Based on consultant recommendations provided during a Monday evening workshop, it appears the golf course, first purchased by the city in 1994, is destined to close.
Jim Keegan, managing principal of a golf industry consulting firm, provided a grim presentation on the current outlook of Buffalo Valley, based on consumer surveys and financial projections.
“Like we see in the nation, supply exceeds demand across the entire country and it’s exacerbated here within Johnson City. The market is about 20 percent oversupplied with courses,” Keegan said.
“As a result of that, what golf courses do to try to capture revenue is they lower their fees. Ultimately, that causes cash flow losses as we’ve seen, which results in the inability to invest in the infrastructure to create a good experience for the golfer. So it works itself into a death spiral, and as a result, Johnson City is now transferring $622,000 out of the general fund to support golf.”
Dating back to 2006, Johnson City taxpayers have footed over $8.72 million to keep both Buffalo Valley, located in Unicoi County, and Pine Oaks Golf Course operational.
In his survey of Buffalo Valley golfers, Keegan found that over half of Buffalo Valley’s golfers don’t even live within Johnson City’s limits, and those who do benefit from the golf course make an average of $86,866 a year.
According to Keegan, Johnson City’s current business model for golf has no chance to reverse its decline, and continuing the current course of action would result in the city subsidizing its golf courses by at least $500,000 annually. Buffalo Valley by itself is expected to accumulate about $2 million in losses over the next decade.
“While Buffalo Valley is a delightful golf course to play, it’s just economically not viable,” Keegan said.
Based on an action plan formulated by Assistant City Manager Charlie Stahl, who was first tasked with reviewing Buffalo Valley’s feasibility during the last budget session, the golf course will close at the end of business on Dec. 31 if the commission ultimately votes to close it.
“This time frame will be less disruptive to golf course operations,” Stahl wrote in his recommendation. “Temporary staffing is at a low point in December (and) 80 percent of turf maintenance applications occur annually between March and November.”
If commissioners do choose to close it, all of Buffalo Valley’s inventory of products, materials, furnishings, equipment and carts would be transferred to Pine Oaks, and the Purchasing Department will determine if the balance of products could be transferred to other departments or sold as surplus.
Keegan did suggest commissioners begin investing more capital into Pine Oaks, at the tune of around $500,000 for the next five years and then $250,000 each year after. He also recommended the city update its golf website to allow golfers to book tee times.
Stahl recommended transferring one full-time position of store clerk from Buffalo Valley to Pine Oaks, with the cost of the transfer being offset by the elimination of temporary positions at Pine Oaks.
Staffing overall would be reduced from eight full-time positions to 6.5 full-time positions and 50 percent of the turf manager position would be budgeted toward the Parks and Recreation Department. The director of golf position would be eliminated no later than the end of June 30.
“As one who grew up at both of these golf courses and made a career from it, it’s bittersweet. I think we have seen the financial ramifications, and I’m almost certain if (Buffalo Valley) had been inside the confines of the city of Johnson City, it would have been a different situation,” Johnson City Director of Golf Jim Hughes said.
Commissioners implied they would first send out a request for proposal to try and sell the property to a local buyer. Stahl said a few interested parties have contacted him about purchasing the golf course, but they first wanted the commission to act before issuing proposals.
If a local buyer does not purchase it, Stahl suggested the city issue requests for qualifications to eventually retain a national real estate brokerage firm who could then sell it.