Duluth's municipal golf courses are expected to finish 2020 about $100,000 in the hole.
Due to the COVID-19 pandemic and the city's efforts to contain costs, Duluth's Lester Park Golf Course remained closed for the season, and golfers played about 39,000 rounds at the city's only other public golf course, Enger Park, according to Parks and Recreation Manager Jessica Peterson.
That's about 5,000 more rounds than Enger Park hosted last year but 12,400 fewer rounds than the city's two municipal golf courses hosted together in 2019, when Lester Park also was in operation.
While the Enger Park Golf Course was busier than the previous year, Peterson said many tee times there still remained unfilled.
"By consolidating public golf from two courses to one, by no means did we overfill or exceed the capacity at Enger," she said.
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The significant spare capacity at Enger Park made an impression on Jim Filby Williams, Duluth's director of parks, properties and libraries.
"I think this speaks to the scale of the oversupply of public golf in Duluth," he said, noting that one year the two courses hosted 100,000 rounds, and they regularly reported a combined 90-some-thousand rounds per season in the 1990s.
"So, we did see some improvement both in numbers at Enger and in the resulting financial numbers. But there are simply not enough golfers at both courses to fill up all of the slots at one course," Filby Williams said.
Peterson said the $100,000 combined financial loss of Duluth's two municipal golf courses this year bested the $191,000 loss they incurred the previous season.
"That's one of the things that consolidating activities at one course was intended to accomplish is to reduce the city's risk of financial losses at a time of unprecedented budgetary challenges," Filby Williams said, adding that he takes encouragement from seeing, if not for the cost of minimally maintaining the idled Lester Park Golf Course, Enger likely would have broken even or perhaps turned a small profit.
"It kind of showed us a little bit about the sustainability, relatively speaking, of Enger golf if it were a stand-alone," Filby Williams said.
However, after repeated and mounting shortfalls, Duluth Golf's debt to the city's general fund is expect to grow to about $2.8 million by the end of this year. Filby Williams said the city still intends to fulfill a commitment to waive half of that debt to help the municipal golf program get back on firmer financial footing.
Peterson said local golfers were excited and eager to hit the links early this past season at a time when many indoor group activities were considered risky due to the COVID-19 pandemic.
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"We know that it is an activity that has been deemed very safe, and from an operations standpoint, does require additional safety precautions to be put in place," she said. "Our golf management spaced out tee times. They conducted extra sanitation and cleaning of indoor spaces of golf carts. They adapted food and beverage services, pro shop services, instructional services and camps. And they were unable to host outings and events in the way that they typically have in the past."
Peterson noted that the pandemic significantly eroded the course's food and beverage sales in 2020, and those revenues could rebound when and if the outbreak comes under control.
Duluth asked Indigo Golf Partners (formerly Billy Casper Golf), the management firm that oversees the city's golf courses, to run some projections for 2021. They predicted that if Duluth continues to offer golf exclusively at Enger and minimally maintains Lester, the fund will turn a slim profit of about $5,000. But if it tries to reopen both courses, the city can expect a financial loss of about $150,000 next year.
Peterson said a city staff recommendation that will be shared with Duluth city councilors on Monday advises them to stay the course, with Enger operating and Lester again sitting out the season in 2021.
Duluth had issued a request for proposals for the lower portion of the Lester Park Golf Course, in hopes that it might be redeveloped into mixed-income housing. But Filby Williams said the four proposals staff received did not pass muster.
"As a result of the failure to sell real estate at Lester and the impact of the pandemic on city finances, it appears that there is no longer a plausible path by which the city could finance the $7 million estimated cost of minimum necessary renovations at those courses," he said, noting that required improvements would cost about $4 million at Enger and $3 million at a downsized Lester.
Plans to finance that work rested squarely on the city's hopes that it could garner $2 million from the sale of part of Lester and of the driving range at Enger.
In the absence of such a sale, Filby Williams said not only do the improvements at both courses appear out of financial reach but "There's also no clear or certain path to finance minimum necessary renovations just at Enger — renovations that must be completed promptly in order to sustain Duluth's golf tradition."
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"So, in light of that unhappy but stubbornly real mathematical hurdle, the city has determined that it is necessary to re-examine the feasibility of the plan to retain and renew both courses that is in the council-approved long-term plan for Duluth golf," he said. "We are conducting that re-examination now, and we intend to present the results of that re-examination to the Parks Commission Golf Committee and through them to the community in the next couple of months, and to make a final decision about the continued operation of Lester Park Golf Course no later than March."
This story was updated at 10:05 p.m. Nov. 19 correcting the anticipated loss if Duluth were to operate both the Lester and Enger Park golf courses next year. It was originally posted at 8:30 p.m. Nov. 19.
