According to a feasibility study commissioned by Save the Lakes, the Lakes Golf Course, under the right management, could realize an annual net income of $254,000 as a golf course.
The study, which was done by an independent consultant, Buddie Johnson, in April and May, was released Wednesday. It states that the annual revenue for the Ahwatukee Lakes Golf Club could be $1.377 million based on a course of that size. The cost to run the course would be $1.123 million, leaving an annual operating income of $254,000.
Projections in the report assume the course would host 50,000 rounds of golf with an 18-hole fee of $38 and an average net rate of $19 per round. Forty percent of rounds played would also need to rent a cart at $13.50 per round. The report also includes some revenue from practice rounds, food and beverage sales and golf shop sales.
Johnson has been involved in the analysis of golf courses since 1969 and is co-author of the book “Analysis and Valuation of Golf Courses and Country Clubs.” In his final determination, Johnson said he believes the golf course is a feasible project and should continue as a course for many years.
The course was closed in May 2013. The owner, Wilson Gee, has stated that the course was not making money and was no longer viable. Neighbors and members of Save the Lakes, a local nonprofit fighting the development of the land, say they believe the course was very profitable in 2006 when Gee and his partners purchased it, but it has become unprofitable because the company has not maintained it properly.
The study took a look at comparable courses in the Phoenix metro area. Rolling Hills in Tempe, for example, has seen an average of 5 percent increase in revenue from green fees and golf car rental in the past two years.
“There is no question that other competitive golf facilities in the subject market area felt the impact of a difficult times beginning in 2007,” the report said. “The three golf courses discussed above all faced these conditions but each found ways to not only secure their facility but to rebound in a successful fashion.”
Johnson said that based on conversations with other golf experts, it would take $1.5 million to revive the course from its current state. The restored value of the course would be $2.309 million but as is, the course is projected to be worth $810,000. The report states that Gee has made a deal with Pulte Homes to purchase the land for $8 million, though that number has not been confirmed by Pulte officials.
If the homebuilder can get 51 percent approval from neighbors, Pulte has plans to build 250 homes on the more than 100 acres.
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