Town Square

Despite financial risks, golf course revamp moves ahead

Original post made on Feb 4, 2014

When Palo Alto officials first proposed in 2011 a dramatic reconfiguration of the city's golf course in the Baylands, the main goal was to accommodate flood victims, not golfers looking for a richer experience on the links. Since then, the project has taken on a life of its own.

Read the full story here Web Link posted Tuesday, February 4, 2014, 1:32 PM


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Posted by Wondering?
a resident of Another Palo Alto neighborhood
on Feb 4, 2014 at 2:10 pm

With so few Palo Altans using the golf course .. got to wonder why there is such a push to spend all this money for non-residents use?

It's a shame that decisions aren't made with clear financial analysis on the table in this town.

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Posted by Mill Burray
a resident of Community Center
on Feb 4, 2014 at 2:43 pm

This article is funnier than "Caddyshack". Glad I don't pay taxes in Palo Alto.

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Posted by anonymous
a resident of Another Palo Alto neighborhood
on Feb 4, 2014 at 4:25 pm

While I'm the first to be concerned about our Council's priorities, a municipal golf course can actually bring in revenue if it's done right.

But I'm very concerned about this work proceeding now, while we head into this possibly historic drought. The Salt Marsh Harvest Mouse is endangered, and the work on the golf course will remove hundreds of trees. Maybe an interim plan is better, with a longer term plan for after we don't face this kind of water shortage and after we've taken care of more important priorities like the safety building.

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Posted by Ken
a resident of Leland Manor/Garland Drive
on Feb 4, 2014 at 4:56 pm

There was NO need to reconfigure the golf course, just re-done not too many years ago, risking great expense, a shaky future, conflicts with other agencies - the list is long. The golfers didn't want it, the golf staff really didn't want it, the seniors - men and women didn't want it, the women golfers didn't want it. WHO DID? It was the bleeding heart vociferous "soccer moms" who wanted to pare down the golf course for the chillllllldren!! Well, soccer isn't played all year around here - but golf is. More land was needed for mommy parking. The soccer moms pulled this scene a few years ago and persuaded the city to strike a deal with Stanford to snap up that prime real estate at the corner of Page Mill and El Camino polluted by thousands of car exhaust everyday . The soccer moms got the playing fields, and in due time Stanford will get it all back (they own the dirt) while Stanford got a huge amount of building rights in the Stanford Industrial Park area. Ever see who is really playing there? They are from all over - adult leagues. THAT prime area is where Palo Alto should have had a theater, a revenue-making convention center, a place such as Mt. View created. But NO. The soccer moms with youngsters in tow ruled that city council meeting in a an emotional scene led by our then mayor - for the CHILLLLLDREN. The scene last night was disgraceful. All the financial booby traps were pointed out, but our Council did it again. And if the golf course 'doesn't make it', just remember the name of every council member who folded for this idea. And remember this when you, the taxpayer, has to pay for this fiasco. Our own ENRON!!

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Posted by Sheeeeeesh
a resident of Old Palo Alto
on Feb 4, 2014 at 5:37 pm

What a flock of turkey's we have for City Council, ARB, and Planning Commission

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Posted by Midtown
a resident of Midtown
on Feb 4, 2014 at 9:07 pm

Make no mistake, this project is already a lose-lose-lose-lose project.
First, we are losing use of golf course and revenue due to the dirt piled on
the course. Second, we are going to lose the course for years while they push dirt around or wait for permits. Third, we will all lose when the golfers all go away when the greens fees get jacked up in an attempt to pay for this. Fourth, the 500 trees lose which will have to be replaced to the tune of hundreds of thousands of dollars.

Already the numbers don’t add up. “The City Council unanimously agreed Monday, July 23, 2012 to approve a $7.5 million redesign of the Palo Alto
Municipal Golf Course, a project that will move at least 15 of the course's 18 holes, create a new levee to contain flood water from the fickle creek and make 10.5 acres available for three athletic playing fields.” The creek authority would pay $3.2M and Palo Alto $4.3M or $7.5M total. Now the number has magically ballooned to $9.5 M. The project is not even bid yet and the price is skyrocketing.

In 1998-99 the golf course was renovated to the tune of $6M. The city
borrowed money by selling bonds based on the full faith and credit of The City of Palo Alto. The golfers are paying this back at the rate of $550,000 per year. There is about $3.0 million remaining to be paid which will be paid off by the year 2018. Who is going to pay that money with the golf course closed? Is that part of the cost estimate?

Why are we doing this? Those 3 playing fields are the reason. We could have had a rearranged golf course for essentially free with the creek authority paying (Option A), but no, the soccer moms demanded playing fields too (Option G), which the golfers get to maybe pay for. So has anyone run the numbers on this shell game using Poplar Creek as the model? (The PA greens fees can’t be any higher than Popular Creek or we will all go there to golf). Currently the PA golf course makes about $1M profit ($3M revenue and $2M expenses a year not counting bond payments). What will the bond payments be on some number probably far north of the currently estimated $6M. Do you trust numbers from a golf course design firm?

So folks, watch carefully as this thing spirals out of control just like
Mitchell Park. Soccer Moms rule!

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Posted by Deep Throat
a resident of another community
on Feb 5, 2014 at 11:02 am

The city is no longer pledging its full faith and credit for the current golf course loan. In July 2011, the city pledged all its fire department vehicles instead. ”For the 1998 COPs, the Golf Course was pledged. Because the Golf Course has value far in excess of the now remaining debt, staff does not recommend using it as collateral on this relatively small transaction. (COPs are a potential option to address the City’s infrastructure needs and the higher value assets could be used to securer higher borrowing levels.). Instead staff is recommending that the City’s fleet of fire apparatus be used as the leased asset. (A copy of the rolling stock subject to the lease is included in Attachment B). Twenty one (21) vehicles are being leased and their original cost value was $6.56 million. The oldest of these vehicles were purchased in 1991 and the newest was purchased in 2009. By using this asset, the City retains its real property assets for other COPs transactions down the line. The City has included language in the proposed agreement with JP Morgan Chase to substitute other rolling stock assets in the event that one or more of the pledged fire apparatus is eliminated. The City maintains complete control of the fire vehicles during the debt amortization period.”
See the list of fire department vehicles pledged to secure the current golf course loan repayments on the last page at Web Link

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Posted by Jim H.
a resident of Duveneck/St. Francis
on Feb 5, 2014 at 12:25 pm

@ Wondering - Where does it say in the article that few Palo Altans use the course? It also doesn't say how much the course makes/loses when running their "normal operations".

Hard to say that the course is a bad idea without any numbers. If "Midtown" is correct and the course makes $1M a year profit, then right there, it's a better deal than all of the parks in the city.

How much money do the city's other recreational facilities bring in?

With that logic, the city should also get rid of Foothills Park since not many Palo Altans use it. Also should close every park in the city since they don't bring in any revenues.

Bigger issue is that the city is entirely incapable of completing a large scale project. Just add it to the list. Currently we have MItchell Park Library and El Camino Park which are sitting there in limbo. This doesn't include the numerous items that go through the city, only to get held up by infinite studies the city pay for which then quietly go away but never get finalized.

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Posted by Robert
a resident of another community
on Feb 5, 2014 at 1:01 pm

No one cares if the golf course was "renovated" late last century. The existing Palo Alto Golf Course is a wreck - terrible conditions, terrible design, zero character. It's also a huge water waster - the new course design will conserve TONS more water, provide a more playable course, and actually draw in both serious and casual golfers to the course. As an avid golfer that plays 30-40 rounds a year, I might play the existing Palo Alto 1-2 of those times.

There's no point saying "what if" at this stage - the previous design has been trashed because of the creek expansion, and the existing par 67 isn't going to attract anything. They did that in anticipation of a redesign. Calling it off now would be a death knell to the course. This is a perfect example of "too many cooks" (read: agencies) meddling like condo HOA board members.

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Posted by Midtown
a resident of Midtown
on Feb 5, 2014 at 4:07 pm

I recommend anyone interested in the financial details of the golf course read: Web Link This was prepared by one of those high price consultants that our city loves so much. It is very complete and is fascinating reading. It was done in 2008 and projects out to 2015 and things have not changed much since then. The course is compared to the competition and it gives the breakdown of the users and finances. The course actually compares quite favorably to the competing courses (all of which have lost users over the last ten years). What is clear from this is that the City is sucking all sorts of money out of the course in the form of bloated utility costs and overhead charges (what a surprise). The course generates about $4 million from the greens fees, club house and concessions. All of that revenue is going to evaporate and very little of the real expenses will go away once the course closes. A two year closure is going to cost the city close to $8M in revenue before we even begin to build something new. I presume the city will continue to make the current loan payments or our fire trucks will go away. Those 3 soccer fields are going to end up costing us close to $20 million. That dirt that got dumped on the course is a little like HSR, just get the thing started, paid for or not, and there is no stopping. That win-win-win-win has the real potential of costing us the golf course. I propose we let the seniors all play soccer.

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Posted by taxee
a resident of another community
on Feb 5, 2014 at 8:30 pm

Here’s an exercise for someone with time on their hands. Go to the city budget at Web Link and figure out how many staffers – and their total compensation packages – are employed to take care of the golf course, childrens theater, zoo, art center.

Regarding 3 soccer fields, in a letter to Mayor Yeh back in September 2012, John Arrillaga offered to develop 3 new athletic fields for the city. That was right about the time of the 27 University proposal. I don't know if that offer is still on the table.

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Posted by Jeff
a resident of Duveneck/St. Francis
on Feb 6, 2014 at 10:31 am

A high speed rail to nowhere, a state of the art library no one can use, and now a golf course no one can play golf on. Just start the spending ... it will benefit someone.

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Posted by Glory Bea
a resident of Old Palo Alto
on Feb 9, 2014 at 7:03 pm

What a consummate waste of time, energy, resources, and MONEY! The City Council should be called on the carpet for this loser!

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Posted by Follow the money
a resident of Crescent Park
on Feb 10, 2014 at 12:14 am

Developers can use a fancy golf course and a big fancy library to inflate the value of their properties.
Nothing but the best for the little darlings.

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Posted by resident 1
a resident of Adobe-Meadow
on Feb 10, 2014 at 3:01 pm

As a parent my son in high school worked at the PA golf course. He was on the tennis team but played with the high school golf teams that practice there. A lot of our children are exposed to golf in classes and competitive teams so the golf course should be viewed as any other sport we support - like soccer and baseball. I have spent a lot of time at that course as do a lot of other people - just hitting a bucket of balls, playing with friends, and in team company tournaments. My son learned a lot about management of a business as well as having a great time. It builds responsibility and learning both an individual sport and team sport.

Your children should be learning all of the sports that help them socialize and give them more tools as they become adults. Both female and male students learn great skills - and in this one the girls are as competitive as the boys. It is great for them all. If you go to a private club they have a lot of support for children and teenagers so this is what we can do for those that do not belong to a private club. Next best thing.