HomeMy WebLinkAboutRes 322 DWGC Green Fees ' Resolution No. 322
PALM DESERT REDEVELOPMENT AGENCY
INTEROFFICE MEMORANDUM
DATE: DECEMBER 12, 1996
TO: EXECUTIVE DIRECTOR, HONORABLE CHAIRMAN AND MEMBERS
OF REDEVELOPMENT AGENCY BOARD
FROM: DAVE YRIGOYEN, REDEVELOPMENT MANAGER
SUBJECT: DESERT WILLOW GOLF RESORT GREEN FEES
Recommendation:
That the Agency Board approve Resolution No. 322 , A Resolution of the Palm Desert
Redevelopment Agency Establishing and Setting the Green Fees for the Desert Willow
Golf Resort.
Background:
In the Agency's agreement with Kemper Sports Management (KSM), it was agreed that
the Agency would establish the yearly green fees for the Desert Willow Golf Resort
play. In their preparation for opening, the Desert Willow staff has started to receive
bookings for tee times and, therefore, require the setting of green fees in order to begin
to quote them.
KSM, in conjunction with staff, has accomplished an analysis of green fee rates and his
developed the attached schedule for the Agency's consideration. Several issues
needed to be addressed and balanced in reviewing the rate schedule. They were:
1. Maintenance requirements
2. Profitability
3. Type of course
4. Palm Desert resident discount
5. KSM's loss guarantee
6. KSM's percentage earnings fee
7. Market rates
Essentially, we needed to be certain, that as a benchmark, maintenance levels were
provided for in revenues.
•
The profitability of the course was viewed in conjunction with the type of facility
developed. The Course has been viewed as one which rivals any major course in the
area, and in fact, is the only one of its kind in the Coachella Valley. Therefore, the
potential for a basic profit margin should be expected.
The resident's discount rate is basically a 20% across the board discount, which
provides for reasonable rates at various times throughout the year. The Desert Willow
Committee's recommendation was that a consistent percentage discount be applied
throughout the year, this reflects that position.
KSM's concern with regard to the rate schedule was that a monthly loss would impact
their loss guarantee unreasonably. Essentially, KSM must make up any monthly loss to
the Golf Course, a prohibitive rate schedule could accomplish this. Additionally, their
rate cap for one course is $3,000,000 gross revenues. In order for them to receive their
5% allowance above the set fee, they need to exceed this cap. A lower fee would
impact that ability.
Finally, a review of current market rates for similar courses identified substantially
higher green fees. These courses are established courses which provide a greater
edge in the market. We wanted our Course to have the ability to attract a share of the
market with reasonable rates.
The structure of the resolution provides that the Agency can review rates and adjust
them from time to time as the market demands. At this point in time, staff would
recommend that the attached rate schedule be adopted.
REVIEWED AND CONCUR:
-Dave Yri s oyen
Redev- opment Manager Executive Director
mh
Attachments (as noted)
AY RDA AS SUBMITTED WITH: 1) 25% DISCOUNT ACROSS THE BOARD FOR PALM
Onl 0,z. DESERT RESIDENTS: 2) ELIMINATION OF 7-DAY SURCHARGE FOR PALM DESERT
RESIDENTS: 3) AGENCY BOARD TO REVIEW THE FEES WITHIN THE NEXT SIX
VERIFIED BY47,f MONTHS
Original on file with City Clerk's Only,
2
EXHIBIT A . ,
Desert Willow North Golf Course
Posted green fees rates with cart starting February 1, 1997
7 Day Advance Palm Desert
• January 1 - flpril 30 Posted Rate Surcharge Resident Rate
Friday- Sunday(Holidays) $110 $10 $88
Monday- Thursday $100 $10 $80
Twilight(after 12:30 pm) $60 $5 $48
9 Hole (after 2:00) $35 $5 $35
• May 1 - May 31
Friday -Sunday (Holidays) $80 $10 $64
Monday-Thursday $70 $10 $56
Twilight (after 3:00 pm) $40 $5 $32
• June 1 - September 30
Friday-Sunday (Holidays) $50 $10 $40
Monday - Thursday $45 $10 $36
Twilight (after 3:00 pm) $30 $5 $24
• October 1 - December 31
Friday- Sunday(Holidays) $90 $10 $72
Monday-Thursday $75 $10 $60
Twilight (after 1:00 pm) $40 $,5 $32
Note: 7 day advance surcharge applies to all players