Duluth golf courses will retain management for now | Duluth News Tribune | Duluth, Minnesota

Published November 01, 2013, 12:00 AM

Duluth golf courses will retain management for now

Duluth’s two municipal golf courses will continue to operate under local management through 2014.

By: Peter Passi, Duluth News Tribune

Duluth’s two municipal golf courses will continue to operate under local management through 2014.

Professional Golf Management Inc. of Duluth recently received a contract extension, ensuring the same management team will remain on the job at the Enger and Lester Park golf courses for at least another year.

PGM’s contract was slated to expire at the end of this year, but with a strategic plan for the courses still in the works, the city has chosen to postpone plans to issue a request for proposals to manage the two courses.

“We decided we just had too much going on at once,” said David Montgomery, Duluth’s chief administrative officer.

“If we extend the contract, it gives us time to finish our strategic plan and then go out for proposals more around mid-summer.”

The city last formally entertained offers to oversee its golf operations in 2007.

“We think we have an obligation to taxpayers and ourselves to put this out for bid every once in a while,” said Montgomery, explaining that the city should periodically test the market and assess whether it’s getting the best possible return on its investment in the golf courses.

Paul Schintz, PGM’s director of golf, welcomed the one-year contract extension, saying it should provide the city with a better opportunity to carefully explore its options. He said any change in management at this late of a date would have been a challenge because PGM already has been in conversations with its insurer and vendors to arrange for next year’s operations.

“People were getting worried, but the waters have calmed now that we have an extension,” Schintz said.

Montgomery said he fully expects PGM will be among the firms that respond to the city’s next request for proposals to manage the golf courses in 2015.

“Just because we put out an RFP doesn’t mean the incumbent manager wouldn’t win the contract again,” he said. “There are a lot of advantages to going with someone who is familiar with the courses and the history of these operations.”

Schintz agreed, saying: “Over time, you really get to know the facilities, your customers and the market area.”

Greg Swor, an avid golfer from Duluth, said he hopes the city sticks with a tried and true local management team.

“These people already know where the problem spots are every year. And I’m for local money staying in our local economy,” he said.

Montgomery said Duluth’s municipal golf courses usually have operated at a loss in recent years. He said that in the last 10-15 years the golf operations have run up about a $1 million deficit, when operational and capital expenses are factored into the picture.

Schintz said the golf industry as a whole has experienced a decline, in part because of overbuilding and a decline in the number of active golfers.

The number of golfers in the nation had fallen from a high of nearly 30 million in 2002 to a little more than 24 million by the end of 2012, according to Pellucid Corp., an industry-tracking firm. That means about 20 percent fewer people are golfing today than were on the links a decade ago.

“Golf is not on an upswing any more,” Montgomery said. “We still have a very avid following at our municipal golf courses, but we have to figure out a way to keep them operational.”

This year was particularly challenging, because of late spring snows that delayed the start of Duluth’s golf season.

But Montgomery said the city can scarcely afford to subsidize golf on an ongoing basis.

“We feel these golf courses must pay for themselves, both operationally and in terms of debt service,” he said.

“You have to ask, ‘Is that where the city should put its limited resources?’ ” Montgomery said. “If it’s a minor expense, that’s one thing. But if it’s a major expense, it means trading off in other areas.”

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