HomeMy WebLinkAboutKemper Sports Resident Program Meetings Desert Willow March 22 2023jo
Desert
Will
Golf Resort
Desert Willow Golf Resort
Final Version
March 2023
KmperSpom Uniquely dedicated. Dis#inctly different, Cusrom Properry Managomcnt
Meeting Purpose:
The current golf market has experienced a dramatic
increase in interest leading to heavy demand on Desert
Willow's tee sheet and making tee tires difficult to come
by. Therefore, today we'd like to:
1. Obtain input from interested course customers
on potential program changes
. Receive eiv input and feedback on alternative fee
proposals for the President's Committe and
City Council to consider
Ketnper�4)orts Uniquely dedicated. Distinctly different, Custom Proparty Managointnt
Key Tenet Considerations
The below tenets/gaols should be tap of mind as Resident Program options
are being discussed and explored:
Prior City Council comments and parameters should be considered
• DWGR is are economic development philosopher, also intended to provide residents
with a country club experience for a day
• The Quality of the Facilities, Courses and Customer Experience must remain "Bost in
Glass'.
Proposed programs should allow for financial success during "Buil" and "Bear„
economic market conditions.
• Minimize the need for subsidization from City Funds for Operations.
* Desert Willow's programs should allow for local Country Clubs and Restaurants to
succeed and not detract from their viability as a Palm Desert business,
• Ability to continue utilizing Dynamic field Based pricing madels to drive green fee
revenue for the financial stability of the property.
*•; K&1 Ylerspom Uniquely dedicated. Dis#inctly different. Cusrorn Properry Managomcnt
Council Policy Directive
From Kern per's Current Agreement(2022)
• IV.2 I:IslemoMation of Capital impravernont projects_ Tttie pa
onntral an disoration of tha City_ and all oasts and ".A. �
responsibilities or obli ations on the part of. Kemper with respect 6a a ny
in the event the City desires Kempar to bog involved in any capaci in a
foeM the tiDrrns end cm(jitions of Such involveman#, inrIuV&9 wi#h ut Iin
ruled a and arg ree that all Ca p itaI Irni rovement orojects are in the sole
r rovemen L ro er s s ria 11 t3e pai Trorn U i ly TLLn s. I he Ooslir, on! nsei
nt imposes no
of a Capital Impravemeni proJJeet, includin design, construction, or supervision.
Improvement protaci, the parries shall an er into a sepa rate 29reernent setting
fees to received 1�y Kempor for such invi)IvE)men#.
From the 2012 SR Agreement wnComper
+ The new agwrnem establishes a capital reserve account to be used for capital pipjacts for the GoYf Resort. The capital reserve account will be replenished with
net Inoome from annual operations and resales or refuws from acquisitlon of-equipmeril, goat cans and the like.
• Kemper guarantees_ to fund all deficils by agreeing.to maintain a dash re-jerve of $500,000 at. the end of each month they operate. and manage Oe5erl Willow
Thhi i$ the wording in the current agreernerd;
• KEwnpsr shall ue its commercially rea5�onshle efforts t-a maintain at eIl times, sufficient funds in [he perating A=Unt(8s ID atisfy the daily working capital needs ortfse
off Res
sorl includn the lime) payment of Golf e=rl Expenses. Kemper shall irnmadiately nari the City Fbs2f1 w verthe balance of all funds in the
paral rig .dccaarnl�s is reasonably tiripalsd to fall, or actually does fall. below DO DOD. Opnn uch nolr"oa miler and CIS Cilyr hall meal and canter in pond faith
to oa er W mi[iq t$ ne9 rue as Flow the Golf f $gpr[. If th alanre of II' Eun in #1, Qper fi oCourrt[s) fah b y �0,000, K m r and t e Citywill
FM arbd o MW in gaud �aith to caordlna4& a faring budget to ensure that valid, o �e off Ftesart �xps�n�es are payed � a IlM 3e rnartir7er. �fo Che $xtertiC ihathe
GrkTFResmt has annual capital Bndilures under e� kl fi 4_2 la ba paid from Lisp Ga Rssorl Ac€aunts, tha maximum amount to bra disbursed iram the Gdf Resort
Accounts shall riot exceed $100 annually wilho written approvalof the City s Reprewritelive. T h4 City shall #rave the right to withdraw and retain any amounts in
excess of ule wriounis required Or maintain the Coll Rena nts_ -For purposes or darRy, Karrppor 9hall have no r Sibllity 14 prcvido any of its evm rurpda tp
the Operating Ac urdu v6der the Section 7.
From the 2016 S#f for hlgrnt ContraCt=
• 5ince ince #ion the *lf resort has utilized its awn -cash flows to sustain the annual era#ians which encom asses a in fir all of its costs
Uniquely dedicated. Distinctly different, Cusrorn Properry Marragemitnx
Year Financial Snar)shot
6e*rainy cash Balance 31321717 31"4 022 23T4 ? 31SiT, 616P 4 $24 6P9
Green Fits & Cart Fee-%
7,G84,240
5,582,594
7,481, 139
9,064,713
9,565.069
Nle rch a nd ise
809,498
713.947
785t 205
1 ,060, 234
1,079.625
Other Pro S hop
501 ,344
517.703
491,579
482, UO3
455.829
R a nge
43,827
35.476
67.454
77.941
74.616
Food& Beverage
2A69,768
2,216.719
2,181,902
3,975,953
4,492.967
Academy Merchandise
92.285
76.911
7721i3
64.932
58.762
Other Academy
216,465
173.351
2fk�967
323,C 3
338,125
Other G&A I ncame
24,542
28.722
14,504
37,621
40.205
7iansferin from aF-
TOTAL REVENUE
1.1.fi37,965
9_345,423
14368,013
15,082,421
16,IM12 0
E"EA4917V) Ei;
Cost oFGoo dSDI a
1,355,396
1,121.263
1.20Q530
1,719,241
1,948.800
Payroll
5,264,339
5,171.186
5,41Q712
6,661,711
7,544..605
0perat ingExpar:e.
3,086,672
2.954.736
2,918,415
3,624,904
4,083.774
E q u i p me nt/Lea r. e r.
638,885
454,3134
4691030
988, 548
720.000
Other Expense
609,758
513.87.5
557,776
518,614
495.396
Zam Awpai'n enffrom e1fy1-V1msW,bff
-iwv o +D
CapitalfirrprMMMent PA7n
FirccliffGolfCourse Renovation
-
-
-
-
9,SOD,000
Annual DWG RC2pitaI Replacement Expenditures
-558,475
271.10D
459,151
414,945
4-9D.000
Annual Perimeter& DWdrive Expenditures
142.881
182.157
187,417
1490,454
40d.000
Total CIP
801,357
453,257
6"—%8
604,801
4,340,000
TOTAL EXPENDITURES
11,754,407
10,664,704
14203A 31
14,617,418
1{J,582, 577
00
Trarrsfari"from CaprtalRasarwa
1557,435
367,697
577065
464,767
7W,OCO
Accruo! to Cos}r 6osA Ad'ustr ant
OPERATIONS
(272, 745)
269,83u
7L10,421
164,842
Endi ng OW Cash E1alance/Reserve
3,5WWI 022
43743"
3, ASl
-g811.62Y
4034s3az
Restric6edfor0utstandinSOperatinnaILc) an
2,00G,GM
2,00G0000
zoga w
1,500,OW
1,Om,000
90DayOperations Reserve
t
2,73.9,262
2,552,8152
Z639,SS6
3,378,154
3,696,144
�- Risk tip GeneraI Fund
!ll�r,li� SFr:
Upcoming Capital Considerations:
FY2 1 4 — Firecliff GreensfTeas Renovation
FY23/ 4 — Annual Facility & Equipment Replacement
FY23/24 - Annual Perimeter& DVV Drive Maintenance & Improvements
F 2 / 0 — Fountain View Course Renovation — Greens & Tees
F 0/ 0 — Mountain View Main Irrigation Line Replacement
FY31/3 — EFfluent/R cycl d Watier Bladder Replacement
*•; �I '1 1' Uniquely dedicated. Distinctly different, Cusrom Prop rry Managemcnt
3,500.000
S500,000
S300,000
S4,000,000
S1,00,000
S1,000,000
Resident Program — Opportunity cost Calculation
Koslaent KevenUO Analysis --In eason- t- riuv- uec-a .pan-zi "o-zi mar-z,$ Apr- may-
DurrentADR(Ave ira.ge DoIlarper Round}
Open-2,00pm (includes Resident Rounds) 128.34 123_99 121.47 120.51 149.37 128.82 102.42 88.97
Resident Rate 52_OG 52-00 $ 52M 52.00 52.00 52.00 52M 52.00
Opportunity Cost (Difference of Yield and Res Ra $ �4.34) $ 1.99) (H.4 7) $ (.51) $ (9T.37) $ (74.62) $ (50_42) $ (36.97)
Res identRounds Played 712 795 1,034 1,352 906 1,330 1,964 994
Ivenueat Risk (AD Rvs. Resident Rate
Total Revenue at Risk $ P2,928) $ (57_235) $ 1r886) $ (104,795) (88;217) $ (99;245) $ (99;g25) $ (38,748)
Total "In Season" Revenue Impact $pa,0 9}
Assumptions for Revenue at Risk Analysis:
-AD R pulled for time periods inhere utilization is over 95'A
- AD R i nc I ud es rou nds p layed at Res ident rate - effectively red uc ing AD R potential
- Revenue at Ris k e sti mates are used on Resident rounds recorded in PO
Nate: Average rates Will rise in the remaining 202 3 season months of March through May, thus so will the Revenue at Risk
*•; �Y 1 Uniquely dedicated. Distinctly different. Custom Proporry Managemcnt r
Resident
Program—
Alternative
Opportunity
Cost
Calculation
Resident Revenue Analysis "In S-eason" Qot 2022
Now 2C22 Dec 2022 Jan. 2023 Feb 2023 Mar 2022 Apr 2022 May 2022
Current ADR(Average Dollar per Round) - Sunrise & Prime
0pen-1225pm-3 day bookings onfy
132.550
134.79
142.14 S
138.47
147.52
132.04
117,31
103.91
Resident Raie
52.00
52.00
52.00
52.00
52.00
52.00 y
52.00
52.00
CppofknifgCost (Difference ofYield and Res Rate)
(80.50)
(a2.79)
W.14j
(86.47)
(95.52)
(aU.04) Ii
(6531)
(51.91)
Resident Rounds Played
597
604
745
962
403
932
1.511
874
Reve nue at Ri sk (ADR vs. %sident Rate)
Total Revenue at Risk - Pie-TwlW
(48,058.50)
{SD,OD5.1G) (67,15C3D)
(81184.14)
{38,49ALW
(74,597.28)
(98,683.d1)
{45,369.34)I
Current ADR (Average Dollar per Round) - Twilight lit Sunset
12:30pm- CID se-3 day bcoIcings only
S 7-3.19 S
7-3.26 S
67.{nB $
89.93 $
88.71 $
B9.53
7220
6922
Resident Raie
S 52.33 S
52:00 S
52.00 5
52.00
52.00 Ti
52.00 S
52.00
52.00
-0pportunity Cast (DifferernaeofY*AdarndRes Raie)
(24.19) $
(24.28) $
135.36) S
(37.93)
(36.71)
(37.53)
(2030)
(1722)
Resident Rmmds Played
226
2BB
299
523
353
397
452
121
Revenue at Risk(ADR vs. Resident Rate)
TotalFbvenueatRisk- TwilightBSurrset
(5,466.941 {7,235.441
[10,488.921 t
{19,837.391
{12,958.631
(14,1399.411
{9,175.601
(2,083.0
Total byMorth $ (53,525.441 $(57r240.60 (77,643.221 $(103.021.53) (51,453.191 ${69,496.691 $ (107,13 59.01 1 $(47.452.9£)
Total In. Season" R-evenu-e Impact
$ (567,692.641
Assumptio♦-rs for Revenue at Risk Analtysis:
- ADRpafled fortirne periods mteae rntunmbonisoverid5%
-ADR ordypulled from mu nds booked witffin3 days and in directmrnpetitian v`ith Res ideM.
- Revenue at Risk estnaiesare based an Resident rounds recorded in P05
We: Average flies M rise in the rem sk*V 2023 season n-� of March thro ug h May, thus so mill the Reve nue at Fisk
Kemj-,)erSpom Uniquely dedicated. Distinctly different, Cusrom Properry Marragemcnt
Champions Club— Opportunity Cost Calculation
venue
CurrentADR(Ave rage Dollar per Round)
7:30am-10:OOAM (Champions Bbck)
Resident Rate
Oct-22 Now-22 Dec-22 Jan23 Feb-2.3 Mar-23
$128.96 $ 128.72 125.72 $137.15 $ 154.26 $ 170.57 112.15 $ 94EO
$ 52.00 $ 52.00 52.00 $ 52.00 $ 52.00 $ 52.00 52.00 $ 52.00
pportunRy Cost (Difference of Yield and Res Rate) $ (76.96) $ {76.72) $ (73.72) $ (85.15) $ J102.26) $(118.57) $ (60.15) $ {4-2.60 )
Rounds Blacked
Rounds Imunthstatosquo (52) 208 208 208 208 208 20B 208 208
Rounds I morM proposed increase (72) 288 288 288 288 288 28.6 288 288
1,664 Rounds
2,304 Rounds
Membership
Revenue at Risk -Champions Club Blocks Rene nue
Revenue at Risk with 52 Player Bbck 16,007 $ 15,956 515,333 $17,712 $ 21,270 $ 24,663 5 12.5 11 5 6,6�1 5 (14,940) $ 117,374
Reverio-at Riskwith72Player Block $22,163 522;395 521,231 $24,524 S 2%451 S 34,148 517,323 512,56 5 (1%KO) $ 163,285
IKeveaue at Kids moving tram b2 to Q players :5 6,1bb 5 4,13G 5 b,G'3f .5 ti,H11 5 G,1#i1 b 9,4b-b 5 4,b11 5 3,40G 5 f4.13-MI 3 4b,910 I
Mem13ersh.ip Reve we
Revenge Generated (60 Memberships) $ 14,940
Reverse -Generated (80 Memberships) $19,920
Assumptions forCham pionsClub Revenue -at RiskAnatysis:
-Annual Membership is1inn ited ID Valid Palm DesertResiderrtcafidlioders
- Annual Me robe rship costs $299 and includes a GHI M handicap ($249 net revenue )
- Historically,ChampbnsClub has bee ngraniBda 52 p"rdtackeve ryWed nesdayfrom OctDber- May(32 events)
- Events are not held when Holidays iniBrfere (Thanksgiving, Christmas, and New Yea(s Day)
(DK&mrSpo Uniquely dedicated. Distinctly different, Cusrorn Praperry Marragomtnt
Resident Program— Input and Feedback
Time to share ideas takC ng into consideration information provided and
the key tenets_
Questions and Thoughts'
Key Teri et
• Prior City Council comments and parameters should be considered
The Quality of the Facilities. Courses and Custorner Experience must remain ''Best in lass".
• Proposed programs should allow for financial succesti during "Bull" and "Beer" economic market
conditions.
• Minimize the need for subsidization from City Funds for Operations_
• Desert Willow's programs should allow for local Country Clubs to succeed and not detract from their
viability as a Pala Desert business.
• Ability to continue utilizing DynamiclYield Based pricing models to drive green fee revenue for the
financial stability of the property,
*•; K&nil- t Uniquely dedicated. Dis#inctly different. Cusrorn Properry Managointnt
174
Inter ponnt,l
55a.00
0 / 0 4 Estimated Revenue
PALM DESERT 711838,4 1
lrhC
L4xra cr Fcx2.-d Fermi is
stv �,tM
a"
TUT IBM Tani
$10,uu0,tlou
L
36 %
=ales Taxes
525,679,,160
UK
Froperrjf Tax
K299,679
Lips
StateVFranch IneA
K200,000
OtherlTrarsfc, Ir
%3,14.3,200
Kemj-,)erSWm Uniquely dedicated. Distinctly different, Custom Prop rry Managemorix