The Daily Q: How far off course does Trump's golf course deal fly?

The Daily Q: How far off course does Trump’s golf course deal fly?

Posted January 9, 2012 By Alice Brennan

How far off course does Trump’s golf course deal fly?

This week, the city Franchise and Concession Review Committee will vote on an agreement between the city Department of Parks and Recreation and real estate mogul Donald Trump, which will put him in charge of the long-delayed Ferry Point golf course in the Bronx for a 20-year period.

As reported in the Daily News, under the agreement Trump won’t have any financial obligations to the city for the first four years. In the fifth year, he’ll pay $300,000. By year 20, Trump Ferry Point LLC will have to pay 10 percent of its revenue or $470,000.

We want to know: Is Trump’s arrangement with the Parks Department, which the Daily News called a “sweet golf course deal,” that far under par for city golf course franchises? How much do other golf course operators pay and what does the city get in return?

If you have information or insights to share, please comment below, write us, or tweet to @thenyworld.

Update 10:30 a.m.:

According to the Franchise and Concession Review Committee Annual Concession Plan for 2012, the city will receive an estimated $4,869,337 from the operators of 14 golf courses this year.

Top Tee Off: American Golf, a Chicago-based company that operates five golf courses around New York City, will be up for an estimated total of $2,525,000, including $750,000 for Pelham Bay/Split Rock Golf Course.

Bottom Tee Off: An organization that operates the Mosholu Golf Course in the Bronx, Top Tee, will pay about $87,000.

On Tee: The Silver Lake Golf Course in Staten Island is on course to pay $350,000 in annual compensation to the New York City Department of Parks and Recreation.

Update 12:30 p.m.:

The operators of four existing golf courses in the Bronx offer mixed reviews of the Trump deal.

The Van Cortlandt golf course is one of New York City’s oldest and most respected hitting grounds. Its manager, William Larkin, is skeptical about the benefits of a new course. “Having an extra golf course just adds competition for the rest of us,” he told The New York World. “The city is just trying to bail themselves out of a bad situation.” The Trump course has been delayed for more than a decade as a result of environmental problems at the former landfill and escalating costs under the project’s developer, a partnership that included golf champ Jack Nicklaus.

In contrast, the manager of the much smaller 9-hole Mosholu Course, Barry McGlaughlin, thinks a new course would invigorate the sport. “The more people coming to the Bronx to play golf, the better,” he said. “I think the deal, whether Trump gets a concession or not, is a good one for all of us.” Recently, Donald Trump’s foundation contributed $5,000 to a 10th anniversary gala at Mosholu.

Neither Van Cortlandt nor Mosholu were given periods during which they did not have make franchise payments New York City. Larkin says he’s never heard of it happening before. “I hope it’s going to be worth it for them, because four years’ worth of revenue is a lot of lost taxpayer dollars.”

Update 1:13 p.m.:

The Commissioner of the New York City Department of Parks and Recreation, Adrian Benepe, has released a statement to The New York World about the Ferry Point development:

“We are turning a 220-acre landfill into a golf-course, something first requested by the local community 34 years ago, and completing a project begun in the last administration. No matter what, the city was required to cap this landfill, and in fact, building a golf course was the least expensive alternative. After three attempts through a public bid process to find a private operator for the course (the first two RFPs attracted no respondents), the offer from Trump was by far the best. We will have a tournament-quality course for NYC, with the creation of new jobs and two additional community parks. This project has the full support of the local community board and local elected officials.”

Update 4:30 p.m.:

Although Trump appears to be paying less than par in compensation to the city and will get some unique benefits from the arrangement, running a golf course may not be the financial hole-in-one it used to be.

City revenues from publicly owned golf courses have fallen sharply over the last three years. According to Franchise and Concession Review Committee annual concession plans, in 2010 the city was set to earn $8,539,678 in compensation. In 2011, that dropped to $6,198,438 and in 2012 it’s just $4,869,337 for 14 golf courses. Most courses pay concession fees based on a percentage of earnings.

In 2010 and again last year, the franchise committee projected that the Ferry Point development would generate $1.5 million in expected annual compensation. Under the current agreement, Trump could pay as little as $300,000 a year, and in year 20 would owe no more than 10 percent of the tee fees he takes in.

But the fees to the city do not represent the entire picture of Trump’s contributions. The franchise agreement says he has agreed to contribute a minimum $10 million investment in a clubhouse at the site and cover $850,000 in up-front costs.

Whatever Trump pays out it will be significantly less than the city has spent turning the toxic former dump into a green. When the city took over construction in 2008, it had racked up $57 million in expenses related to environmental cleanup. That cost has since escalated to $97 million.

The six-member franchise committee is expected to putt back its decision on Wednesday.

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<h1>The Daily Q: How far off course does Trump’s golf course deal fly?</h1><h3>How far off course does Trump’s golf course deal fly?</h3>
<p><a onclick="javascript:pageTracker._trackPageview('/outgoing/www.thenewyorkworld.com/wp-content/uploads/2012/01/dailyQ2-01.jpg');"  href="http://www.thenewyorkworld.com/wp-content/uploads/2012/01/dailyQ2-01.jpg"><img class="alignleft size-full wp-image-2600" title="dailyQ2-01" src="http://www.thenewyorkworld.com/wp-content/uploads/2012/01/dailyQ2-01.jpg" alt="" width="105" height="105" /></a></p>
<p>This week, the city Franchise and Concession Review Committee will <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.nyc.gov/html/mocs/downloads/pdf/fcrc_agendas/fcrc_meeting_01_11_12.pdf');"  href="http://www.nyc.gov/html/mocs/downloads/pdf/fcrc_agendas/fcrc_meeting_01_11_12.pdf">vote</a> on an agreement between the city Department of Parks and Recreation and real estate mogul Donald Trump, which will put him in charge of the long-delayed Ferry Point golf course in the Bronx for a 20-year period.</p>
<p>As reported in the <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.nydailynews.com/new-york/sweet-golf-deal-donald-free-ride-4-years-public-private-bronx-playpen-article-1.1003115');"  href="http://www.nydailynews.com/new-york/sweet-golf-deal-donald-free-ride-4-years-public-private-bronx-playpen-article-1.1003115">Daily News</a>, under the agreement Trump won’t have any financial obligations to the city for the first four years. In the fifth year, he’ll pay $300,000. By year 20, Trump Ferry Point LLC will have to pay 10 percent of its revenue or $470,000.</p>
<p>We want to know: Is Trump’s arrangement with the Parks Department, which the Daily News called a “sweet golf course deal,” that far under par for city golf course franchises? <strong>How much do other golf course operators pay and what does the city get in return?</strong></p>
<p>If you have information or insights to share, please comment below, <a onclick="javascript:pageTracker._trackPageview('/mailto/nyworld@thenewyorkworld.com');"  href="mailto:nyworld@thenewyorkworld.com">write us</a>, or tweet to @thenyworld.</p>
<h3>Update 10:30 a.m.:</h3>
<p>According to the Franchise and Concession Review Committee <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.nyc.gov/html/mocs/downloads/pdf/fcrc_other/Agency%20Annual%20Concession%20Plan%20for%20Fiscal%20Year%202012%20(Citywide).pdf');"  href="http://www.nyc.gov/html/mocs/downloads/pdf/fcrc_other/Agency%20Annual%20Concession%20Plan%20for%20Fiscal%20Year%202012%20(Citywide).pdf">Annual Concession Plan for 2012</a>, the city will receive an estimated $4,869,337 from the operators of 14 golf courses this year.</p>
<p><strong><span id="more-2572"></span>Top Tee Off: </strong>American Golf, a Chicago-based company that operates five golf courses around New York City, will be up for an estimated total of $2,525,000, including $750,000 for Pelham Bay/Split Rock Golf Course.</p>
<p><strong>Bottom Tee Off:</strong> An organization that operates the Mosholu Golf Course in the Bronx, Top Tee, will pay about $87,000.</p>
<p><strong>On Tee:</strong> The <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.silverlakegolf.com/');"  href="http://www.silverlakegolf.com/">Silver Lake Golf Course</a> in Staten Island is on course to pay $350,000 in annual compensation to the New York City Department of Parks and Recreation.</p>
<p> </p>
<h3>Update 12:30 p.m.:</h3>
<p>The operators of four existing golf courses in the Bronx offer mixed reviews of the Trump deal.</p>
<p>The <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.golfnyc.com/golf/proto/golfnyc/vancortlandt_home/vancortlandt_home.htm');"  href="http://www.golfnyc.com/golf/proto/golfnyc/vancortlandt_home/vancortlandt_home.htm">Van Cortlandt</a> golf course is one of New York City’s oldest and most respected hitting grounds. Its manager, William Larkin, is skeptical about the benefits of a new course. “Having an extra golf course just adds competition for the rest of us,” he told The New York World. “The city is just trying to bail themselves out of a bad situation.” The Trump course has been delayed for more than a decade as a result of <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.citylimits.org/news/article_print.cfm?article_id=2574');"  href="http://www.citylimits.org/news/article_print.cfm?article_id=2574">environmental problems</a> at the former landfill and <a onclick="javascript:pageTracker._trackPageview('/outgoing/www.nydailynews.com/archives/news/big-golf-mess-suits-mob-tee-costs-soar-charges-dirt-fly-bronx-article-1.641404');"  href="http://www.nydailynews.com/archives/news/big-golf-mess-suits-mob-tee-costs-soar-charges-dirt-fly-bronx-article-1.641404">escalating costs</a> under the project’s developer, a partnership that included golf champ Jack Nicklaus.</p>
<p>In contrast, the manager of the much smaller 9-hole Mosholu Course, Barry McGlaughlin, thinks a new course would invigorate the sport. “The more people coming to the Bronx to play golf, the better,” he said. “I think the deal, whether Trump gets a concession or not, is a good one for all of us.” Recently, Donald Trump’s foundation contributed $5,000 to a 10th anniversary gala at Mosholu.</p>
<p>Neither Van Cortlandt nor Mosholu were given periods during which they did not have make franchise payments New York City. Larkin says he’s never heard of it happening before. “I hope it’s going to be worth it for them, because four years’ worth of revenue is a lot of lost taxpayer dollars.”</p>
<h3></h3>
<h3>Update 1:13 p.m.:</h3>
<p>The Commissioner of the New York City Department of Parks and Recreation, Adrian Benepe, has released a statement to The New York World about the Ferry Point development:</p>
<p>“We are turning a 220-acre landfill into a golf-course, something first requested by the local community 34 years ago, and completing a project begun in the last administration. No matter what, the city was required to cap this landfill, and in fact, building a golf course was the least expensive alternative. After three attempts through a public bid process to find a private operator for the course (the first two RFPs attracted no respondents), the offer from Trump was by far the best. We will have a tournament-quality course for NYC, with the creation of new jobs and two additional community parks.  This project has the full support of the local community board and local elected officials.”</p>
<p> </p>
<h3>Update 4:30 p.m.:</h3>
<p>Although Trump appears to be paying less than par in compensation to the city and will get some unique benefits from the arrangement, running a golf course may not be the financial hole-in-one it used to be.</p>
<p>City revenues from publicly owned golf courses have fallen sharply over the last three years. According to Franchise and Concession Review Committee annual concession plans, in 2010 the city was set to earn $8,539,678 in compensation. In 2011, that dropped to $6,198,438 and in 2012 it’s just $4,869,337 for 14 golf courses. Most courses pay concession fees based on a percentage of earnings.</p>
<p>In 2010 and again last year, the franchise committee projected that the Ferry Point development would generate $1.5 million in expected annual compensation. Under the current agreement, Trump could pay as little as $300,000 a year, and in year 20 would owe no more than 10 percent of the tee fees he takes in.</p>
<p>But the fees to the city do not represent the entire picture of Trump’s contributions. The franchise agreement says he has agreed to contribute a minimum $10 million investment in a clubhouse at the site and cover $850,000 in up-front costs.</p>
<p>Whatever Trump pays out it will be significantly less than the city has spent turning the toxic former dump into a green. When the city took over construction in 2008, it had racked up $57 million in expenses related to environmental cleanup. That cost has since escalated to $97 million.</p>
<p>The six-member franchise committee is expected to putt back its decision on Wednesday.</p>
<p> </p>

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The Daily Q: How far off course does Trump’s golf course deal fly?