Council considers rent reductionThe Superior City Council is considering a rent reduction to maintain the viability of the Nemadji Golf Course.
By: Shelley Nelson, Superior Telegram
The Superior City Council is considering a rent reduction to maintain the viability of the Nemadji Golf Course.
The council will consider reducing the rental payment for the golf course by $30,000 per year, to be reconsidered on an annual basis, to maintain the level of service provided by the management company operating the municipal golf course.
Under the proposed modification to the agreement, the city of Superior would receive $160,000 rent this year and 5 percent of any revenue generated at the golf course that exceeds $1.6 million dollars.
The change in the agreement comes after Mark Carlson addressed concerns about revenue at the golf course with the city’s finance committee.
“We’re down $250,000 and that’s since 2007,” Carlson told the finance committee earlier this month. He said in the last five years, eight golf courses have gone bankrupt and the business model is changing nationwide.
Carlson said he would be willing to pay the $190,000 rental payment agreed to when the city negotiated the contract, but that would come at a price that would impact the golf experience at the Nemadji course.
In 2004, the city changed the business model under which the golf course is managed. Instead of hiring a manager and paying the expenses and collecting revenue generated by golfing, the city negotiated with Carlson and Steve Flagstaff to manage the business and pay rent to the city. The change allowed Carlson to reduce expenses for running the golf course, which was operating at a deficit at the time.
Now, with new golfing opportunities at resorts and casinos in the region, declining attendance and changes in the pro shop and restaurant at the golf course, Carlson said he’s looking for additional ways to cut costs while providing a good experience for golfers.
Carlson told the committee he’s already had to cut expenses in maintaining the course, and he’s planning to eliminate breakfast in the restaurant, he is trying to make rational cuts that will minimize the impact on the city-owned golf courses and those who use it.
“Going forward, it’s going to be difficult in the next five years,” Carlson said. “In terms of people, disposable income is down … junior golf is down 30 percent in the last 10 years … golf is down,” Carlson said.
While revenue has been down, Carlson said increasing the fees golfers pay is not an option when the sport is losing participation and disposable income is down; fees have remained about the same for five years.
With golf course promotions, Carlson said fees are more akin to what they were 15 years ago.
Councilor Dan Olson, a frequent user of the golf course, said he would rather see the city to take in a little less money to take care of the course and retain its viability.
The reduced payment would slow down the pace debt on the golf course is paid, said Finance Director Jean Vito.
Without the reduction, Carlson said the golf course would face some significant cuts.
The council meets at 6:30 p.m. today in Room 201 of the Government Center to consider the proposal.