2009-04-17 golf course market review

Presentation Fort Sheridan Golf Course Market ReviewPresented to:

The Lake County Forest Preserve DistrictPresented by:

ERA|AECOM

March 17, 2009

Approach Map LCFPD golf rounds by zip code

– Understand geographic distribution of play Review ThunderHawk financial performance

– Rounds, revenue, and expenses– Understand implications

Confirm golf inventories within 25 miles Refine financial analysis for the proposed

Fort Sheridan golf program Understand golf market demand and supply

implications for 2014

Geography of Rounds: Brae Loch

Rounds: Countryside

Rounds: ThunderHawk

High End Golf Opportunity

Geographic Realities

ThunderHawk and Ft. Sheridan share the North Shore high-end market–17% of play originates from zip codes

around Fort Sheridan–8% of play originates from Winnetka,

Wilmette, Kenilworth Limited penetration in Southern WI Significant private competition

Public / Private Golf Supply

Supply / Demand Implications

Private Market Reality–16 18-hole primary market courses –Courses are losing members – driving a

modest shift toward public play–Courses are starting to lower prices

Public / Daily Fee Market Reality–7 18-hole courses in the primary market–Discounting is impacting profitability–Since 2000: 3 18-hole courses closed

2014: Additional golf would be risky

Ft. Sheridan Financial Planning

Effective greens fees–Seasonality / discounting / weather

Cart utilization rates Food & beverage sales Pro shop merchandise sales Implications for Fort Sheridan:

–No driving range / No banquet facility

Perspective – ThunderHawk - 08

Average green fee of $46.88 per round 50% of rounds drive 35% of revenue

– Impact of discounting / specials Peak $69 green fee drives 33% of revenue

on 23% of rounds – July and August Cart utilization is high >90%

– Additional $13 per round, on average Pro shop merchandise sales: $5 / round Food & beverage sales: $10 / round

Fort Sheridan Concept

Stabilized year rounds: 25,000 Prime season weekend rate: $102

–Includes cart –Thunderhawk:$84 w/cart

No driving range income Estimated sales for F&B & pro shop F&B assumes small meetings, outings

and tournaments – No banquets

Business Plan Approach

Assumes LCFPD operation High-end courses are more expensive

to operate: –Player expectations / client service–Maintenance / mowing–Larger marketing budget –ERA: 25% above ThunderHawk

Replacement reserves Grow-in / startup costs need to be

accommodated

Financial Implications

Effective Gross Revenue: $2.3 million Operating expenses: $1.5 million Income before debt: $800,000 Supportable debt service:

–20 Years @ 5%:$10 million Supportable project budget: $12 Million 30-Year financing is possible

–Would require general fund guarantee

Implications - 2014

Public market should stabilize–Begin to see revenue growth –The private market will remain highly

competitive If Fort Sheridan opened in 2014

–$12 million project budget is insufficient A significant impact on ThunderHawk

–15% market shift toward Ft. Sheridan