HomeMy WebLinkAboutWinter Springs Golf Course Draft Feasibility Study
Acquisition Feasibility Analysis
For Winter Springs Golf Club
in
Winter Springs, Florida
W~~~~.~~gs
Prepared For:
City of Winter Springs
Ron McLemore, City Manager
1126 E State Road 434
Winter Springs. FL 32708
Prepared By:
NGI!
CON$UU',NG
1150 South U.S. Highway One, Suite 401
Jupiter, FL 33477
561.744.6006
March 2006
Acquisition Feasibility Analysis
For Winter Springs Golf Club
in
Winter Springs, Florida
March 2006
Table of Contents
INT~:~~:~~i::,~~~~ES~~.~.~~:::::::::.':::..........:::.::.:::::::....:::::::::
Subject Facility ...... ............ .................. ........... ......... .......... ........ ................ ................... ..... ............ 2
Market Area Overview........... ....... ... .............. ....... ............. ................................................. ...........2
Subject Facility - Recent Operational Performance .....................................................................3
Financial Overview........................ ......... ...... .............. ..... ........ ........... ........ .............................. ..... 3
Summary Conclusion. ........ ................. .................. ................... .......... ........ .................. ......... ........4
SUBJECT FACILITY - THE WINTER SPRINGS GOLF CLUB .....................................5
Site Overview.......... ........ ...... ........... ......... .... ........................ ........ ............................... ...... .... 5
Location - Regional Context ......................................................................................................... 5
Inventory of Facilities ............ ........................ ......... ....................................... ......... ............ .... 6
Golf Course ..... ............. ............................ ........ ...................... ............. ......... ..... ... ..... .................... 6
Driving Range/Practice Area ............. ..................... ..... ........ .................. ........ ....................... .........8
Clubhouse ...................... .......... ........ ........ ........... ............... ............. ....... ....... ............. ...................8
Maintenance Facility and Other Structures ................................................................................... 9
Present Situation.................................................. ..... ...... .......................................................9
Needed Improvements ................. .... ..................................... ........... ................................... ........ 10
Summary - The Winter Springs Golf Club........................................................................... 11
MARKET ENVIRONMENT .. ......... ............... ......................................... .......... ...... ........ 12
Regional Market Overview........................................................... ... ....... .... ... ....................... 12
Regional Demographic Analysis .................................................................................................13
Golf Demand Issues. ...... ................. ......... ....................................... ............ ........................14
National Trends .. ......... ...........,.,.... .......... ......... .................. ........... ............................. ......... ........ 14
Local Golf Market ..............................................................................,.........................................15
Local Area Competitive Public Access Golf Facilities.......................................................... 17
Basic Competitive Issues: ..................................................,........................................................17
Competitive Facilities Map ..........................................................................................................17
Local Golf Facility Comparison Chart....................................................................................,.....17
Growth of New Facilities................ ........... ....................... ........,................................................... 19
Trends In Municipal Golf Facility Operations .......................................................................19
Markel Environment Summary ................,...........................................................................20
WINTER SPRINGS GOLF CLUB BASIC OPERATIONS ............................................22
Revenue Sources ........................... ....................................... ............................................ ..22
Activity Levels ...... .... ....... ........... ........ ............ .......... .......... ............ ............. ........ .......... ...... ......... 22
Revenue Analysis.......... .......... ..... .................. ............. ....... .............................. ................. .......... 23
Expense Analysis ..,...",.. ...........,."....'"",..".."...',.. ......, ,.... ...., ......... .......,........
Winter Springs Golf Club Operations Summary ..........................
Net Income (2002-2006) .................................................'fi..
PRE~::::~.:F~:=~:~~~~::::.:.::...:.::.~~~~..::i::::.m~:
Green Fee/Activity Assumptions..................................................................... ....................,26
Winter Springs GC Expense Projections .............................................................................27
Fixed Expenses ...........,., ........... .......,. ......... ......... .......... ......... ..... .......... ............ .... .....................27
Other Expenses .............. .......... .... ...... .......... ................... ......... ....'.. .... .... ........... ..... .....................29
Cash Flow Statement........................................................... ................................................29
Cash Flow Results.......... .............. ..... ............ ...... ......... ........... .............. .... ........ ....... ......... .......... 29
Supportable Debt Analysis...... ............................................................................................. 32
Summary Financial Performance at $1.2 Million In Debt ............................................................ 32
Summary Financial Performance at Higher Debt Loads............................................................. 33
Limiting Conditions........................................ ....... ........... ...... ............................................... 34
SUMMARY STATEMENT. ............ .......... .............. .......... ............. ....... ............. ............. 35
APPENDIX.. ............... .... ................. ....... ......... ....... ......... .............. .............. ..... ..... ........ 36
Appendix A - ..........................................................................Errorl Bookmark not defined.
Appendix 8 - ..........................................................................Errorl Bookmark not defined.
Introduction and Executi
NGF Consulting, a subsidiary of the National Golf Foundation,
Winter Springs to assist in evaluating the possibility of the Cit
Club (Winter Springs GC) and operating it as a City-owned m golf course. At present the
Winter Springs GC is a daily fee golf club serving both daily play customers and a handful of
members. The facility had been struggling to keep up members and revenues and was taken
back by Its lender, Bank of America, and has been operated under contract with Kitson &
Partners of Orlando. Bank of America has approached the City of Winter Springs about the
possible acquisition of the facility. The City of Winter Springs is considering the feasibility of the
acquisition, and the results of this market and facility analysis will be used to help determine the
appropriate course of action.
Under consideration for this report is the present condition of the Winter Springs Golf Club and
the Winter Springs/Seminole County area public golf market. As of March 2006, the Winter
Springs GC Includes an existing 18-hole regulation length golf course, driving range and a
clubhouse (with a snack bar/grill and pro shop). If acquired. the Winter Springs GC facility will
be operated as a pay-tor-play golf facility that may include some discounting for City residents
and/or may include some form of resident season pass or annual membership. The purpose of
this market and facility anal'lsis ~rQvide the city wit~~ fair emat~ as to theStie a'la
strength of th~)~1 golf market and the overall economic potential of the Winter Springs Golf
~fu6 as a CIty-run municipargalf c60(S6.
~ ~-
The key issues to be evaluated in this report include:
. Size and strength of the local golf market
. Present operating condition of the Winter Springs GC
. Actual performance of other publiC golf facilities in the market
. Economic potential of the Winter Springs facility after City acquisition
. Amount of debt that can be supported by the gOlf operation
Activities conducted in completion of this consultant's report included meetings with the City of
Winter Springs City Manager and Mayor. a visit and inspection of the Winter Springs Golf Club
facility, meetings with key principles involved in the present Winter Springs operation, collection
of materials to aid in understanding of the Winter Springs area golf market and a visit to several
of the area's competing publiC golf facility operations.
SUMMARY OF FINDINGS
NGF Consulting has studied the golf market in the Winter Springs/Seminole County, Florida
area, with special focus on utilization and pricing of the existing golf courses. In summary, there
are indications that the golf market in the area is struggling, particularly the higher and middle
fee public golf course segment of the market. This has resulted in a golf market driven by
numerous publiC golf courses trying to maintain market share with considerable and aggressive
discounting of fees. The subject Winter Springs GC has been one of these facilities that has had
Naiionai-GOlf -FooncrationConsullin9,'lnc:-=Wi'nier Springs GC. Winter Springs, Florida "::ORAFT-REPoRT :'1
Subject Faclllty
. The Winter Springs Golf Club is a good quality golf course that appears to be an
appropriate fit to become a municipal golf course for the City of Winter Springs. The golf
facility includes the 18-hole regulation golf course and a lighted driving range, and has
good clubhouse facilities with ample room for future expansion of the clubhouse or the
addition of some form of open-air tent or toumament pavilion (just east of clubhouse).
The overall participation rate at the faCility from local sources, including the City of
Winter Springs residents, adds to the appeal of the facility as a municipal golf course.
. However, NGF Consulting notes with caution that we observed several upgrades
needed at the golf course, including some upgrades to items that could be considered
potential liability problems. These needed improvements (totaling an estimated
$650,000) should be considered in addition to the purchase price as the total investment
the City would need to make to acquire and appropriately operate the subject Winter
Springs Golf Club.
Market Area Overview
. The immediate Winter Springs market area shows age and income demographics that
generally coincide with strong demand for golf. The roadway and traffic infrastructure
tends to support the subject Winter Springs Golf Club as a good location for ease of
access from all parts of the community.
. The overall greater Orlando metropolitan market has experienced considerable growth in
key segments that influence golf demand including population growth, industrial/
employment growth and growth in tourism. The seemingly healthy overall economic
condition of the region is viewed as favorable for continued golf facility operations.
. The demand for golf has declined in some parts of the southeast U.S. in the 2002-2005
period, although we note that severe weather, including hurricanes in 2004 and 2005,
clearly has contributed to this finding. As a result, the actual rounds and revenue
performance of individual golf facilities has shown declines nationwide, and in central
Florida.
ef
....NaiiOnalGolf Foundl,iionConsuiiing. Inc. .: Winter SprtngsGC:"Wlnter Springs. FlOrtda"::.(fRAFT REPORT - 2'
.
Subject Facility - Recent Operational Performance
The Winter Springs Golf Club operates as a daily fee golf club with six primary sources of
revenue: annual pass fees. carts, green fees, driving range, merchandise and food and
beverage. In total. these revenue drivers have generated as much as $1.4 million in revenue in
2002 and 2003, declining to an expected $1.06 million in 2006. Total expenses to operate the
facility are approximately $1.4 million:!:, leaving very little available for debt reduction.
Winter Springs Golf Club
Net Income Summary (2002-2006)
2002 2003 2004 2005 2006
TOTAL REVENUE $1,476,834 $1,410.516 $999,062 $726,56$ $1.069.724
Less: Direct Costs $275,434 $288.729 $166.331 $112.410 $154,482
TOTAL NET REVENUES $1,201,350 $1,121,787 $832,732 $614,156 $915.243
TOTAL EXPENSES $1,423.281 $1.529,830 $770,529 $828,169 $1,061.072
NOI (Before Debt) ($221,931) ($408,043) $82,203 ($214,013) ($145,829)
Financial Overview
NGF Consulting has prepared a cash flow model that is based on the assumption of the
operation of a good-quality public golf facility with appropriate support amenities that is
maintained and operated to reasonable standards for modest fee public golf courses in the
Orlando region. We have also assumed self-operation by the City of Winter Springs and the
Parks and Recreation Department. ~ile w~ Illcqgnize that the. City may look to a private
oQ.erator to manage the facility for the City, this esti")ate willlJ.elp to establish parame~~rs_~er
whiCh the City can reasonably deter~l1Ine an appropnafe man~gement fee ~naroflease
arrangement. ---,- -,~""",..,-,,-
,~
The results of NGF Consulting's preliminary cash flow projection shows that the Winter Springs
Golf Club can expect to generate approximately $1.136 million in gross operational revenue in
the first full year after acquisition (2007), growing to $1.78 million by the fifth year of operation.
Considering all preliminary expense estimates prepared by NGF Consulting for this study, total-
operating losses the first two years will total about ;!:$330,OOO. Annual profit available for capital
investment reduction will be just over $90,000 by the fifth year of operation,
Based on a preliminary capital cost reduction schedule prepared by NGF Consulting for this
study, the newly acquired Winter Springs Golf Club would be able to eam enough in net income
to cover a $1.2 million in debt for the acquisition and improvement of the facility. Even at this
National Golf FoundationConsuttlng. InC~':'WiOter Springs Gc. winie; Springs, Florida:'ORAFT REPORT'=3
projected debt level it is expected that the facility would lose money for the fi
operation. finally breaking even (after debt service) in the fifth year of 0
Consulting notes that the $1.2 million .warranted investmenf for the
estimated purchase price. excluding the estimated $650.00
the appropriate standard for the City of Winter Springs. We
projections used to estimate this figure are based on the assu
improvements totaling approximately $650,000 are made at t , as noted previously in
this report. Given this, the total purchase price for the facility cannot exceed $550,000 and
still be comfortably supported by the golf course after the fifth year of City operation.
The summary financials of the Winter Springs Golf Club after acquisition at various debt loads
will look as follows:
Projected Net Cash Flow
Winter Springs Golf Club @$1.2 Million Debt
."'-
2007 2008 2009 2010 2011
TOTAL NET REVENUES $960,530 $1,168,870 $1,313,280 $1,410,030 $1.517,720
TOTAL EXPENSES $1 210 250 $1 258 660 $1.314.926 $1 365 123 $1 427 328
NOI (Before Debt) 1$249,720\ 1$87 790) 1S1 646\ $44,907 $90,392
Debt Service
$1.2 mm @ 6,5% for 30 years $91,893 $91,893 $91,893 $91,893 $91,893
After Debt Income
(Cily support required) ($341.613) ($179.683) ($93.539) ($46.986) ($1.501)
Cumulative Shortfall ($341.613) ($521.296) ($614.835) ($661.822) ($663.323)
Summary Conclusion
In summary, NGF Consulting believes that there is demonstrated demand for lower-fee publiC
golf in the Winter Springs/Seminole County market. However, we also note that there are
several existing golf facilities present in the market to serve this demand making for a
competitive business situation for publiC golf courses. The result of this situation is that the
Winter Springs GC, if acquired as expected. will be highly dependent on the facility's ability to
create a good quality public golf experience at an affordable green fee level. This means that
appropriate pricing, including a frequent user discount card, will be necessary for the new facility
to distinguish itself and attract adequate play levels from all market segments. One significant
target market segment is the beginner, female, and family/junior golf segment, which could
contribute significant play to the proposed Winter Springs GC.
NGF Consulting fully expects that well-designed golf courses with good management, expert
maintenance, well-organized promotion, and good customer service should be able to achieve
the market projections made in this study indicating that the Winter Springs Golf Club should be
able to support a total project investment of about $1.2 million to acquire AND renovate the
facility. With favorable weather conditions. increased desire for new residents to take up the
game of golf. and the continued increases in area tourism. the new Winter Springs golf course
could even outperform the market projections made by NGF Consulting.
'Naiionai-G'oifF;undaiiO,,'CC;nsuiiii,g. Inc:=Wiilier'Sprtngs GC. WiiiiersPr1ngs:Fiorida -'DRAFT REPORr-=4
Subject Facility -
The Winter Springs
The subject property is the Winter Springs Golf Club, an 1 S-
miles northeast of downtown Orlando In the City of Winter S
includes one regulation 18-hole golf course (opened 1964), as
service clubhouse.
st 12
e golf facility
a driving range and full-
The City of Winter Springs, with a population of 31,666 (2000 Census), is located in south
central Seminole County and is part of the greater Orlando MetropOlitan Area (population 1.9
million). The Winter Springs Golf Club is one of two golf facilities in the City, the other being the
private Tuscawilla Country Club. As of March 2006, the Winter Springs Golf Club is operating as
a daily fee golf course with most all activity at the facility on a 'pay-tor-play' basis. Recent
economic trouble has led the facility to be taken over by Bank of America and operated through
a management arrangement with the Orlando based Kitson & Partners. The City of Winter
Springs is considering the acquisition of the subject Winter Springs Golf Club in an effort to
preserve the golf course as 'open space' and convert the facility into a municipal golf course.
SITE OVERVIEW
The Winter Springs Golf Club Golf Club is located 12 miles northeast of downtown Orlando.
Access to the course is provided by via State Road (S.R.) 434, just east of the intersection with
U.S. 17-92, and approximately four miles east of Interstate4 and six miles west of the Central
Florida Greenway (S.R. 417). It is generally eesy for customers to locate the course.
The subject property location and vicinity layout maps are displayed below:
Location - Regional Context
Nalio,:;aIGOliFo~i1datio;'-Con6U~i;;g:'iOc.':' Winter sj)'iingsGC, WinterSprlngs;Fk;iida- DRAFT REPORT - 5
INVENTORY OF FACILITIES
Golf Course
The Winter Springs Golf Club opened in 1964 and features
golf architects Bruce Devlin and Robert Van Hagge. The cou
longest tee and is home to what is widely considered the firs
course sits on generally flat topography with some rolling elav anges and good drainage
through natural percolation and runoff into several retention lakes on the golf course. The good
drainage is considered a strong positive feature for the golf course In that it allows for a quick
return to activity after periods of heavy rain. The course features cart paths around the tees and
greens on the par-4 and par-5 holes and continuous paths for the par-3 holes. The paths are a
combination of concrete and asphalt and in many places are in need of improvement and/or
repair. Cart path improvement will help to reduce wear and tear on the carts and also help to
quickly return the course to playability after heavy rains.
The golf layout is traditional with each nine-hole course originating from, and returning to the
clubhouse. The boundaries of the golf holes are mostly lined with trees, including a pair of
2,OOO-year old cypress trees. The total acreage of the golf course is a generous 177t. acres,
more than enough to comfortably accommodate the golf course and its amenities. The grass
types include hybrid Tifdwarf greens and Bermuda fairways and tees. There are a total of 63
sand bunkers on the golf course. The course Includes four sets of playing tees to accommodate
golfers of all skill levels. The scorecard for Winter Springs Golf Club is as follows:
Winter Springs Golf Club - South Course
Tee Par Vards Slope Rating
Blue 71 6.589 128 72.6
While 71 6.088 124 70.3
Green 71 5.709 118 68.4
Red 71 s.o33 118 69.S
The above scorecard shows the relatively challenge of the course from its back tees, and the
generally easier forward tees. The green tee is also rated as a 'championship' tee for ladies
(130/73.3). Overall, the Winter Springs Golf Club has high appeal for golfers of all skill levels for
both playability and aesthetics and beauty (as shown below).
Natio~ai"GOirFoundalio;;"Consu~ing':inC:-':"Wlnter Springs GC:"Wlnter Springs:"'Florida - ORAFT-REP<:i'Rf:'6
Typical Winter Springs Golf Course views.
Typical Winter Springs GC Green.
Winter Springs GC water feature.
There are several roadway crossings on the golf course, including one for the roadway into the
maintenance area. At present these roads do not handle much auto traffic and therefore is not
an issue for possible interaction between golf carts and automobiles. However, as the
immediately adjacent residential community grows this may become a liability issue for the
future operation of the facility.
Roadway Crossing at Winter Springs GC Green.
..--- National GOlrFoundaiiOnConsultlng. Inc. - Wlnter'Springs GC. Winter Springs,-i:'iOrlCi8-=-ORAFl RepORT - 7
Driving Range/Practice Area
The Winter Springs Golf Club includas a 25-station driving range th
There is also a practice green and a short-game practice a
use by golfers who can pay for range balls either on a per
a pre-paid annual range membership. The driving range and
NGF Consulting valuation.
Views of the practice green and driving range area.
Clubhouse
The clubhouse for Winter Springs Golf Club is located at the south endofthe property, between
the golf course and parking lot and in view of S,R. 434. There appears to be adequate parking
for the clubhouse and golf course in the asphalt parking lot. The clubhouse is approximately
5,100 square feet (sf) and contains a grill, lounge, dining room, pro shop, men's and women's
restrooms, full kitchen and an administrative office. The clubhouse was built in 1973 as two
separate parallel structures with a central breezeway. In 1999, this clubhouse underwent a
:!:$700,OOO renovation to combine the two structures into one larger facility.
Views of lhe golf clubhouse.
The food and beverage service tied directly to the golf course consists of a small grill area inside
the clubhouse. This service offers a wide variety of menu Items. and as such has consistently
. ... ....NatiO;;aiciolf FoundatiOn'Consulting, lnc.-='winter SpringsGC. Winter Spring5,"'FIOrida - DRAfT REPORT ':8
~
produced a large share of total facility revenues. The present operators have
aggressive in trying to attract parties and banquets un-related to golf, ell
large golf groups and tournaments.
Maintenance Facility and Other Structures
The maintenance facility contains approximately 5,600 sf and I e-story metal building with
a metal roof and concrete floor and is functional tofacllitate easy access for equipment. The
facility was built in 1973 and inCludes two restrooms that also serve as the on-course restrooms.
The maintenance equipment is a mix of newer and older units. with most equipment between
three and five years old in good condition and owned by the golf course.
A new cart storage building has been added in 2005 and is located just west of the clubhouse.
This facility Is approximately 3,200 sf and will house the 75;t electric carts that are presently
leased by the facility owners.
The golf course is irrigated by a T oro Vari- Time system consisting with a single row delivery
system operated by Rainblrd with about 600 total irrigation heads. The water source is effluent
and provided by the City of Winter Springs.
Views of the maintenance shed and cart storage area.
PRESENT SITUATION
At present, the Winter Springs Golf Club is owned by Bank of America after re--possession from
a previous owner that defaulted on the property debl.Bank of America has contracted with
Kitson & Partners for the operation of the facility during the present period during which the
facility is being openly marketed for sale. The Winter Springs Golf Club was part of a package
operation that also Included two other local golf courses - Twin Rivers Golf Club and Sabal
Point Country Club (now closed). DetaUs of the contract arrangement between Bank of America
and Kitson & Partners were not disclosed to NGF Consulting and are not key to this feasibility
analysis as prepared.
The course is operating as a daily fee golf course for the area. In addition. the club has an
annual membership program that at one time achieved over 150 members. Total golf play was
estimated at about 30,000 rounds in each of the last three years, although this amount Is
considerably lower than the 55,000+ rounds documented by NGF Consulting at Winter Springs
Golf Club in the mld-1990s. We were told that about 70% of the golf play comes from the Winter
" "Naiional Go"1f Foondatlon consulilii9;" inc. - Winter springs'GC. winiar Springs. Florida :'ORAFr "rePORT - 9'
Needed Improvements
A preliminary inspection of the subject Winter Springs Golf CI GF Consulting indicated a
golf facility that has generally been well-maintained but several needed capital improvements
have been deferred over the past five or more years. Many areas of the course are in need on
minor repairs as a result of storm damage, particularly as it relates to removal and/or
replacement of trees that have been lost due to recent hurricanes. Other improvement items
noted by NGF Consulting include:
. Cart paths need to be repaired and/or replaced (!12,OOO linear feet.)
. The cart path / bridge system between holes #4 and #5 needs improvement.
Springs, Casselberry, Oviedo, Longwood, Altamonte Springs, north Orlando
remainder from various parts of the greater Orlando region and other t
Most of the members at the facility are from the City of Winter n
. Upgrade I repair of on-course restroom at hole #14, new restroom added at #6.
. Clearing drainage ditches on holes #1.10 and 18.
. Repair of damaged netting on the driving range.
. Control of pest (mole cricket) problem.
The total capital requirement for these items is estimated by NGF Consulting to total
approximately $650,000. The most important of lhese capital improvement projects are the ones
that relate directly to increased revenue (improved cart pathS) and those that relate to safety
and/or potential liability issues (range netting and bridge on #4-5).
Views of needed bridge and restroom improvements.
N8iio;;;;'"j'Goii"l"oundation-Consulting:'lnc. - Winter Springs GC. Winter sjilngs. Florida - DRAri-RePQRT:'1'O
SUMMARY - THE WINTER SPRINGS GOLF CLUB
The Winter Springs Golf Club is a good quality golf course that app
to become a municipal golf course for the City of Winter Sp .
18-hole regulation golf course and a lighted driving range, a
with ample room for future expansion of the clubhouse or
tent or tournament pavilion Gust east of clubhouse). The ove
from local sources, including the City of Winter Springs reside
facility as a municipal golf course.
However, NGF Consulting notes with caution that we observed several upgrades needed at the
golf course, including some upgrades to items that could be considered potential liability
problems. These needed improvements (totaling an estimated $650,000) should be considered
in addition to the purchase price es the total investment the City would need to make to acquire
and appropriately operate the subject Winter Springs Golf Club.
~"-~-NationaIGoii"'Foundation Consuttlno:u'inQ.- - Winter Springs G(i~Wint;r Springs. FJorid8~:-ORAFTREPORT-11
To aw~~ly a~ ~::~:~.:~::~ent 100"
course exists must be fully understood. Uke any other busi Golf Club
will be an integral part of the local community and economy. elpful to examine
the trends in the local golf economy and their potential impact value of the subject Winter
Springs facility. In this section of this report. NGF Consulting will provide an overview of
important factors that characterize the Winter Springs I greater Orlando golf market.
REGIONAL MARKET OVERVIEW
Winter Springs is located in the Orlando Metropolitan Area. approximately 15 miles from the
downtown area of Orlando. The City was incorporated in 1972 with approximately 6,000 total
acres. and through annexations the City now encompasses 8,364 acres. The majority of Winter
Springs' land use (56 percent) is comprised of residential components including single-family,
multi-family and mobile home developments. As a whole, Seminole County is one of the fastest
growing counties in the State of Florida, which is one of the fastest growing states in the nation.
Despite this, the City of Winter Springs is not expected to exceed 38,000 residents before the
year 2010 (1.73% annual growth). Other key findings on the Winter Sprlngs local area:
. Climate - The City of Winter Springs enjoys a year-round climate that is highly
conducive to golf participation. The extremes in daily temperatures rarely exceed 100
degrees in summer or are lower than 20 degrees in the winter. The average annual
precipitation in the City is 50 inches per yea, most of which occurs in the June
through September rainy season.
. Traffic - The City of Winter Springs is located within an urbanized portion of a
Metropolitan Planning Organization (MPO) - Metropolitan Orlando. The main roads
in and around the City are as shown below. These roadways provide the bulk of the
automobile traffic in Winter Springs and facilitate traffic to and from neighboring
towns, and continue to be key arterials for access to the Winter Springs Golf Club.
· Central Florida Greenway (S.R. 417) - The Greenway is a north-south
principal arterial located along the eastern boundary of the City. In Seminole
County it is a four-lane divided controlled-access highway that serves traffic
coming into and out of the County. The new interchange at 434/419 has
improved access to Winter Springs and stimulated commercial and
employment activity in the immediate vicinity.
U.S. 17-92 - North-south principal arterial located along the western
boundary of the City. It connects with Sanford tpthe north and Orange
County to the south. The route passes through Orlando. Winter Park,
Maitland, Casselberry, Longwood, Winter Springs, Lake Mary and Sanford. It
is currently a six-lane highway in Winter Springs, and four lanes north of
Shepard Road.
. S.R. 434 - A principal arterial that runs from Edgewater Drive near Orlando to
Altamonte Springs, then east to Oviedo, and then south to Colonial Drive. It is
currently a four-lane highway in Winter Springs,and the roadway on which
the subject Winter Springs GC sits with of 27,000 cars per day passing.
m_"NiiiiOnaiifolf Foun(i~iiOnCo;;sulting, Inc. - wi;ier SpringS Gc:Winter SpririQ;:'FiOrida - DRAFT REPORT'-12
. S.R. 419 - A minor arterial that runs from S.R. 434 in Winter Sprin
17-92 near Lake Mary. Within Winter Springs it is a two-Ia
highway.
. Tuskawilla Road - A County minor arterial that r
Springs to S.R. 426 near the orange County line.
. Seasonal Population - As a whole, Florida tends to lea e nation in housing units
held for occupancy during limited (winter) portions of the year, particularly in winter
season. This seasonal population has significant impact on golf operations of all
types in Florida. leading to generally crowded golf facilities in winter and much lower
demand in summer. Despite this reality, the City of Winter Springs Comprehensive
Plan includes an estimate of fewer than 300 seasonal (winter-only) residents in
Winter Springs.
. Town Center - A detailed master plan was prepared for the Town Center to provide
a local core for residence, employment and recreation, all within immediate proximity
to the subject Winter Springs Golf Club.
. S.R. 434 Corridor Vision Plan - The City adopted a vision plan for the S.R. 434
corridor in 1997. of which the subject Winter Springs Golf Club is in the
"Redevelopment Area Overlay District" (S.R. 434 between U.S. 17-92 to Hayes Rd.).
The intent of the plan was to create design guidelines to promote orderly
development of the corridor.
Regional Demographic Analysis
The basic Demographics for the greater Winter Springs market are shown in the table below.
More detailed demographics are provided in the tables of Appendix B.
Summary Demographics
SITE: Winter Springs GC ..____!!.mL. ........~.9.",!!!1.__._._1!mL_~~J:!IL_Flo@It"____... .l,l.:.~,
Population 1990 142.369 443,811 813.963 1.269.039 12.937,941 248,709,429
Population 2000 168.239 533,748 1.013.800 1,677,210 15.982,378 281,421.211
CAGR 1990.2000 1.68% 1.86% 2.22% 2.83% 2.14% 1.24%
Population 2005 Estimate 179.049 580.922 1.109,850 1.899.248 17.633.938 296,459,203
CAGR 20()(}.2005 125% 1.71% 1.83% 2.52% 1.99% 1.05%
Population 2010 Projected 189.247 625.535 1.202.230 2.110,689 19.219.041 310.728.811
CAGR 2005-20 t 0 1.11% lA9% 1.61% 2.13% 1.74% 0.94%
Median HH Ine $53.483 $50,316 $48,572 $46.000 $42.889 $46.615
MedIan Ace 38.8 38.8 35.7 38.1 39,4 36.3
Source: Tactician, Inc. and NGF Consu~lng. CAGR " Compound Annual Growth Rate
. The immediate Wintar Springs area population is growing a little slower than the
surrounding greater Orlando metro region. but still faster than the overall U.S. The
local area shows median age and income demographics that are much higher than
the surrounding Orlando market and the U.S. as a whole, indicating a higher
proportion of older age and higher income residents residing close to the subject
Winter Springs Golf Ciub. Older age and higher income segments tend to show
--'National aOifFoundalion consuiiing";"lnc. - Winter Springs GC.-Winter sPrings~ FIoMd;"::::"ORAFT REPORT - 13
higher golf participation rates and play golf with greater frequency tha
lower income segments.
GOLF DEMAND ISSUES
National Trends
Golf participation in the U.S. has grown from 3.5% of the pop
12.6% of the population today. Growth in this figure has slowed ramatically with almost no
observable growth in golfers in the U.S. between 1995 and 2005. Other surveys completed
outside the golf industry show the number of people who "identify themselves as golfers" to be
higher than NGF statistics, indicating a large potential "latent" demand from very inactive gOlfers
due to the NGF statistics based on actual participation (at least one round in the last year).
As the growth in demand for golf has stabilized, the supply has grown at a very rapid rate, with
an average increase of about 2.1 % per year. With the increase in supply, we are seeing a
marked increase in competition. In some markets, the supply appears to be greater than the
demand.
In addition to increased competition, other factors have contributed to a decline in the number of
rounds played since 2000. These include: 1) a worsening economy; 2) the aftereffects of 9-11,
which greatly reduced the traveling golfer market; 3) the increasing time pressure On individuals
and families; and 4) abnormally poor weather conditions over the past few years in much of the
U.S. The combination of these factors has caused many golHacilitias to become distressed,
particularly those that have a high debt load such as the subject Winter Springs Golf Club. The
level of golf course closings has nearly quadrupled from an annual average of 24 courses per
year from 1993 - 2001 to 48 courses in both 2002 and 2003, to 68 course closings reported for
2004, and 93 reported for 2005.
In terms of the total number of rounds produced, NGF estimates that rounds fell about 1.5% in
2003, after a 3% drop In 2002. Mid-year NGF research indicates a rebound of about 2.5 to 3.0
percent in 2004. The Southeast U.S. Region. which Il'lCludesFlorlda, saw rounds drop by
about 2.6 percent in 2004, after a 3.6 percent decline from 2002..2003. This immediate local
market has had significantly fewer play days in the last 8-10 months due to various weather-
related closures.
Rounds Played 2000-2004 - Total U.S.
530
520
510
500
490
480
3% Drop
518 /
MlUlon".. .... ................ .................. .. .. . .... ................................
1.5% Drop 0.7% Gain
-~..........~50i........^".............."71:....~..... ....... ..........................-..
Million / " 495 499
.... ..... ..... ...1 "Million. . . ....MUlIon...
-=,I:I=
2000
2001
2002
2003
2004
........NationaiGolfFoundatlon co;;s~~j;;ii.lnc:':" Winter SpringsGc:Wiili;':"sprlngs, Florida":::OAAFT"REPORT ':14
On the positive side, the growth in golf course development has also slowed
virtual standsUII locally. It is not expected that any new golf courses wn
market for the foreseeable horizon. This should help ease some oft
Local Golf Market
The local Winter Springs, Florida golf market is part of the Ort lorida Designated Market
Area (DMA). The table below displays some basic data about the Orlando DMAgolf market,
suggesting the relative strong demand in the local Winter Springs/Seminole County area.
Orlando DMA Golf Demand Ranking.
Predicted Household Participation Rate
Rank (of 211 DMAs)
Predicted Number of Golfing Households
Rank (of 211 DMAs)
Predicted Number of Rounds Demanded - 2002
RanI< (of 211 DMAs)
Source: National Golf Foundation - 2005.
19%
84
254.109
19
9.280.624
10
Local Golf Demand
Local Area Golf Demand
Golf Demand Indicators 5ml 10ml 15ml 30ml Florida U.S.
# of Golfing Households 15,454 45.998 81,306 137.068 1,290,346 20.392,712
Number of Rounds Played 394,697 1,199.958 2,180,254 4,314,646 54,298,400 495.441,760
Golfing Household Index 123 116 105 106 102 100
Rounds Plaved Index 129 124 116 137 177 100
Source: National Golf Foundation. 2005
The above data shows a very large golf market in Orlando and Winter Springs with an estimated
15.000+ golfing households within five miles and over 137,000 golfing households within 30
miles. These golfers are projected to demand as many as 400.000 rounds of golf per year in the
five-mile ring and almost 2.9 million in the 20-mile market area. The residents of the local 5-mile
Winter Springs market area are 23 percent more likely to be golfers than the total U.S. market
(Index=123), and the average golfer in the local Winter Springs market plays an average of 29
percent more rounds per golfer year than the total U.S. (Index=129).
Local Golf Supply
The Orlando DMA has adequate supply to meet this demand. The DMA has the third most
resort golf courses and the ninth most premium (highest fee) facilities in the nation. In its lowest
supply measure, Orlando ranks only 33rd In the nation in terms of private clubs.
, "National Golf Found;jtio':;Con8~iiir;g:"iiiC~- Winter Springs GC. Wi';-,er Springs. Florida - DRAFT REPORT - 15'
Characteristic
Total Number of Facilities
Public Facilities
Private Facilities
Resort Facilities
Premium Facl1ities
Standard Facilities
Value Facilities
Golf Supply Summary
ISmi 10ml 15ml 30ml Florida U.S.
Total Golf Facilities 6 18 32 88 1,066 16,057
Public Golf Facilities 4 13 23 69 655 11,702
Private Golf Facilities 2 5 9 19 411 4,355
Total Golf Holes 108 306 576 1,674 21 ,600 270,207
Public Golf Holes 72 216 405 1,323 12,726 191.979
Private Golf Holes 36 90 171 351 8,874 78,228
Source: Nalional Golf Foundation. 2005
--......."" ,--
Household I Supply Ratio
ISml 10ml 11Sml 30ml Florida U.S.
Households per 18 Holes: Totel 11.351 12,6.24 13,022 7,509 5,685 7,343
Households per 18 Holes: Public 17,027 17.884 18,520 9,501 9,650 10,335
Households per 18 Holes: Private 34.054 42,921 43,864 35,812 13.639 25,363
HousehOlds Supply Index: Total 155 172 177 102 77 100
Households Supply Index: Public 165 173 179 92 93 100
Households SUDolv Index: prtvate 134 169 173 141 55 100
Source: Nalional Golf Foundation. 2005
The above data and tables show some interesting characteristics of the local Winter Springs
area and the Orlando golf market overall. First. we note that the relatively low number of golf
courses locally (6 within five miles of Winter Springs GC) makes the local Winter Springs market
appear to be more favorable for golf course operations. However, Winter Springs is not an
island and a close inspection of the data for the broader market shows a high number of golf
courses in the region (88 within 30 miles of Winter Springs GC), leading to a relatively low ratio
of households per 18-hole golf course. This means that in the overall Orlando market area there
are fewer households available to support each golf course in the market. As a result. these golf
courses are reliant on outside sources to support operations (i.e. tourists). The result of this is
that golf facilities located away from tourist centers like central and south Orlando (including
Winter Springs GC) tend to be more greatly affected by the overall saturation in the Orlando golf
market.
----'Natlonal ciOiiFoundatlOn-Consulting. 1;;c.=Winter springs GC. WinterS~FIOrlda - DRAFT REPORT::'16
LOCAL AREA COMPETITIVE PUBLIC ACCESS GOLF FACILITIES
In all of the area's golf facility supply, NGF Consulting has identified
facilities (in addition to Winter Springs Golf Club) that repre
set to the subject property. These facilities are displayed on
map, NGF Consulting provides a table displaying some basic
fees.
Basic Competitive Issues:
. There are only two golf courses in the City of Winter Springs - the subject Winter
Springs Golf Club and the private Tuscawilla Country Club. There are several other
golf facilities in the Cities and Towns immediately adjacent to Winter Springs.
· As of March 2006 NGF Consulting understands that several of the area's golf
facilities are experiencing financial difficulties. While hard financial data was not
available to fully support this understanding, the actual performance of local facilities,
including the recently closed Sabal Point Country Club, is considerably worse than
NGF Consulting's last study of the Winter Springs Golf Club in the mid 1990's.
Competitive Facilities Map
Local Golf Facility Comparison Chart
The following table contains summary information regarding the market area's public golf
courses.
"'Natio;;ai"G6~ FoundiitiOn'consuiiing:inc:"'::Wlnter Spnngs GC:"IMnter Springs, Florida - O'RAFT RePo'RT- 17
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Growth of New Facilities
While there has been considerable new golf facility development in
ten years (459 new holes added in 30-mile ring), there have
added in the local Winter Springs market. In fact, our data s
total golf facility inventory in the 30-mile market was develo
percant of the local inventory is ten year sold or less. This co
of Florida and 19.2 percent for the total U.S. This growth has cl contributed to the
increasing competitiveness of the golf market and is likely a part of the declining rounds
performance and declining incomes of golf facilities noted earlier.
Golf Course Construction Activity
5ml 10ml 15ml 30ml Florida U.S.
Total holes added past 10 years 18 45 108 459 4,779 51.984
Public holes added past 10 years 18 45 90 423 2,961 42,129
Private holes added past 10 years 0 0 18 36 1,818 9,855
Percent Total Holes Added 16.70% 14.70% 18.80% 27.40% 22,10% 19.20%
Percent Public Holes Added 25.00".4 20.80% 22.20% 32.00% 23.30% 21.90%
Percent Private Holes Added 0.00% 0,00% 10.50% 10.30% 20.50% 12.60%
Source: National Golf Foundation. 2005
TRENDS IN MUNICIPAL GOLF FACILITY OPERATIONS
Coupled with the declining rounds activity, many municipal golf facilities in the U.S. have been
experiencing declines in tolal revenue. As golf facilities are often valued like other commercial
real estate, the tolal revenues and bottom line net incomes become important measures for
establishing value.
National Norms - Municipal Golf Operations
As part of NGF Consulting's review of the proposed acquisition of the Winter Springs Golf Club
by the City of Winter Springs, we have compared the actual performance of the subject golf
facility to our national research into munlclpal golf performance. A basic comparison with
municipal golf courses nationally, as derived from 2004 actual results contained in the National
Golf Foundation's publication, Operating & Financial Performance Profiles of 18-11ole Golf
Facilities in the U.S., shows the following. For comparison purposes, NGF Consulting uses the
industry-established definition of a golf round as .one player teeing off in an authorized start."
U.S. Averag.s
Rounds Played per i8-holes 2004
If the Season III
10-12 mos. <10 mos.
26,860 27,500
3\}.830 33,720
58,170.,.._....,._._.,,,...~.~....
If Total Revenue Is
Below $1.0 mm Above $1.0 mm
24;020 34.510
u.s.
27.500
35,300
44.730
GC
Source: Operating & Financial Performanoe Profilas of te.Hole Facl1i1les In the U.S. - 2004 Edition. National Golf Foundation,
.........NatlclnaiGoif"FounCiirtiOn Consulllng7inc:= Wliliersp,iiigs GC: Winter Sp"rln9e,FlOilCi8":"ORAFT REPORT - 19
U.S. Averages
Total Revenue 2004
Bottom 25 Percent
Median
i Top 25 Percent
>-
i WintlW Spring. GC $1.069.000
r."."..".----'''...,..''''''''''-''~-- .......""."".K__""..._""".....____.. "'--'-'''''~'''-' "......."'...,-~
L~~~~:!:_~~:~_ti!:I!.~.~,~~,~:i~I~~~~~~~flI" of 18-Hole Facllilles In 1l1~,,~:::-_ 2004 Edition, National Golf Fou~~~~~:,J
U.S.
I
625,600 I
983,580 I
""",.,,!~~~~80 J
.."~.."~m__~_mm__.~.. ............._
If the Season Is
10-12 mos. <10 mo
671.$6(j 616.870
1.OcaoA70
1,683;$30
501),000
643,030
657.510
Is
Above $1.0 mm
1,170.000
1.457.820
1.889.750
--J
!
I
U.S. Average.
Total Expenses 2004
'--------r'-..-..-~'th-;S;;;on Is When-T-;;t;i'R~;;;;;j;
Below Above
U.S. 110.12 mos. <10 mos. $1.0 mm $1.0 mm
l Bottom 25 Percent 578.780 .. 657.540461.250
I Median 851 ,35() ., 1,.1l$1~20 586.fJ50
l-.!~ 25P~t~____"~_1~~~.93_~,J,,__ 1,$$&.$10718;370
I _~'-nte'._~I!.~~! G~__""'_,.__,_"_,_,."._"."_,,,.__.__ $1,061,000 -------,,,,
! Source: OperaUng & Financial Performance Profiles of is-Hole FacllilJes in the U,S, - 2004 Edffion, National Golf Foundation,
__.__._~m__.m_._~_._.~ ........................_..."'.,. ..._............._.M.'...__..~..__,...
i
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U.S. Averages I
Total Capital Expenditures Past Three Years (2001-2003) \
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MARKET ENVIRONMENT SUMMARY
The above information leads to the following summary regarding the overall market environment
for the subject The Winter Springs Golf Club in the spring of 2006:
. The immediate Winter Springs market area can be characterized as a stable bedroom
community with age and income demographics that generally coincide with strong
demand for golf. The roadway and traffic infrastructure tends to support the subject
Wi nter Springs Golf Club as a good location for ease of access from all parts of the
community. The new Town Center development further east along S.R. 434 and the
overall S.R. 434 vision for the future would also tend to coincide with good golf
consumer support for golf at this location.
'National-Golf FouneiationconSUlling. Inc. - Winter spriOgS GC: Winter Springs,-Fiorida - DRAFT REPORT - 2(f
. The demand for golf has clearly leveled off across the
the southeast U.S. in the 2002-2005 period. although that severe weather,
including hurricanes In 2004 and 2005, dearly has contri uted to this finding. As a result,
the actual rounds and revenue performance of individual golf facilities has shown
declines nationwide, and in Florida.
. The overall greater Orlando metropolitan market has experienced co
key segments that influence golf demand including POPUlation
employment growth and growth in tourism. The seemi
condition of the region is viewed as favorable for con
. In the local greater Orlando golf market we observe that demand for golf tends to be
relatively stronger than other areas of the U.S., but an ever-growlng supply of golf
courses has led to declines in rounds played per facility, including the subject Winter
Springs GC, by as much as 20 to 25 percent from the late 1990's. This has led to
financial distress for many golf facilities in the area leading to increasing defaults on debt
and even some golf facility closures. The subject Winter Springs GC falls into this
category as well.
. Most market operators that we spoke to report a drop-off in rounds played since
the late 1990s, beginning in 2000 or 2001. This is consistent with a nationwide
trend caused primarily by a poor economy combined with an increasing number
of daily fee golf courses fighting for shares of stagnant markets. In central
Florida, this trend is exacerbated by the hit that the tourism industry took after
September 11, 2001. However, most clubs are reporting that rounds activity has
been on a slight rebound in 2005 and the first months of 2006.
. In a golf market with excess capacity, the price/quality spectrum tends to
collapse as higher quality facilities drop prices to increase rounds of play at their
venues. The facilities that get caught in the middle of these situations tend to be
facilities with non-distinguishing characteristics, those remotely located within the
market, and/or facilities without well-established loyal player bases.
. Though published rack rates may not necessarily have declined noticeably, NGF
research and interviews with area golf operators indicate that average daily green fees
(actual revenue per round) have stagnated in this local and regional market in the last
several years, due to competitive forces such as discounting of fees. Due to this market
dynamic, those clubs that will not compromise rate integrity run the risk <>f losing rounds
to competitors.
. Discounting blurs the pricing structure of golf markets, as some middle and upper-tier
facilities become affordable to golfers that typically would play at lower priced courses.
These golfers may also travel further than they typically would to play these top courses
as an occasional luxury. Because of the highly competitive nature of this market, and a
demonstrated price sensitivity on the part of resident golfers, golf courses must present
a strong price/value proposition by offering a quality, well maintained golf course, quality
amenities and strong customer service to draw golfers. It is much more difficult to build
customer loyalty when discounting becomes prevalent in a golf market.
. The Winter Springs Golf Club is presently priced competitively for both memberships
and daily green fees, yet rounds are still lower than other facilities in the area, and much
lower than the SUbject itself was achieving in the 1990's.
.....,.."..~"~.NationaTGojrFoun(iation Consulling:"'"nc. - Winter spiingsGC, winter Springs. Florida :"'DRAFT REPORT":"21H
Winter Springs Golf Club Basic Op
The Winter Springs Golf Club operates as a daily fee golf clu y aily fee
players and some members. We also note an increase in cl in recent
years and expect growth in this area in 2006. Actual operating last few years at the
subject facility was made available to NGF Consulting, and we sed this data to aid in
making our project.ions. It is the experience of NGF Consulting that an existing golf facility will
tend to retain its basic characteristics of operation for the first few years after an acquisition by a
municipality, until the new municipal 'culture' and operational plans begin to take effect. Some
basic expected operating data is shown below as provided by Winter Springs GC in March
2006,
REVENUE SOURCES
As Winter Springs Golf Club is primarily a daily fee golf club, the predominance of revenues
generated by the facility are derived from daily green and cart fee revenue, as well as some
fees from pre-paid golf memberships. At present the Winter Springs Golf Club Clubhouse is
able to generate revenues that are almost comparable to the golf revenues, highlighting the
continued importance of the clubhouse operation. In all, the revenues at The Winter Springs
Golf Club will come from green fees, cart fees, driving range fees, and concessions such as
merchandise and food and beverage sales. The following paragraphs summarize each of these
revenue sources.
Winter Springs Golf Club
i8-Hole Layout
Annual Pass/Ac;tMty Levels
Golf Memberships 2002 2003 2004 2005 2006
Full Members 77 82 20 14 17
Walking Members 80 86 30 23 27
Total Golf Members 157 168 50 37 44
Rounds of Golf
Annual Pass Rounds 6.578 9,972 2,000 1 ,480 1,760
18-H Prime Rounds 7,468 5,471 16,263 10,101 16,297
9.H Prime Rounds 118 107 2,750 1,706 2,000
18-H Non-Prime Rounds 6,745 3,818 . . .
9-H Non-Prime Rounds 165 238 . - .
Twilight 1,223 418 - - 1,141
Tournament Rounds 2.007 2,983 3.957 2,458 4,301
Discounts + Specials 7,658 15,551 5,958 3,463 3,980
Complimentary 4.465 2,535 1,346 836 127
Total Rounds 36,427 41,093 32,274 20,046 29,606
SOUfC&: Winter Springs Golf Club and Kitson & Partners, Inc,
National GoiiFouildiitlon'c.onsulting, Inc. - wiiiTer Springs GC:Winter spring;:-Florida - DRAFT REPORT':-ii
Capacity Issues
A golf course's theoretical capacity can be determine<:! mathem by multiplying the
number of available tee times (utilizing only the first tee as the starting hole) in an hour by the
number of hours of daylight, minus two hours, multiplie<:! by the maximum number of players in a
group. usually a foursome, A more realistic measure, a golf course's actual capac;tytakes into
account the loss of tee times for weather. unplayable conditions.. cancellations, no-shows,
groups of less than four players, and other reasons a golf course would never actually play the
theoretical capacity such as a desire to maintain conditions. The actual capacity for a given
course is difficult. if not impossible. to calculate because most courses differ in physical
characteristics and management procedures. For example, a course that has paved cart paths
and good drainage can quickly resume play after a heavy rain, wher$as a course that does not
have paved cart paths and/or has poor drainage may have to suspend play for several hours or
the entire day. In central Florida the 18-hole public-access golf courses have demonstrated
activity In the 70.000 to 80,000 rounds per year range on 18 holes (theoretical capacity), b.Ytlbe
actual capaci of the ' - olf courses is more realistically closer to 50,000 to 6O;O(f0
roun s annuall!,'. As such. the Winter Springs gol opera IOn IS opera fng a a eve we elow its
a~ctual capaci!y. -
The distribution of rounds in the last few years shows a shift away from annu
full-fee rounds, and then ultimately to more and more discounted roun We
when the facility was playing close to 40.000 rounds, as much as 12 nt
'complimentary: or no green fee.
Revenue Analysis
NGF Consulting has reviewed the financial statements in detail and has made comparisons to
the rounds activity reports. The following tables summarize the performance of revenues for the
past five years for the Winter Springs Golf Club. va II . nt decli in
r.avenue each..y.ear througt:!l905, with a f!!.cov ue per
rc;>und by ,category shows that the operators have been severely discounti st !2.
t~~_harglng 'cart fee only' for gOlfers to play the course. ~
Winter Springs Golf Club
Total Revenue 2002.2006
-.........-..........."'....'"
2002 2003 2004 2005 2006
REVENUES:
Annual Pass Fees $133.225 $142.500 $35.650 $27.300 $32.500
Total Green Fees 388.916 359.690 123,885 107.203 187,945
Cart Fees 239.807 238.502 388,337 262,908 421.176
Other Revenue 30.963 1 2.739 2.58.2 16.037 9.770
Driving Range 13,842 31.231 49,702 31,873 45.297
Shop Merchandise 146.620 138.896 104.245 44,903 74.607
Food and Beverage 523.460 486.958 294.662 236.342 298 428
TOTAL REVENUE $1,416.834 $1,410,516 $999,062 $726.566 $1.069,724
Source: Winter Springs Golf Club and Kitson & Partners, Inc.
~Natlo;;ai'GojiFol;;;d-aiion Consulting, Inc. - WinterSp~g; GC:Winter Sprlng$~'FiOrid8':::''DRAFfREPORT - 23
Revenue Ratios
Winter Springs Golf Club revenue is derived from six primary sources:
annual passes. range revenue. retail sales and food and bever.. e
table that follows. average green fee revenue per round has
fee revenue per round has increased slightly. Overall. total fa
has remained relatively steady in the $35 to $40 range. with a
revenue per round estimates are displayed below:
Winter Springs Golf Club per ROund Revenue (2002-2006)
2002 2003 2004 2005 2006
Annual Passes $848,57 $848,21 $713,00 $737,64 $738,64
Green Fees
18-H Prime Rounds $21.95 $21,89 $4,49 $6.79 $9.48
9-H Prime Rounds $14.61 $13,83 $1.90 $5.22 $2.69
18-H Non-Prime Rounds $13.22 $14.63 $0.00 $0.00 $0.00
9-H Non-Prime Rounds $11.87 $11,70 $0.00 $0,00 $0.00
Twilight $16,17 $16,19 $0,00 $0.00 $2,64
Tournament Rounds $14.74 $11.82 $2,59 $2.32 $4.66
Discounts + Specials $10,81 $8.86 $5.94 $6,93 $1.26
Complimentary $0.00 SO.OO $0.00 $0,00 $0.00
Cart Fees $6.58 $5,80 $12,03 $13.12 $14.23
Other Revenues
Shop Merchandise $4,03 $3.38 $3.23 $2.24 $2,52
Food/Beverage $14.37 $11.85 $9.13 $11.79 $10.08
Driving Range $0.38 $0,76 $1.54 $1.59 $1.53
Other (storaoe. rentals, etc,) $0.85 $0.31 $0.08 $0.80 SO,33
Total Average Revenue I Round $40.54 $34.32 $30.98 $36.24 $36.13
SOurce: Winter Springs Golf Club and Kitson & Partners. Inc.
Expense Analysis
The Winter Springs Golf Club has provided the consultants with a complete budget for the
operation of the Winter Springs Golf Club. as well as a breakout of direct personnel expenses
for the operation. The Winter Springs Golf Club expense performance is shown below.
Golf Course Maintenance
Golf Administration
Fixed Clubhouse & F&B
Occupancy
Pro Shop & Sales
Property Taxes
Other
TOTAL EXPENSES
WINTER SPRINGS GOLF CLUB
Total Expenses. (2002-2006)
2002 2003 2004 2005 2006
$493.827 $511.938 $291.936 $348.494 $451.615
297.929 317,442 99.644 173,456 201.781
286.313 331,700 96,297 126.ns 150.782
83.349 139.949 58.612 56.087 65,562
178,500 156.670 205,782 108.289 163.732
~_.-tl:.:~,-- 20.1~-~- . -0
$1,423,281 $1.529,830 $770,529 $828,169 $1,061,072
'''---'M''~'Nation8lGolf Fou'ndaiion-consutiini~':"in~. - Winter Springs GC, Winter Spring,s, Florlda'":"ORAFT RepORT":~24
Cost of Production
Golf facilities are like any other business enterprise in that the facilities
restrictions of "production costs" - costs associated with .prod
facility industry, most of the production costs are fixed and
many rounds are played. NGF Consulting has derived from
financial statements that the total cost of production at the f
in 2006. Given this amount and the 2006 expected rounds play
ratios are as follows:
WINTER SPRINGS GOLF CLUB
Cost of Production (2002-2006)
Expenses pet Round 2002 2003 2004 2005 2006
Golf Course Maintenance $13.56 $12.46 $9.05 $17.38 $15.25
Golf Administration $8.18 $7.72 $3.09 $8.65 $8.82
Fixed Clubhouse & F&B $7.86 $8.07 $2.98 $8.32 $5.09
Occupancy $2.29 $3.41 $1.76 $2.80 $2.21
Pro Shop & Sales $4.90 $3.61 $6.38 $5.40 $5.53
Property Taxes $2.06 $1.60 $0.63 $0.75 $0.93
Other $0.23 $0.15 $0.00 $0.00 $0.00
TOTAL EXPENSES (per Round) $39.07 $37.23 $23.87 $41.31 $35.84
It costs the ~t.sptings.~rat rs a out $36.00 2006 to produce each
r~Y:~6Jf.on-tJ:leWinteF-.SpriClQS..G.DJtC~.~no In _~ara..for an apPrOpnate
~t.Qf.p!9duction. but this figure should be compared tol'fiere9'e1lT.i'ii ratios 8lltt-be-consldered
whenever fee changes are being contemplated.
WINTER SPRINGS GOLF CLUB OPERA TrONS SUMMARY
The Winter Springs Golf Club operates as a daily fee golf club with six primary sources of
revenue: annual pass fees, carts. green fees, driving range, merchandise and food and
beverage. In total, these revenue drivers have generated as much as $1.4 million in revenue in
2002 and 2003. declining to an expected $1.06 million in 2006. Total expenses to operate the
facility are approximately $1.4 million,!, leaving very little available for debt reduction.
Net Income (2002.2006)
Winter Springs Golf Club
Net Income Summary (2002-2006)
2002 2003 2004 2005 2006
TOTAL REVENUE $1,476.834 $t,4tO,516 $999,062 $726.566 $1,069.724
Less: Direct Costs $275.484 $286.729 $166.331 $112,410 $154.482
TOTAL NET REVENUES $1,201,350 $1,121.7~7 $832.732 $614,156 $915.243
TOTAL EXPENSES $1.423.281 $1.529.830 $770,529 $828.169 $1,061,072
NOI (Before Debt) ($221,931) ($408,043) $62,203 ($214,013) ($145.829)
WNa~o;;aIGol{F'oUndatio;:;-Consulting:'inc. "':'WlnterSprtngs GC. Winter Springs, Florida - DRAFT REPORT - 25
Preliminary Financial Ana:1
NGF Consulting has created a cash flow model for the conti
Springs Golf Club under the assumption of City operation b
assumptions outlined below. The primary assumption that
projections 1s lhat the Winter Springs Golf Club will be oper standard of quality slightly
above what exists at the facility today, and that the City of Winter Springs will self-operate the
facility within its Parks and Recreation department. While we recognize that the City may look to
a private operator to manage the facility for the City, this estimate will help to establish
parameters under which the City can reasonably determine an appropriate management fee
and/or lease arrangement.
MARKET SHARE CONCLUSIONS
When considering the total market share of the subject facility, it Is important to realize that the
total number of rounds to be played at the course during the first few years after acquisition may
be lower than the market opportunity appears to suggest. It is typical for an existing publiC
access golf faCility to achieve only a portion of its total potential in the initial years after an
acquisition by a municipality. Our estimates of performance for the Winter $pringsGolf Club
could change should the following conditions occur:
StrongerPedonnance
Weaker Pedonnance
Future course closings
New course openings
Incorrect price levels
Poor customer service
Faster population growth than projected
Positive regional! national publicity
Lack of loyalty to existing courses
Unforeseen surge in golf interest
Excellent yearly weather conditions
Low quality facility
Poor yearly weather conditions
Regional economic recession
These estimates shown for probable activity levels are presented in a conservative manner. It is
important to measure a newly acquired course's likely performance in such a way as to help the
City make financial decisions based on realistic expectations. It is obviously possible that either
more or fewer rounds and members will be realized. However, given the possibilities that the
market has shown, we believe that our estimates are appropriate for the central FloridaIWlnter
Springs market area.
GREEN FEE/ACTIVITY ASSUMPTIONS
. There will be several categories of rounds activity expected at the Winter Springs
Golf Club upon re-opening: peak winter rounds (weekendslholidays + weekdays).
peak summer rounds (weekends/holidays + weekdays). twilight rounds, 9-hole
rounds, tournament rounds, and other discount rounds, Including City resident
discounts.
mNatfonal Golf Fo~-rldatiOn Consuiii;;g,'i;;c:':~ngs GC. Winter sprlrigs. Florida - DRAFT-REPORT - 26
· NGF Consulting has assumed a similar program of annual passes for
Springs residents based on the present arrangement in place
GC.
.
· The green and cart fee schedule has been estimated based on the actual fees
ch r ed at Winter Springs GC in 2006, with some categories modified to reflect
/peal mand periods and discounts. This means peak winter weekendlhollday
(~ en and cart fee in the $35 range, with discounts all the way down to $8 or $9
for some 9-hole andlor discounted walking rounds..
· NGF Consulting has assumed the City of Winter Springs will take full advantage
of the lighted driving range that is present and increases over actual activity are
projected. Patrons are assumed to spend $1.50 per round of golf on the driving
range in 2007 (actual amount in 2006), increasing to over $2.25 per round
beginning in 2008.
. Spending on ancillary items such as merchandise and food/beverage items has
been estimated at $10.00 per round for food and beverage and $2.50 per round
for merchandise (actual figures for 2006). It is assumed that the aggressive
banquet and party operation will be continued after acquisition as this is clearly a
good source of revenue for the facility.
WINTER SPRINGS GC EXPENSE PROJECTIONS
N GF Consulting has prepared estimates of expenses for the 18-hole Winter Springs Golf Club
based in part on NGF ongoing research, local market input and discussions with Kitson &
Partners (management company) and the present facility manager.
Fixed Expenses
Golf course maintenance expenses (includes practice facility) have been estimated to be
$500,000 in the first full year after acquisition (2007), growing at four percent per year to just
under $585,000 by 2011. These expenses are intended to include all costs associated with the
maintenance of the golf playing area, including a lease of maintenance equipment. Overall, golf
course maintenance expenses are expected to conform to the following general schedule
prepared by NGF Consulting.
... . ..NaiioJ;i-6oii'FoundallonConsuning;'OZ:' Winter Springs GC.'w,nter Sprlngs.Fiortda'::OAAFTREPORT:"27
r'\
Estimated Golf Course Maintenance Expense
Winter Springs Golf Club. 2005
Salaries & W~9"
Fu/f.'tii1l8'EmplOye""&S"-'-"""--''''''''
Course Superintendent
1 Asst Superintendenl@ $30,000
1 Irrigation Spec. I Mechanic @ $20.000
4 Crew Members @ $20,000 each
Benefits & Taxes @ 25%
i Part. Time Labor
1...f3,10oo ~q':l~.<<U?,QQ!hE,-......._.._
Total Salaries & Wages
Utiifties
Equipment Lease
Seed, Sod & Sand (incl. Top-Dress program)
I Supplies (Chemicals & Fertilizer)
Repairs & Maintenance
Fuel & Oil
I-.M!llnlenance Administratl~'l........._...
j Total Cou.... !'!~!nt8n~~~!..~~~."..~.....
Source; NGF Consulting estlmale 2006
~ ~o;;~~._.
30,000
20,000
80.000
45,000
55,000
..................-.."'...."'...................1
$280,000:
<...............-...j
20,000 i
60,000 i
50,000
50,000
15,000
15,000
10,QQ.Q_
$500,000
General and administrative expenses have been estimated to be $300,000 in 2007, growing at
four percent per year to just over $350,000 by 2011. The general and administrative expenses
have been estimated based on the operation of a high quality golf course. Overall, general and
administrative expenses are expected 10 conform to the following general schedule prepared by
NGF Consulting.
r-_____.v___~,._.._._
I
I
I
i
~~!.'!!.~.~!~.!~.._._....
I Full. Time Employees
I Director of Golf/Head Golf Professional
I 3 Assistant Golf Professionals @ $30,000
I Benefits & TaKes@25%
I Part. Time Labor
Ii Shop Clerks, starters, rangers, elc.
. (10,000 hours @ $8.00Ihr.)
I Advertising & Promotion 10,000
Insurance 10,000
I Supplies 10,000
L.Ml~9!"lIaneous ........__.._.._... . __~&Q9.....
I Total Admlnjs!!,~~i.~.!.~~.~.!"_eral Expense _........__.__" $300,000 ....1
Source; NGF ~~~~~~~~~imate 2~........"... ...._..___.. ."'.."'_..._....J
Administrative & General Expense
60,000
90,000
35,000
80,000
.. .......Niiiional GOlf' Founda'iio~"'consulting. Inc. - Winter Sprln9s GC. Winter sp;;;;gs;'FiOrldii-- DRAFT REPORT:'''28
Other Expenses
Expenses associated directly with revenue centers such as mercha
have been assumed based on historical patterns establish
. Shop merchandise expenses (cost of goods sold) are
merchandise sales revenue. An estimate of 35% is use
and beverage sales in the snack bar.
. Expenses associated with operating a fleet of 75t golf carts has been estimated
based on an accepted industry estimate of roughly $565.67 per cart per yeer.
This estimate was intended to Include all maintenance and operational expenses,
and applies regardless of whether carts are purchased or leased by the golf
course. The estimate increases by four percent each year.
. In addition to cost of goodS sold, an additional $160,000 in fixed expenses are
assumed for the clubhousel food and beverage operation. This figure is
increased at four percent per year.
. Maintenance and repair expenses in addition to the aforementioned normal
maintenance may be necessary during the course of operating a top-quality golf
facility. NGF Consulting has included a schedule for capital improvements of an
18-hole facility of $50,000 to $70.000 per year. This money can be spent each
year, or saved as a reserve for major repairs in the future. This amount is
consistent with expectations at golf courses nationwide.
. In keeping with the conservative posture taken for this feasibility study, NGF
Consulting has assumed an operations reserve contingency expense to account
for any possible unforeseen expenses, and/or cover any annual revenue
shortfall. This contingency has been estimated to befrve percant of all expenses,
excluding cost of goods sold and the capital expense reserve.
CASH FLOW STATEMENT
NGF Consulting has utilized the previously mentioned assumptions to create the cash flow
statements in the following exhibits. Each category of revenue has been listed separately, and
an estimate of the total facility average revenue per round has been provided. All figures have
been rounded to the nearest $100 for simplicity.
Cash Flow Results
The results of NGF Consulting's preliminary cash flow projection shows that the Winter Springs
Golf Club can expect to generate approximately $1.136 million in gross operational revenue in
the first full year after acquisition (2007), growing to $1.78 million by the fifth year of operation.
Considering all preliminary expense estimates prepared by NGF Consulting for this study, total-
operating losses the first two years will total about ;t$330,OOO. Annual profit available for capital
investment reduction will be just over $90,000 by the fifth year of operation.
Based on a preliminary capital cost reduction schedule prepared by NGF Consulting for this
study, the newly acquired Winter Springs Golf Club would be able to eam enough in net income
to cover a $1.2 million in debt for the acquisition and improvement of the facility. Even at this
. U Natio.naJ Goif"FOundation con;;iijng--:~inc, ~.'winter Springs Gel Winter"Springs. Florida ~[iRAFT"'REPORT - 29
projected debt level it is expected that the facility would lose money for the fj
operation, finally breaking even (after debt service) in the fifth year of 0
Consulting notes that the $1.2 million "warranted investment" for the
estimated purchase price, excluding the estlmeted $650,00
the appropriate standard for the City of Winter Springs.
Projected Cash Flow Analysi
Winter Springs Golf Club
18.Hole Layout
ANNUAL PASS/ACTIVITY LEVELS
Golf Memberships _~~_._.__..__~OO8 -~!!
Full Members 18 25 35
Walking Members
Total Golf Members
Rounds of Golf
Annual Pass Rounds 2.120 3,000 3,800 4,400 4,800
18-H Winter WE & Hol. 7,000 7,200 7,400 7,500 7.600
9-H Winter WE & Hol. 1,000 1.200 1,400 1.600 1,800
18-H Summer WElHo!. ... Winter WD 5.000 5.600 6.000 6.300 6,500
9-H Summer WEIHol. + Winter WD 600 700 800 850 900
Twilight 4.000 5.000 5,200 5,400 5.500
Tournament Rounds 2.000 3.000 3.500 3.750 4,000
Discounts + Specials 7.500 9,000 10.000 10.500 11,000
Complimentary
Total Rounds 32120 37 700 40600
SCHEDULE OF FEES AND AVERAGE REVENUES
2001 2008 2009 2010 2011
Member Fees
Full Members $800 $824 $849 $874 $900
Walking Members $700 $721 $743 $765 $788
Green Fees
18-H Winter WE & Hol. $19.00 $19.57 $20.16 $20.76 $21.38
9-H Winter WE & Hol. $10.00 $10.30 $10.61 $10.93 $11.26
18-H Summer WElHol. ... Winter WD $11.00 $11.33 $11.67 $12.02 $12.38
9-H Summer WEIHol. ... Winter WD $8.00 $8.24 $8.49 $8.74 $9.00
Twilight $9.00 $9.27 $9.55 $9.83 $10.13
Tournament ROUnds $16.00 $16.48 $16.91 $17.48 $18.01
Discounts + Speclels $9.00 $9.27 $9.55 $9.83 $10.13
Complimentary $0.00 $0.00 $0.00 $0.00 $0.00
18-H Can Fee $16.00 $16.00 $16.50 $16.50 $17.00
9-H Cart Fee $10.00 $10.00 $10.50 $10.50 $11.00
$2.50 $2.58 $2.65 $2.73 $2.81
$10.00 $10.30 $10.61 $10.93 $11.26
$1.50 $2.25 $2.32 $2.39 $2.46
SO.50 $0.52 $0.53 $0.55 SO.56
-'~~Natio;;aiGoliFoui1dation co;;suiijng~I;;C: - Winter Springs Ge, Winter Spring'S;''Fiortda - DRAFT REPORT - 30
Projected Cash Flow Analysis
Winter Springs Golf Clu
2007 2008
2011
REVENUES:
Member Fees 538,900 $56.700 .300 $89,100 $100,200
Total Green Fees 338,300 401.700 445.400 478,300 510,500
Cart Fees 284.700 329,600 371,100 389,200 420,200
other Revenue 16,400 19,400 21,500 23,100 24,600
Driving Range 49,100 84,800 94.100 101,000 108.400
Shop Merchandise 81,800 97,100 107.700 115,600 124,100
Food and Beverage 327 200 388 300 430 700 462 200 496 300
TOTAL REVENUE ...~,1~,.~~L_l1.377.600 $1.544,800 $1.658J"~~....._._.~.i17'" SOO
Total RevanueJRound $34.73 $36.54 $38.05 $39.21 $40.46
Total Golf RevanueIRound $20.23 $20.90 $21.94 $22.61 $23.38
Leu: Direct Costa
Merchandise (75%) $61.350 $72,825 $80,775 $86,700 $93,075
Food & Beverage (35%) 114,520 135 905 150 745 161770 173.705
Total Direct Costs $175 870 $208,730 $231,520 $248470 $266.780
TOTAl NET REVENUES $980.530 $1.168.870 $1.313.280 $1.410.030 51.517.720
EXPENSES:
Golf Course Maintenence $500,000 $520,000 $540,800 $562,432 $584,929
Goif Administration 300.000 312,000 324,480 337,459 350,958
Fixed Clubhouse & F&B 160.000 166,400 173,056 179,978 187,177
Occupancy 90,000 93,600 97,344 101,238 105,287
Cart Expense 50,000 52.000 54,080 56.243 58.493
Other 5.000 5.200 5.408 5,624 5,849
Capital Exp JReserve 50,000 50.000 60.000 60,000 70,000
Operations Reserve (5%) 55250 57,460 59,758 62 149 64 635
TOTAL EXPENSES $1.210 SO $1 256 660 $1 314 26 65123 $1 427328
NOI (Before Debt) ($249.720) ($87.790) ($1.648) $44.907 $90.392
WARRANTED INVESTMENT ANAL VSIS
Supportable Debt at
6.5% for 30 years
1.25 Covera e
$1,180.395
'NaiiC;na'iGoiiFoundalion consUiiiiig:inc.-=-Wlnter Springs GC. winter-Springs. Florida - DRAFfREPOR"T'=3\
SUPPORTABLE DEBT ANALYSIS
Based on the above estimates, the warranted investment value of T
is roughly $1.2 million given this stream of income. This
value of the golf course to the City based on the cash flows
operational configuration. This value could be more or less to
their operational plan may be different.
We also note that the cash flow projections used to estimate this figure are basad on the
assumption that needed capital improvements totaling approximately $650,000 are made at the
facility. as noted previously in this report. Given this, theto"l pun:hase price for the facility
cannot exceed $550,000 and stili be comfortably supported by the golf course after the
fifth year of City operation.
Projected Net Cash Flow
Winter Springs Golf Club @ $1 ,2 Million Debt
2007 2008 2009 2010 2011
TOTAL NET REVENUES $960,530 $1,168,870 $1,313.280 $1,410,030 $1,517,720
TOTAL EXPENSES $1 210250 $1 258.660 $1,314.926 $1 365123 $1,427,328
NOI (Before Debt) 1$249 7201 1$87 7901 1$1 6481 $44 807 $80 392
Debt Service
51.2 mm @ 6.5% for 30 years $91,893 $91,893 $91,893 $91,893 $91,893
After Debt Income
(City support required) ($341,613) ($179.683) ($93,539) ($46,986) ($1.501)
Cumulative Shortfall ($341.613) ($521,296) ($614,835) ($661,822) ($663.323)
--
NallonalGOlf FoundaiionConsuiting, h'c~'winier Springs GC. Wirrt;;rSpnngs. Florida - DRAFTREPORT --32
Summary Financial Performance at Higher Debt Loads
If the ultimate purchase price and/or improvement costs for the Win
being higher than the $1.2 million threshold, it is likely that
continuous support for the facility all through the early years
after the five-year stabilization period. Assuming a total debt I
the summary financials of the Winter Springs Golf Club will 10
Projected Net Cash Flow
Winter Springs Golf Club@ $1.7 Million Debt
2007 2008 2009
TOTAL NET REVENUES $960,530 $1,188,870 $1,313,280
TOTAL EXPENSES
NOI (Before Debt)
Debt Service
$1.7 mm @ 6.5% for 30 years
$130,182 $130,182 $130,182
After Debt Income
(City support required)
($379,902) ($217.972) ($131.828)
.........J~.~!..~l!l9.~L...j~~~I,~!.~)lE~..l.?.Q!L J.~814,976)
($85.275)
..fl:!'!l~."-I~jY~~~..(;j.'1f~!1
2010
$1.410,030
$1,385123
$44 907
$130,182
$1,517,720
$1 427328
$90 392
$130.182
($39.790)
($854,767)
TOTAL NET REVENUES
Projected Net Cash Flow
Winter Springs Golf Club @ $2,2 Million Debt
2007 2008 2009
$960,530 $1,168,870 $1,313,280
TOTAL EXPENSES
NOI (Before Debt)
$1.210.250
1$249 7201
$1,314,926
1$1 646\
$1 427,328
$90392
$1.256,660
/$87 7901
Debt Service
$2.2 mm @ 6.5% for 30 yeal'll
$188,470
$188,470
S 168,470
After Oebllncome
(City support required)
($256.260)
($170.117)
~rnlJl~!iy!il ShortfaIL._.m....mm.............. . ...............j~gl~.t!l9.l ($674,451) ($844.568) ($968.131) .._{ll,~6.21QL
($78.079)
($418.190)
2010
$1,410,030
$1,365. 123
$44 907
$168,410
($123.564)
2011
$1,517,720
$188,410
...... .NationaT(ioif,;;iOdatjc;~~C~.~sultingt Inc. - Winter'spnngs GC, Winter 'Sprl'ngs. Florid~":"DRAFT-REPORT - 33
LIMITING CONDITIONS
The income estimates and warranted investment analysis presented
been prepared based on existing and projected market cond
facility and the intended segment of the golf market toward
was paid to the reality of golf supply in the immediate local
have been struggling to generate enough golf rounds to meet
these estimates Include but are not limited to:
t
ular focus
golf facilities
ns. Proper uses of
. Establishing reasonable parameters for value of the subject facility.
. Determining an appropriate level of debt that the facility can support under City of
Winter Springs operation.
. Establishing the basis for financing determinations.
. Providing guidelines for acqUisition cost determinations.
NGF Consulting is confident that the stated financial projections and value estimates can be
achieved at the subject facility. From a practical standpoint, those managing the facility will need
to respond to variable market conditions as well as unforeseen maintenance needs. Due to the
fact that these conditions are more likely to change as the course continues to mature, NGF
Consulting has limited its projections to a five-year period. Nevertheless, we are confident that
the facility will be able to continue to achieve similar results beyond the next five years of
operation.
, , "'Naiional GOlf" Found3iio;;consulting:Tnc~":'"Winter Springs Gc;"winter Springs. Florlda':"O'RAFT REPORT':J:i'
Summary Statement
In summary, NGF Consulting believes that there is demonst
golf in the Winter Springs/Seminole County market. Howeve
several existing golf facilities present in the market to serve
competitive business situation for public golf courses. The e inter Springs GC is
probably not at the quality level that would be necessary to achieve the projections made by
NGF Consulting for this study, and therefore the course should be improved. Winter Springs'
proximity to various key area roadways and the local resident markets should provide
substantial support for the facility after acqUisition and conversion to a municipal golf course.
The local residents appear to be interested in affordable golf. and we expect any new municipal
golf course added in this market will have some form of annual pass or multi-user discount
program. as well as organized league and player development programs. In all, these residents
would become the core market for the long-term future of Winter Springs GC.
The result of this situation is that Ihe Winter Springs GC, if acquired as expected, will be highly
dependent on the facility's ability to create a good quality public golf experience at an affordable
green fee level. This means that appropriate pricing. including a frequent user discount card. will
be necessary for the new facility to distinguish itself and attract adequate play levels from all
market segments. One significant target market segment is the beginner, female, and
family/junior golf segment. which could contribute significant play to the proposed Winter
Springs GC.
NGF Consulting fully expects that well-designed golf courses with good management. expert
maintenance, weil-organized promotion. and good customer service should be able to achieve
the market projections made in this study indicating that the Winter Springs Golf Club should be
able to support a total project investment of about $1.2 million to acquire AND renovate the
facility. With favorable weather conditions. increased desire for new residents to take up the
game of golf. and the continued increases in area tourism, the new Winter Springs golf course
could even outperform the market project.ions made by NGF Consulting.
This number was based primarily on a set of standard financing assumptions that mayor may
not apply to Winter Springs City. Given this circumstance, NGF Consulting is projecting that the
financial performance of the proposed new Winter Springs golf course should be sufficient to
sustain the golf course operation and retire up to $1.2 million in capital costs. Even at the $1.2
million total investment level. NGF Consulting is projecting that the golf courses will lose money
in the first few years after acquisition. This situation is not at all unusual for new municipal golf
facilities built in the 1990's throughout the United States.
"WNatlo(;at GojfFo~ndation"'Co'nsulting. Inc. - Winter Springs Gc:"Winter Springs. Florida - ORAFi'REPO-Rf"::'35
Appendix
(TO BE INCLUDED IN FINAL REPORT)
NaiionaiGotTF-oundatlOnCOnsutti;;g:i;;C:-:"Wlf1ler SpringS Gc:Wiiii;r"Springs, Florida-DRAFT REPORT - 36