Golf Courses Could Be on Chopping Block

Faced with its 11th straight year of a budget shortfall, the city of San Jose is considering selling off and/or converting land used by public golf courses to prevent further cuts to libraries and community centers come next summer. Mayor Chuck Reed and other city officials will be holding the first of several community meetings at 6pm Wednesday at the Mayfair Community Center.

While San Jose Municipal is self-sufficient and has no debt to pay off, Los Lagos and Rancho del Pueblo golf courses could be placed on the chopping block due to negative revenue returns to the city and an inability to pay off millions in bonded debt.

According to numbers provided by the mayor’s office, Los Lagos lost $15,480 last year and has $21.2 million in outstanding bonds it will likely never be able to reduce. Rancho del Pueblo reported a loss of $279,965 in 2010-11 and has $5.6 million in bond payments.

Debt service payments made by the city last year for the two courses, respectively, was $1,465,051 and $452,699. The mayor’s office says the $1.9 million in debt service payments could be reallocated to other areas of need. They include:

• At four days/week of operation, the costs for a small, medium, and large branch library are $546,000, $732,000, and $905,000 respectively. Branch libraries serve more than 700 unattended children per day (kids using libraries without a parent or other adult). 
• Costs for a community center start at $600,000 per year. 
• Costs for a fire station are about $2 million per year. 

While some are in favor of selling the courses, Rancho del Pueblo’s Golf Operations Manager, Colleen Henry, says paying off the bond money for the two courses was never an expectation when they were built.

“Going into it, they never anticipated the revenue from the golf course would pay the bond on the land, and the same with Los Lagos,” she said.

“It’s a tough budget call. I don’t begrudge the mayor. They have some tough numbers to crunch.”

Councilmember Xavier Campos, whose district includes Ranch del Pueblo, has said he will fight to keep the course open. He says replacing it with housing development in the area would only increase pollution and traffic congestion.

The course also provides needed recreational activities to a community with few options, Henry said. A study done by the course found that 35 percent of golfers came from within the course’s zip code or adjacent zip codes. And roughly 85 percent of golfers were found to live in San Jose, Henry said.

Also, with cheaper green fees at $10, kids who are just beginning to play the game as well as senior citizens on fixed incomes take advantage of Rancho del Pueblo , which is a shorter, 9-hole course.

“From a customer point of view, the demographics come from all age groups,” Henry said. “They don’t have a lot of access ot golf or other recreational activites in their neighborhood.”

Similar to the city’s pension crisis, which became a problem after the dot-com bust and the recent recession, the city seems to have been overly optimistic in past decisions.

“Now that times are tight the landscape has changed,” Henry said.

Josh Koehn is the news editor for San Jose Inside and Metro Newspaper. Email tips to josh@metronews.com or follow him on Twitter at @Josh_Koehn.

30 Comments

  1. Our lame-brained mayor and councilmembers will likely approve rezoning the properties to residential, thereby adding even more of a financial burden to the SJ budget. 

    Housing doesn’t pay the bills. We need businesses that contribute to the tax base and employ our residents.  Voicing that opinion to the greasy politicians is like pissing in the wind.

    • Maybe we can turn the golf course into a paintball course and all the gang bangers can go shoot each other all day except with paintball guns instead of the real thing.  Wait, some community organization would demand to fund the entry fees for the gangsters, their funds come from city entitlement programs, and those funds come from the taxpayer.  Never mind….

    • Businesses that operate in the black contribute to the tax base and employ our residents.

      These golf courses don’t cover operating expenses and OP managers claim that they never intended to cover the bond repayment is crazy. 

      Xavier Campos is VERY out of touch with his community base if he thinks this is most important issue facing his community.  He has been making the media rounds on this issue but didn’t have much to say about the implosion of MACSA, the community agency HE was the C.O.O. for that has lost funding and drying up resources because of his mismanagment and now families are struggling to find options for after school care, high school programs, senior housing, day care etc.  The MACSA youth center is a virtual ghost town now and crime is on the rise and gang activity spiking but THIS issue, saving money losing golf courses is the first major issues Campos wants to make a stand with?

      At least residential condos/homes will provide property taxes.  Why doesn’t Campos take a stand and advocate for the money to come back to the districts that lose the golf courses?

      I like golf but its a luxury not a necessity.  Libraries, community centers, fire stations are more necessary and serve thousands more than the limited use golf courses.

  2. “It’s a tough budget call. I don’t begrudge the mayor. They have some tough numbers to crunch.”

    It’s not “tough” at all, when you remember that the city’s firing cops and closing libraries. Golf is a luxury item; if someone wants to play they should go to a private course that isn’t a drain on the taxpayers. The city does not subsidize bowling alleys, why should they subsidize golf courses, especially in this horrible economy?

    • Don’t worry the courses will be saved…..the mayor and city manager will be firing/“laying off” over 200 police officers next June to save golf courses/libraries/community centers/A’s baseball stadium/upper managements retirement/etc

      • Listen up duffers!  If you wan to save your golf courses just tell Mayor Reed and The Council that you consider “golf courses” as essential components of “public safety.”

        That is what their constituents did to save funding for the community pools, minimize cuts to public libraries, and all sorts of other non-essential city programs. 

        Mayor Reed, oliverio , liccardo’s stock answer for questions like “why don’t you cut x,y & z and use the savings to prevent you from having to lay off police and fire?”  WAS: “Well I (we) would like to do that but we are hearing from voters that THEY think X, Y & Z contributeare essential to Public Safety. Voters just have a different definition of what ‘public safety’ is.”

        • If those were the arguements put forth to save those treasured services, at the expense of real public safety…AND crime has actually risen across all categories, THEN obviously citizens don’t know what they were talking about AND our leaders clearly don’t understand the mainstream meaning of Public Safety.

        • In point of fact, those WERE indeed the arguments put forth which exchanged 66 police officers for something close to the status quo at libraries, among other non-charter services. Mayor Reed himself was quoted in an earlier post on this blog that citizens considered libraries to play a role in public safety. Never mind that you can’t file a police report at a library. Never mind that a librarian won’t investigate, much less solve a crime. Never mind that a librarian wouldn’t know the first thing about applying laws of arrest, search and siezure or how to deal with a gang member. Never mind that a librarian won’t handle a traffic accident, search for a missing child, make a domestic violence arrest, catch an armed robber, get a destabilized schizophrenic into custody or resolve any of the other hundreds of types of calls for service to which cops get dispatched daily. 

          At any time he was confronted by a citizen spouting that easily-disproved hogwash, the responsible thing to do would have been to point out what I just did in the preceding paragraph and then to emphasize that, as important as libraries might be to a healthy community, their existence is meaningless if people feel that the city is so unsafe that they really don’t want to go out or let their kids go to libraries.

          Unfortunately, by his actions and words, Mayor Reed has proven that he is the farthest thing from responsible, as even a perfunctory examination of his voting record would reveal:

          tax base reductions by voting to convert untold numbers of commercial parcels to residential parcels,

          approval of the construction of thousands of new housing units in a depressed housing market which has had the net result of artificially lowering property values throughout the city,

          adding insult to that particular injury by approving thousands of units of affordable housing, which invariably absorbs far more public safety services than market-rate housing (a concern on which PLO has commented),

          approval of massive transfers of capital from the general fund to the RDA,

          laying off employees and imposing wage/benefit reductions while simultaneously distributing tens of millions of dollars in grant money out of the general fund to services or programs which are of little or no benefit to the city as a whole,

          failure to divest the city of such money-losing ventures as Hayes Mansion, various golf courses, the Mexican Heritage Plaza, and others,

          presiding for the last decade or so over the abject, embarrassing fiscal failure that is the SJ RDA,d of which every city council person and the mayor are board members.

          Hiring and then keeping Debra Figone, a woman who is reputed to be a petty, vindictive, dictatorial manager who could probably do a credible job playing the female version of the Emperor from Star Wars without doing any real ‘acting’ on her part. See the following for all the reasons why she should either be fired or forced to resign: http://www.baycitizen.org/blogs/citizen/san-jose-city-manager-must-go-1/

          No, Mayor Reed is not the responsible leader he and others would like the rest of us to believe, and I’ve merely covered the tip of the iceberg of his irresponsible reprehensible behavior, and the guilt of which most – if not all – of the City Council share at least a large measure. And, at some point, I hope that the effects of the Kool-Aid Mayor Reed has been dispensing will eventually wear off and San Jose’s citizens will wake up and see what a debacle he’s created and try to mend the crumbling ruin he’s set about making of this city.

        • Excellent points!  I was always in the corner of the Mayor.  I still feel he is a “GOOD” person. He has fallen to the powers of the C.M. She controls the city the press and the purse strings.

        • They listed the cost of a fire station at $2mil what would the nearly $2 mil buy in terms of police officers?

          Close the golf courses and rehire some police officers for the district 5 area. 

          Why isn’t Campos fighting for that instead?  I thought he was supposed to be the champion and darling of the unions?

          He’s obviously on the wrong team if he’s fighting for the golf course but had very little to say publically for the cops.

          Put ALL the savings towards police officers and services.

          Let me add my disclaimer now.  I am not a police officer, never have been, am not married or dating one.  I am not a member of the union either.  Just an average district 5 resident who thinks police protection is more important than golf for kids and seniors at money losing rates.  My only bias is that Xavier Campos is a joke of a council person for District 5.  He couldn’t be more incompetent if he actually tried to be.

  3. Funny how we can debate a Golf Coarse and talk about saving the land and building houses, but when it comes to Police and Fire you Cut and Cut and now everyone is in danger! This is not a realazation, This is a Fact! Good God this mayor and Manager need to go. The Citizens need to wake up, HELLO OUT THERE, do you realize what is going on around you? Sad how it will take a Murder or a Structure fire before you realize your services are not there.

  4. The debate about the golf course involves more than just quick money for a financially troubled city.

    One issue, land use, do we need more housing density in this area (which is most likely what a developer is going to want to do if they pay top dollar for land in this down market.)

    Among the many reasons for the SJ budget problems is the jobs/housing mix and the tendency of new housing projects to get approved time and again as we look at isolated projects instead of the big picture and convert industrial and commercial (and now park) land into additional housing when our ratios are already out of wack.

    Another issue, social justice, suggests that the elite sport of golf can be enjoyed by the common man in an affordable way.  I get this one, but don’t totally agree that its worth the cost to all of us to subsidize golf or polo fields or anything like that which involves significant public expense.  But then again, maybe there’s a way to offer more for less with public/private partnerships and having parks and rec services ranging from golf to a riding school/stables and aquatics facilities.  It would be cool to offer access to this stuff for folks from all walks of life at a reasonable price point.  Its also worth looking at public/public partnerships where a troubled (high cost/low performance) service areas can be reworked with a partner like a school or college to get the same or better service for residents at a lower cost.  For example, does Evergreen college have a 9 hole golf course that could be leased for city rec users or jointly operated?  Just brainstorming.

    Last issue for me, public ownership of real property.  It can be leveraged and managed like a prudent investment and yield great returns.  It seems like San Jose has not performed well in terms of leveraging land deals for future public benefit (revenue stream coming in and not going out.)

    Overall, it seems like a good public policy debate and probably deserves serious consideration.  I’d also revisit all the public property portfolio and look for opportunities for long-term benefit (leasing versus selling, etc.)

  5. Another code word for Socialism and the redistribution of wealth.  How about treating golf like any other sports activity in the city.  We have open free parks for baseball, soccer, football, etc.  If the city is going to keep dumping money into it, just make it a city park and open to all.  On the flip side, if you are going to call it an optional luxury, turn it over to private industry and let it sink or swim.

  6. Selling the 2 golf courses get the Mayor and Council a political twofer

    1) More tax money for police budget and other services

    2) City Land to sell to developer campaign contributors and political insiders ( oink, oink ) at low prices now that Redevelopment political piggy ( pigs at trough ) tax money bank is closed

    Only problem is new housing will make future budget deficit deeper Housing taxes are less than cost city services while businesses pay more in taxes that city services cost

    The Council’s motto – “Let next Mayor and Council worry about how to politically balance budget” – is why San Jose has 11 straight years budget deficits

    A Twofer – More Budget Money & Same Political Pigs at Trough – oink, oink

    • Tom,

      Pure and simple, it’s the sleazy, for-sale politicians, the whoring developers and the the slush funds that perpetuate this sort of thing.

      Mark my words, our Mayor and Council will rubber stamp rezoning of the land to residential, thereby adversely impacting our general fund forever.

      • Yes, but it will be under the guise of “creating more (short-term) jobs for a neighborhood in need of more opportunities.”  That will make it A-OK!
        …..
        Reality check though is that most of the trades persons and craft workers will actually live and commute from outside this neighborhood and outside this county.

  7. I’m concerned about the impact that the closing of cheap green fee golf courses like Rancho del Pueblo will have on minorities being able to work on their short game and the subsequent widening of the racial handicap gap.

    I’m therefore calling on city council to convene a roundtable of NAACP, La Raza, DeBug, Joe Di Salvo, et al. so that this issue and alternatives can be explored in depth.  (Raising green fees on corporate jet owners is one idea that immediately comes to mind.)

    Access to cheap green fees is a human right. 
    We can and must do better!

    • Maybe they can have Shirakawa’s muscle in a suit convene the roundtable and give an interview telling us all why golf is the crucial key to saving latino youth. 

      He can make the THEY MIGHT AS WELL PUT A SIGN UP SAYING NO MEXICAN GOLFERS argument that he used with the Wagon Wheel bar dresscode press conference he gave.  Did you miss it?  Its where the chief of staff for the Supervisor whined and cried about the discrimination latinos feel by being told to pull up their pants and not dress in gang attire when out drinking in downtown. 

      Yep, our self-appointed Latino Leader Braintrust in full effect.  LET US DRESS LIKE GANGBANGERS WHEN WE DRINK AND LET US CHEAT THE CITY ON GREEN FEES WHEN WE GOLF.  VIVA AZTLAN!

  8. yes sell the poor courses that no one plays anyway.  Building more housing that we cannot provide services for then watch the blight increase when there is no public safety available.

    Who in the hell wants to buy in San Jose now, then try to find a job here or anywhere else in the valley.  I’m sure you not getting the wealthy to buy here, so just build some more low income housing, I’m sure this will help the crime level.

    This council is so far out of control it is no longer funny or even worth blogging about.  Time to take my pension and move out of this city.  Oh, yeah, I already did!

  9. How dreadful that the City spent over $27M for these courses, and looses over $300k annually for both.  The numbers for RDP are simply astounding, and probably because the course lacks looks awful.  Now I understand the $10 green fees.

    Wonder what the analysis and forecasts looks like that justified pursuing these as a projects?

    • This was not conceived as a capital improvement project. It was a concession to the loyal golfers, many retired on fixed incomes who hung out at the original Thunderbird 21-hole golf course there to play stick ball. It was a social gathering place. But housing development bulldozed it. I don’t play golf. But I knew that it was the only affordable place for beginners that was not booked solid. For the record.

  10. Turn it into a medicinal marijuana field and get some sharecroppers in there to farm. Could set up roadside fruit, I mean medicinal marijuana, stands. Pierluigi Oliverio can oversee the opereations, given his business. Let the RDA fund it, then when it has poor returns Mayor Reed can keep the negative reports from seeing the light of day, like he did with the current projects.

    • Now that’s a sensible idea. However, it should be large scale buildings used for the cities planned “All in one cannabis business’ where sellers must also grow their own supply. Besides, I don’t see anyone with a job wanting to move to King Rd.

    • The driving range there looks like a good spot for a card club to complement your new green vision. Compatible uses and two for one location tax generator! I am sure any progressive psychiatrist would subscribe some medicinal herb to alleviate the pain and loss of appetite from losing the family savings on Pai-Gow.

  11. “Wonder what the analysis and forecasts looks like that justified pursuing these as a projects? “

    There was no real analysis for these political projects just more insider payoffs, deals and profits like Hayes Manseun, Fallon House and dozens of others that wasted taxpayers money

    selling goft courses will screw taxpayers again and make insiders and former politicians richer again

  12. SHEER STUPIDITY!!! WE DONT NEED MORE HOUSING,WE NEED MORE BUSINESS, WE NEED MORE JOBS,WE NEED TO FEEL SAFE. THE PEOPLES HOPES ARE DWINDELING. NO WONDER RESIDENTS & EMPLOYEES ARE LEAVING IN DROVES.HTIS ONCE BEAUTIFUL CITY HAS TURNED INTO A CESSPOOL.THANK YOU MAYOR REED & ALL OF CITY COUNCIL.HOW PROUD YOU MUST BE FOR KILLING THIS CITY