Kenwood Press

Serving the communities of Kenwood, Glen Ellen and Oakmont

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Guest Editor: 08/01/2018

Oakmont residents should not pay to save Oakmont Golf Club

By Julie Cade and Bruce Bon

In Arizona, a privately owned golf course, which has been losing money since 2007 and risking foreclosure, is adjacent to a senior community. Club supporters use scare tactics to convince neighbors that club failure will lead to declining property values. Residents, most of whom aren’t golfers, agree to raise their homeowners’ dues by 20 percent each year for three years, and then sustain them for another 22 years. Homeowners’ annual HOA fees rise from $1,792 to $3,097 in year three, a 73 percent increase, in order to pay the golf management company.*

Here in Oakmont, a similar scenario is unfolding. Oakmont Golf Club (OGC), an independent, for-profit business with a history of financial instability, is adjacent to (but not financially tied to) a senior community. OGC asks nonprofit Oakmont Village Association (OVA) for a portion of residents’ dues for a minimum of five years. Using one-sided, fear-based meetings, OGC refuses to share much financial information with the Oakmont community. OGC resists suggestions from Oakmont residents of alternatives that might improve their business and not require Oakmont residents to prop them up. Instead of considering alternatives (sell/lease a course for possible other uses, seek a conservation easement, open the courses to other activities for Oakmont residents, and more), OGC insists on keeping things the same.

We know from OCG history, its unstable financial performance, overall declining golf participation, and course closure trends (six percent of U.S. golf courses have closed since 2006; the National Golf Foundation projects 150-175 more closures annually for “several more years”), that OGC in its present form is unsustainable, will be increasingly too costly to keep, and is out of step with the trends affecting golf. Millennials are shunning golf, boomers want different amenities, working people don’t have time for a five-hour game. OGC has lost 50 percent of its equity owners and rounds played are down. Local conditions of drought and the impending groundwater restrictions are looming environmental limitations to the maintenance of two 18-hole courses. With the past and future of golf, funding OGC with OVA dues is a horrible investment for our residents.

Proponents of subsidizing OGC with OVA dues repeatedly claim that five dollars per month per member for five years will solve all of OGC’s problems. Having reviewed OGC’s data, along with their long history of financial distress, we’ve concluded that this claim is deliberately simplistic and misleading. Our analysis predicts that OGC needs at least three to four times that amount of money, and probably much more, indefinitely.

Keep in mind that OGC hasn’t said that five years funding would be enough. They said a five-year commitment was the minimum required from OVA. Any OGC funding commitment is the first step on a long and expensive road for Oakmont residents. If this funding is allowed to happen, increased dues to prop up the OGC, on top of necessary dues increases to improve OVA’s finances and repair/maintain/replace our own facilities, will change the nature and demographics of Oakmont. Many lower-income residents, some who have lived here for up to three decades, would be unable to afford to stay. The OVA board has an ethical obligation to residents who bought here knowing that they did not have to pay for the golf courses (that many of them never, or no longer, use).

OVA’s board and OGC need to pull their heads out of the sand trap and face reality. They can explore creative alternatives now or waste millions in senior citizens’ dollars with nothing to show for it but the inevitable failure of OGC. When that happens, OGC will either sell the courses to a developer (at possibly some minor profit to the 350 equity owners, courtesy of our residents’ dues) or file for bankruptcy. Instead of waiting for the feared blight of abandoned courses, OVA must stop wasting time considering giving money to the OGC. Instead, they should create a contingency fund to expand our options when OGC inevitably fails, rather than giving away residents’ dues, which you can be sure we will never see again. OGC should immediately take steps to reduce 36-holes down to nine or 18, and turn the rest of the land into other uses, such as agriculture, parks, open space, walking trails, and much-needed housing. Being proactive and realistic about OGC’s prospects and focusing on what is the best long-term use of OVA funds can preserve open space and keep some golf without wasting money, increasing community dissension, forcing residents to move and risking legal action against OVA.

OGC is unsustainable in its present form, and it most certainly cannot be saved with “just a little bit” of Oakmont’s money. If the OVA board funds OGC, they are entering us into an unacceptable “pay them now AND pay them later” arrangement. It is this awareness that caused prior boards and Oakmont residents to reject efforts to become financially entangled with OGC. That was a bad idea then, and it’s a worse idea now.

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