CITY COUNCIL STAFF REPORT
February 20, 2024 {{section.number}}f
AUTHORIZE THE CITY MANAGER TO EXECUTE A SECOND AMENDMENT TO THE GOLF
PROFESSIONAL AGREEMENT WITH BRIAN SMOCK GOLF FOR THE GOLF CONCESSION
AT THE CORONADO MUNICIPAL GOLF COURSE MODIFYING THE DIVISION OF REVENUE RECOMMENDATION:
Authorize the City Manager to execute a Second Amendment to the Golf Professional Agreement with Brian Smock Golf for the golf concession at the Coronado Municipal Golf Course modifying the division of revenue.
BACKGROUND:
The administration of the Coronado Municipal Golf Course (golf course) involves multiple entities.
The maintenance of the golf course grounds is handled by City of Coronado employees. Brian Smock Golf serves as a contracted concessionaire responsible for pro shop operations, which encompass managing the tee sheet, collecting green fees, handling retail sales, offering driving range services, golf cart rentals, programming, and providing lessons. Feast & Fareway is a contracted concessionaire responsible for the food and beverage aspects of the golf course operations. Both contracted concessionaires and the maintenance employees are overseen by the Recreation & Golf Services Department with the City of Coronado.
Brian Smock Golf (BSG) was awarded the Agreement for Professional Golf Services and has operated the Golf Concession at the Coronado Municipal Golf Course since February 1, 2017. A First Amendment to the contract with BSG was executed April 27, 2021, which modified the promotional and advertising requirements, coordination with the Food and Beverage Concessionaire, driving range equipment specifications, defining appropriate use of City facilities, and exercising the first extension on the term of the Agreement, extending the contract through January 31, 2027.
ANALYSIS:
Changes to the green fees, tournament fees, advanced booking fees, and the inclusion of nocost, resident advanced bookings, which were established by Resolution 2023-41, implemented on January 1, 2024, provided an opportunity to update the division of revenue structure between BSG and the City.
In the initial agreement, the division of revenue, including monetary considerations, is stated as follows:
Concessionaire pays the City of Coronado an amount equal to:
Merchandise: Five Percent (5%)
Non-Merchandise: Twenty Percent (20%)
Lessons: Ten Percent (10%)
The initial agreement also included an incentive provision to help achieve the optimal level of play on the golf course by increasing the number of rounds played and maintaining a high level of customer service. The incentive provision allowed BSG to retain twenty percent (20%) of green fee revenue for up to 10,000 rounds annually over the established base level of golf rounds, which was determined to be 83,512 based on rounds played under the previous concessionaire. The balance and majority of green fee revenue is remitted to the City.
BSG has continued to provide a high level of customer service, elevated pace of play for golfers, and consistently books an average of over 96,000 rounds of golf annually. Additionally, BSG has worked diligently with the City and the community to create and facilitate the recently introduced program to provide free, resident advanced bookings through their software provider.
With the updated golf course fee structure, the proposed Second Amendment to the Agreement for Professional Golf Services introduces changes to the monetary consideration between BSG and the City, as follows:
Concessionaire pays the City an amount equal to:
Merchandise: Five Percent (5%)
Non-Merchandise: Fifteen Percent (15%)
Lessons: Ten Percent (10%)
Advanced Booking Fees: Eighty Percent (80%)
The reduction of the Non-Merchandise remittance to the City and additional revenue from the Advanced Booking Fees would offset the elimination of the incentive provision and provide a slight projected increase in revenue for the concessionaire.
Comparison of Financial Terms: First and Second Amendments Revenue Category First Amendment Proposed
Second
Amendment
Description
Merchandise 5% to City 5% to City Pro Shop merchandise
Non-Merchandise 20% to City 15% to City
Golf cart rentals, driving
range, equipment rental and
storage
Lessons 10% to City 10% to City
Golf Rounds
Incentive
20% to BSG (up to
10,000 rounds
above baseline) N/A
Eliminated in Second
Amendment
Advanced Booking
Fees N/A 80% to City
Added in Second
Amendment
Continued business terms and considerations of the agreement are:
All costs of the concession operations are paid by the concessionaire. Miscellaneous services related to the management of play for which no revenue is accrued is expected of the concessionaire (e.g. Golf Course Marshal, Starters). All revenues from the concessionaire’s operations accrue to the concessionaire.
FISCAL IMPACT:
No budgetary impacts to the Golf Course Enterprise Fund are anticipated with the execution of this amendment.
ALTERNATIVE:
City Council could choose not to approve the second amendment or direct staff to take a different action.
CALIFORNIA ENVIRONMENTAL QUALITY ACT:
Not Applicable.
PUBLIC NOTICE:
No notice required.
ATTACHMENTS:
1. Second Amendment to Agreement for Services: Golf Professional, Brian Smock Golf
2. Agreement for Services: Golf Professional, Brian Smock Golf
3. First Amendment to Agreement for Services: Golf Professional, Brian Smock Golf Submitted By: Recreation and Golf Services Department / Tim Farmer