Hammond said the debt will be structured to give the course time to get up to its full potential before the full amount of yearly debt, about $1.9 million, becomes due.
"It adds a little bit to the interest cost in the long run, but it lets us match the debt service to the projected cash flows," he said. "By the end of the fourth year, the golf course will be stabilized - that's the 81,000 rounds (of golf) we are talking about."
If it doesn't break even, though, the county will have to make up the difference.
"It is anticipated that the course will be self supporting," Ms. Couser said. "In the event that in a year it is not, then general funds would be required to cover the shortfall."
Will it pay?
The big question on everyone's mind is whether the course will pay for itself, since any shortages will have to come from the county's operating budget.
"We are going to have to be prepared to raise taxes or take it out of other projects," County Councilman Barbara D. Samorajczyk, D-Annapolis Roads, said.
Ms. Samorajczyk has been a vocal critic of the county's takeover and abstained from Monday's vote.
Professional golfer Gary Honeysett of Annapolis, who is president of the Middle Atlantic Pro Golf Salesmen's Association and works in Maryland, Virginia, West Virginia and Delaware, called the takeover a "boondoggle," and predicted financial trouble ahead.
The number of golfers is declining, he said.
"The only thing that is saving the golf industry from making a wholesale plummet is that the housing industry is still very strong," he said. "Look at all the courses across the country that are tied in with housing. If housing (boom) has a 'hiccup,' and it will, you're going to see a foreclosure and sale of courses like never before."
The official in charge of Baltimore County's public golf courses doesn't predict as dire a future, but he said caution should be the watchword.
Baltimore County owns six golf courses and leases them to an independent entity, the Baltimore County Revenue Authority, which operates facilities like the county's parking lots.
BCRA Executive Director George Hale said his courses gross between $8 million and $9 million a year; profits run from $1.3 million in a good year, to a $650,000 loss in others.
"The last two years, the golf system has operated at a loss," he said.
Unlike the Compass Pointe takeover, the Revenue Authority, not Baltimore County, is responsible for any losses the courses suffer, Mr. Hale said.
Each of the newly-built courses does between 32,000 and 37,000 rounds of golf a year, Mr. Hale said, and they are being subsidized by the more established courses that are turning profits.
"Neither of those courses is profiting yet," Mr. Hale said of the new ones. "They make enough money to pay operating costs and half of the debt service."
Mr. Hale said that rainy weather for the past two years has hurt the golf industry, but a longer-term problem is that the World War II generation of golfers is fading away.
"When you lose a senior golfer, you lose about 37 rounds of golf a year," Mr. Hale said. "The average (younger) golfer plays 20 rounds. We need two new converts to replace them. This is where we are right now."
The industry will pick up in a few years, Mr. Hale predicted, as baby boomers make the switch from more strenuous sports to golfing.
One county resident who was playing golf at Compass Pointe on Wednesday afternoon said "so what" to the possibility that the course may not break even.
"They put in all these (parks) for kids, why not put in a place for us adults to have some fun. It's a recreation facility for the county's citizens," said the retired county employee who asked not to be named.
While questions about finances linger, golfers at Compass Pointe this week praised the course's design and said they liked the way it is run.
They all agreed that the county should retain Billy Casper Golf, which currently manages the course and clubhouse on a contract basis with MEDCO.
Golfer Al Jacukiewicz of Grasonville, who was there with a golfing party from Severna Park and Annapolis, said he thought that Billy Casper does an excellent job running the course.
"Eisenhower (Course) improved when they took it over," he said.
Recreation and Parks Director Dennis Callahan said his office would oversee the course, but would not hire additional people for the endeavor.
"Our management strategy is to have a management company, and we have one in place, and it has done an excellent job," Mr. Callahan said.
Mr. Callahan said he was waiting for a legal opinion from the county's office of law on whether the contract between MEDCO and Billy Casper would be transferred to the county, or if regulations required putting the management contract up for a new bid.