Special Council Meeting Agenda

Wednesday, February 1, 2017 9:00 AM City Hall Council Chamber

The Indian Wells City Council welcomes and encourages participation at City Council meetings. The Council requests speakers present their remarks in a respectful manner, within the 3 minute time limit, and focus on issues which directly affect the City or which are within the subject jurisdiction of the City. Please fill out a blue Speaker Request form and give it to the City Clerk, preferably before the start of the meeting.

Any public records, relating to an open session agenda item, that is distributed within 72 hours of the meeting is available for public inspection at City Hall reception, 44-950 Eldorado Drive, Indian Wells during normal business hours.

1 Special Council Meeting Agenda February 1, 2017

1. CONVENE THE CITY COUNCIL, PLEDGE OF ALLEGIANCE AND ROLL CALL

MAYOR RICHARD BALOCCO MAYOR PRO TEM KIMBERLY MUZIK COUNCIL MEMBER TED MERTENS COUNCIL MEMBER TY PEABODY COUNCIL MEMBER DANA REED

2. APPROVAL OF THE FINAL AGENDA

3. PUBLIC COMMENTS

The Council requests speakers present their remarks in a respectful manner, within the 3 minutes time limit, and focus on issues which directly affect the City or which are within the subject jurisdiction of the City. The Mayor will call upon the members of the public to address the Council. When you're called please come forward to the podium, and state your name for the record.

The Brown Act, with certain exceptions, does not permit the Council to discuss or take action on issues not listed on the agenda. The Council may respond briefly to statements made or questions posed, request clarification, or refer the item to Staff.

A. PUBLIC COMMENTS

B. RESPONSE TO PRIOR PUBLIC COMMENTS

4. GENERAL BUSINESS

The Mayor will call upon the members of the public to address the Council regarding the agenda item being considered. After the public has provided comment, the item is closed to further comment and brought to the Council for discussion and action. Public comments are limited to 3 minutes per speaker, please state your name for the record.

2 Page 2 Special Council Meeting Agenda February 1, 2017

A. 023-17 5-Year Strategic Plan for Indian Wells Golf Resort

RECOMMENDED ACTIONS:

Council DISCUSSES and provides DIRECTION to staff relating to operational policies for the Indian Wells Golf Resort; and

Council DISCUSSES and provides DIRECTION, and if Council desires act on the following action plans, including without limitation the following:

· Defining “first class” experience; · Reducing expenses at IWGR by $300,000 while maintaining the “first class” experience; · Council created Scenario #9 to manage resident golf tee times January through April; · Increase the resident golf rate from $35 to $55 from December through April of each year hereafter; · Charge for two categories of Resident Benefit Cards: golf included - $80; golf not included - $20; · Determine the City General Fund subsidy, if any, to IWGR; and · Provide direction for next steps on entertainment venues; and

RECEIVES and FILES the IWGR FY 2015-17 strategic plan update.

Attachments: Scenario #9 FY 2015-17 Strategic Plan Update September 27, 2016 Golf Advisory Committee Notes IWGR Cafe SWOT First class definition Scenario #3 Scenario #6 NGF Report

B. 024-17 Introduction to Strategic Planning

5. ADJOURNMENT

To a special Strategic Planning session of the City Council to be held at 9:00 a.m. on February 2, 2017 at the Indian Wells Golf Resort, Celebrity Ballroom.

3 Page 3 Special Council Meeting Agenda February 1, 2017

In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the Chief Deputy City Clerk at (760) 346-2489. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. 128 CFR 35.102.35.104 ADA Title III Affidavit of Posting and Notice

I, Anna Grandys, certify that on January 27, 2017, I caused to be posted and served upon all members of the City Council, a notice of a City Council Special Meeting to be held on February 1, 2017 at 9:00 a.m. in the City Hall Council Chambers Notices were posted at Indian Wells Civic Center, Village I [Ralph's], and Indian Wells Plaza [Indian Wells Chamber of Commerce], and were delivered to all City Council members.

______Anna Grandys City Clerk

4 Page 4 Special Council Meeting Agenda February 1, 2017

5 Page 5 44-950 Eldorado Drive, City of Indian Wells Indian Wells

2/1/2017

File #: 023-17 Item #: A.

Indian Wells City Council Goals for Fiscal Year 2017-19: February 1, 2017

5-Year Strategic Plan for Indian Wells Golf Resort

RECOMMENDED ACTIONS:

Council DISCUSSES and provides DIRECTION to staff relating to operational policies for the Indian Wells Golf Resort; and

Council DISCUSSES and provides DIRECTION, and if Council desires act on the following action plans, including without limitation the following:

RECEIVES and FILES the IWGR FY 2015-17 strategic plan update.

DISCUSSION:

June 30, 2016 - City Council

The City Council adopted a 5-Year Strategic Plan for Indian Wells Golf Resort (IWGR), June 30 2016. The plan

City of Indian Wells Page 1 of 6 Printed on 1/27/2017 powered by Legistar™6 File #: 023-17 Item #: A. was a result of the City’s strategic planning effort and the information developed in the 10-year financial strategy. The financial strategy forecasted continuous losses in the Golf fund and showed the City overall expenses beginning to exceed revenues in 2022.

The Council adopted Brand and Position Statement for each operating segment of the IWGR. These statements help define the City’s expectations of “first class”. The Council goal for the Golf Resort was for IWGR to become self-sustaining after capital expenses within 18 months. Action plans for all business segments of IWGR were adopted. The Council asked for additional information in some areas including the details of proposed improvement to the Pavilion. A feasibility study was authorized to consider entertainment uses for the driving range and other possible revenue generators. The Council developed a plan entitled Scenario #9 (Attachment 1) which was a change to the tee sheet allocation for January through April.

The attached FY 2015-17 Strategic Plan update (Attachment 2) summarizes the progress on the action plans approved by Council. Most initiatives are well underway. Progress has been good in most areas with VUE total covers up 4,159 and resident covers up 1,069. Revenues are up at VUE by $118,669. Golf revenues are up $97,138 while rounds are down 480. The new stay and play package is showing success with 419 hotel rounds booked since September. There are portions of the IWGR strategic plan yet to be approved.

August 11, 2016 - City Council

The Council placed a ballot measure on the November election to raise the Transient Occupancy Tax (TOT) and direct it to IWGR. The Council discussed that the measure would reduce the need to take other steps to deal with the deficit at IWGR.

The ballot language was:

“To maintain Indian Wells Golf Resort long-term financial stability, shall the Indian Wells Municipal Code be amended to increase the Transient Occupancy (Hotel) Tax rate from 11.25% to 12.25% of rent charged for transient occupancy of any hotel room or similar lodging, with the 1% rate increase generating an estimated $630,000 annually that will specifically fund the operations, maintenance, and improvement of the Golf Resort, until ended by voters?”

September 15, 2016 - City Council

The City Council met to discuss improvements to the Pavilion, additional entertainment venues and changes to resident amenities, including Scenario #9. Council approved the Pavilion improvements. The feasibility study for entertainment venues was underway, and the resident amenities discussion was tabled pending the outcome of the November ballot measure regarding the TOT to be directed to IWGR.

September 27, 2016 - Golf Advisory Committee

The Committee discussed hopes for 2017 which are included in the notes (Attachment 3). The Committee

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October 25, 2016 - Golf Advisory Committee

The Committee developed Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of the Café area. The Committee favored improving the café into a “19th hole” concept. The SWOT would be provided to City Council during strategic planning (Attachment 4).

November 8, 2016

The TOT measure failed with a vote of 58% in favor and 41% opposed. The measure needed 66.6% to pass.

December 27, 2016 - Golf Advisory Committee

The Committee reviewed and discussed several of Council Member Peabody’s proposals to reduce expenditures and increase revenue at the IWGR. The Committee had diverse opinions and a spirited discussion. Generally, the Committee opposed changing the $35 resident golf rate. Instead, the Committee was more open to limiting resident play and came to a consensus on Scenario #9 with the following modifications:

· Add Desert Trip weekends to limited resident play · Add Friday and Saturday of Thanksgiving weekend to limited resident play · Add December 26-31 to limited resident play · Eliminate April so the limited time would be between January 1 and March 31.

The Committee discussed charging for Resident Benefits Cards; there was general support for this proposal. One of the expressed reasons to support the card fee was that it was equal for all participants and did not single out golfers. The Committee also supported Council Member Peabody’s proposal to reduce cost of sales and labor.

January 5, 2017 - City Council

Because the TOT measure failed, Council Member Peabody requested a study session to discuss expenditure reductions and revenue increases to cover the shortfall from the Golf fund and overall City funds to prevent the long term negative financial picture.

The Council agreed to amend the goal of the Five Year Strategic Plan to “IWGR will break even before capital in the 2017-18 fiscal year.” The Council discussed a variety of opportunities in addition to the action plans already in progress, including:

· Defining “first class” experience

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· Reducing expenses at IWGR by $300,000 while maintaining the “first class” experience

· Changing the Resident Golf Rate

· Charging for the Resident Benefit Card

· Changing or eliminating the Resident Guest Golf Rate

· City General Fund subsidizing IWGR for the resident amenity or other losses

· Limiting the number of rounds a resident could play.

January 24, 2017 - Golf Advisory Committee

The Committee reviewed the City Council’s January 5th study session and discussed Scenario #9 in comparison with increased resident golf rates and charging for the Resident Benefit Card. While the Committee previously favored Scenario #9, at this meeting they supported an increase to the resident golf rate to $55 and charging for the Resident Benefit Card in a two-tiered rate for golfers and non-golfers. The rates recommended were $80 and $20 respectively.

The Committee also reviewed two cost saving suggestions from Troon. The Committee supported the suggestion to stop over seeding the rough on the courses, but did not support a suggestion to modify operating hours in the summer, which would allow the golf operations to be closed in the afternoon. The Committee discussed the resident guest golf rate and recommended that this be considered after the results of the efforts underway are known.

February 1, 2017

Council will review the progress on action plans underway and provide direction on which options to implement to bring IWGR to break even before capital in FY 2017-18. Over the past year, Staff and Troon have provided numerous scenarios to lead IWGR to a position to either make a profit, break even or continue requiring subsidy from the General Fund. Below are various options the Council has discussed, with estimated financial implications.

· Define “first class” experience. Troon provided further definition in Attachment 5.

· Reduce expenses at IWGR by $300,000. Troon will present savings plans at the strategic planning session.

· Alternative scenarios of resident play:

o Council created Scenario #9 - potential revenue $320,586. Scenario #9 restricts resident golf tee times January through April on one course prior to 12:00pm. At 24 hours in advance, all unreserved times are released and available for resident play. The description of Scenario #9 is

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provided in Attachment 1.

o Golf Advisory Committee modified Scenario #9 - potential revenue $309,770. This scenario is an amendment of the Council scenario, limiting the restriction to January through March, but adding Desert Trip weekends, Friday and Saturday of the Thanksgiving week, and the week between Christmas and New Year’s.

o Troon recommended Scenario #3 to break even - potential revenue $690,274. This scenario restricts resident play on both courses before 12:00pm November through April. Additionally, the resident rate of $35 stays in place. The description of Scenario #3 is provided Attachment 6.

o Troon recommended Scenario #6 to create a profit - potential revenue $1,027,351. This scenario changes the resident booking window to 24 hours November to April. Additionally, the resident rate of $35 stays in place. The description of Scenario #6 is provided Attachment 7.

· Increase the resident golf rate from $35 to $55 from January through April of each year hereafter. Based on the play January through April of 2016, additional revenue is estimated to be $175,240.

· Charge for two categories of Resident Benefit Cards: golf included - $80; golf not included - $20. Based on the 5,988 Resident Benefit Cards issued in 2016, potential revenue is $214,680 ($126,560 - golf; $88,120 - non-golf).

· Determine the City General Fund subsidy, if any, to IWGR. This scenario assumes the City subsidizes the difference between the resident rate and the cost of a round of golf. In 2015-16, there were 16,273 resident rounds and the cost of a round of golf to IWGR was $78.08. Based on these numbers, the General Fund subsidy to IWGR would be $701,040 at the current $35 resident rate. Assuming a $55 resident rate January through April (8,762 golfers), the subsidy would be $525,801.

· Provide direction for next steps on entertainment venues. The NGF report analyzing entertainment uses at IWGR is Attachment 8. NGF will make a presentation at the strategic planning session.

Other Discussion Items.

· Kitchen/Celebrity Ballroom Remodel. Does the Council want to investigate a remodel of the kitchen and Celebrity Ballroom area that would open the ballroom to the front views of the building and increase the size of the kitchen? This concept was suggested by Troon.

· Café Redesign. Does the Council want to investigate a redesign of the café to a “19th hole” concept as proposed by the Golf Advisory Committee?

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FISCAL IMPACT:

There is no fiscal impact related to the City Goals update. However, each goal may have an individual fiscal impact, which is reviewed when that goal is brought for Council action.

ATTACHMENTS:

1. Scenario #9

2. FY 2015-17 Strategic Plan Update

3. September 27, 2016 Golf Advisory Committee Notes

4. IWGR Café SWOT

5. First class definition

6. Scenario #3

7. Scenario #6

8. NGF report

City of Indian Wells Page 6 of 6 Printed on 1/27/2017 powered by Legistar™11 Scenario #9

 Resident Play limited to after 12:00 p.m. on one course from January through April  Replacing 75% of rounds at a higher rate will generate approximately $320,586 to bottom line • Limited play will alternate between the Player Golf Course and Celebrity on a monthly basis • Residents can book any remaining tee times before 12:00 p.m. at the 24-hour booking window. • No tee times (before 12:00 p.m.) will be sold at a rate below the A.D.R. (Average Daily Rate) calculated without the Resident/Resident Guest Rate included. Minimum ADR is $100 Jan – April for tee times before 12:00 p.m. • Residents will retain the current allocation tee times on the second golf course.

Subtract R & January February March April Totals RG Revenue

Resident Rounds Replaced 1177 1196 1688 1258 5319 $252,401 Average Daily Rate excluding Resident and Resident Guest Rounds $ 128.11 $ 141.15 $ 135.33 $ 112.95 Revenue from 75% replaced Resident Rounds $113,113 $126,651 $171,338 $106,532 $517,635 $265,234 Average Daily Rate including Resident and Resident Guest Rounds $ 84.79 $ 98.65 $ 86.10 $ 77.99 Revenue generated from 24-hour booking window $ 11,978 $ 14,163 $ 17,441 $ 11,769 $ 55,352 $ 55,352 Total Revenues $125,091 $140,814 $188,779 $118,302 $572,986 $320,586

Attachment #1 12 FY 2015-17 Goal 6: 5-Year Strategic Plan for Indian Wells Golf Resort

Co-Champions: Wade McKinney, City Manager Kevin McCarthy, Finance Director Nancy Samuelson, Marketing/Community Relations Director

Desired Outcomes: The Indian Wells Golf Resort to be self-sustaining after capital expenses within 18 months considering the parameters set by the City Council.

Action Items

1. Increase Beverage Cart Revenue In Progress 2. Increase Café Revenue In Progress 3. Increase Catering, Banquet and Meeting Revenue Pending 4. Increase Golf Revenue In Progress 5. Increase Merchandise Revenue In Progress 6. Increase Revenue at VUE Grille, VUE Bar and VUE Sushi In Progress 7. Increase Revenue with Creation of “Entertainment” Venue Pending

Attachment #2 13 Cost Estimate Stage of Progress Priority

Budgeted in FY 2015-16: Planning Stage& Top None Implementation

1. Increase Beverage Cart Revenue In Progress

Actions Steps a. Implementation of hand-held credit card machines

Hand-held credit card machines implemented on all beverage Status: carts 9/30/16. b. Implement call button on GPS screen to call carts – 9/1/16

Call button feature is being installed on new golf cart fleet and Status: will be complete on 11/1/16. c. Implement new menu

Status: New menu rolled out 7/1/16.

• Goal: 7% annual gross revenue increase for FY 2016/17. Metrics: o Second Quarter Status: 10.98% increase over prior year.

14 2. Increase Café revenue In Progress

Actions Steps a. Implement signage to direct traffic to the Café

Status: Installed signage directing guests to the Café 9/1/16. b. Implement new menu

Status: New menu rolled out 7/1/16. c. Add coffee station

Status: Coffee station installed 9/1/16. d. Add BBQ on weekends on the Players Course

Conducted a trial run first quarter. Will resume as season Status: progresses. • Goal: Increase annual gross revenue by 10% o Second Quarter Status: 1.71% increase. • Reduce annual Cost of Sales (C.O.S.) by 2% Metrics: o Second Quarter Status: reduced costs of sales by 8.05%. • Increase annual Average Daily Rate (ADR) by $0.25. o Second Quarter Status: $0.41 increase.

15 3. Increase Catering, Banquet and Pending Meeting revenue

Actions Steps a. Evaluate catering pricing to competition

Status: Evaluation of catering pricing complete 9/15/16. b. Improve front of Fairway Grill

Improvements approved by Council 9/15/16. Construction Status: planned Summer 2017. c. Improve Pavilion floor

Improvements approved by Council 9/15/16. Construction Status: planned April 15, 2017. d. Construct air baffle

Construction approved by Council 9/15/16. Construction planned Status: Summer 2017. e. Install sun shades

Installation approved by Council 9/15/16. Construction planned Status: Summer 2017. f. Install draping to back wall

Installation approved by Council 9/15/16. Construction planned Status: Summer 2017. g. Construct green room

Construction approved by Council 9/15/16. Construction planned Status: Summer 2017. • Metrics: Increase Banquet revenue by 5% o Second Quarter Status: 16.04% increase. 16 • Increase weddings by 10 per year (beginning FY 2017/18) and then five per year on year after that o Second Quarter Status: Same as prior year (29).

4. Increase Golf Revenue In Progress

Actions Steps a. Implement Stay & Play software

Implementation completed 8/15/16. Software final test stage Status: complete 11/1/16. Through December 2016, 429 new rounds have been booked using the software. b. Implement tree placement from architect Clive Clark

Status: Tree placement completed 9/30/16. c. Implement #3 color placement from architect Clive Clark

Status: All plants ordered 9/30/16. Installed 10/3/16. d. Complete #7 bunker renovation from architect Clive Clark

Status: Bunker renovation complete 9/30/16. e. Consider Council’s Resident Amenity Scenario #9

Scenario was presented to Council on 9/15/16, was discussed Status: 1/5/17 and placed on the 2/1/17 agenda. f. Create additional resident benefit for early booking

Presented to Council 9/15/16. Next steps to be reviewed on Status: 2/1/17. 17 • Increase annual Average Daily Rate (ADR) by $2.00 year over year o Second Quarter Status: $4.47 increase • Increase annual Hotel Resort rounds o Second Quarter Status: Up 52 Rounds Metrics: • Grow annual IW 10 Play Card/ Troon Rewards o Cards are sold by season: Summer, Winter and Fall. 90 Winter Cards have been sold as of January 23, 2017. Winter Card sales end January 31, 2017. • Increase annual total golf revenue o Second Quarter Status: $97,138 increase.

5. Increase Merchandise Revenue In Progress

Actions Steps a. Modify existing and implement new displays

Fountain was removed and fixtures were ordered. Completed Status: 11/1/16. b. Develop Group Retail online store with third party vendor.

Status: Online store developed 8/1/16. c. Reduce number of vendors; increase amounts of selection.

Status: Completed 11/1/16. d. Create policy of opening gift shop on Resident Event nights.

Status: Policy in effect.

18 • Continue to win Top 100 golf shop in the US o Awarded The Association of Golf Merchandisers’ 2017 AGM Platinum Award for Top 100 Golf Shops in the US • Increase annual retail Average Daily Rate (ADR) by $0.25 o Second Quarter Status: $0.64 increase • Decrease annual Cost of Sales (C.O.S.) sold by 1% Second Quarter Status: Increased C.O.S. by 3.88% Metrics: o • Increase inventory turns from 1.3 to 2 per year o Second Quarter Status: Turn Rate is 1.14. • Increase $1.00 per tournament round in Merchandise through third party sales o Second Quarter Status: $0.08 decrease per tournament round from prior year. Group Rounds are down 12. Group Merchandise Revenue is up $4,520.

6. Increase Revenue at VUE Grille, VUE Bar, Pending and VUE Sushi In Progress

Actions Steps a. Add new signage and photos

Status: Signs and photos installed 8/31/16. b. Increase staffing ratios

Increased staffing ratio from 1 server per 50 covers to 1 server Status: per 30 covers. c. Implement a policy of monthly server meetings

19 Status: Policy implemented. d. Implement a 10-day server training program

Program implemented. Training first occurred in September Status: 2016 and continues as staffing requires. e. Add salt and pepper shakers

Status: Shakers have been added. f. Add placemats at VUE Bar

Status: Placements added at VUE Bar 8/15/16. g. Provide laminated happy hour cards

Status: Laminated Happy Hour cards now available. h. Relaunch the menu at VUE Grille and VUE Bar

Status: Menu relaunch occurred 7/1/16.

• Reduce annual food cost by 3% o Second Quarter Status: 4.79% decrease • Increase annual VUE Average Daily Rate (ADR) per check by $2.00 Second Quarter Status: $0.15 increase Metrics: o • Increase annual VUE Reward holders by 25% o Second Quarter Status: New program implemented in August 2016. Currently 1,200 members. • Increase annual Total Revenue o Second Quarter Status: $118,669 increase.

20 7. Create a central “entertainment” venue Pending to increase total revenue at the Golf Resort

Actions Steps a. Research funding options – 9/15/16

Status: TBD b. Define the options for entertainment attractions

Status: Rolled into consultants’ scope of work to present in February. c. Review report on range enhancements with Council

Status: Rolled into consultants’ scope of work to present in February. d. Investigate campus shuttle service

Status: Rolled into consultants’ scope of work to present in February.

• Increase annual Food & Beverage revenue by 2% Metrics: o Second Quarter Status: 11.79% increase.

21 Golf Resort Advisory Committee Notes 9-27-16

Committee Hopes for IWGR • Become profitable • New development attracting people to the Campus • Become self-sustaining (mentioned 3 times) • Maintain an excellent amenity • Continue to be the top club in the Valley and So. Cal. • Invest smartly • Remain current and be relevant to the next generation • Unify the Resort with the campus and City • Elevate the brand • Be fresh and innovative • Committee members more engaged • Committee more relevant • Become a recreational campus • Make the Resort even more desirable

What is most important to concentrate on? • Improvements need to be a differentiator. • Need to protect what we have • Long term building plan (should have a plan for the downstairs area) • Better connections to the community • Better way to get golfers upstairs

Comments • The new menus bring more resident covers.

Attachment #3 22 IWGR – Café SWOT

SWOT Analysis 10-25-2016

STRENGTHS WEAKNESSES

• Covers 50% of needs • Afterthought – not good use of space • Helps Celebrity Course • Not known • Location • Inefficient design/ layout • Covers basic need • Not a natural flow for golfers • Beauty • Hidden by staircase • Friendly staff • No grill • Windows to outside • Accessibility • Display is organized • Could be more than a snack bar • Traffic flow • Identity/ image • View • Location • Good coffee/ cold beer • Ambiance • No street appeal • Design restricts use • Doesn’t attract golfers

OPPORTUNITIES THREATS

• 19th hole experience – bar destination • Cannibalization of VUE • Gathering place • Cost • Patio use • Throwing good money after bad • Micro brewery • Does the location work? • Open Air BBQ • Price point • Monetize putting range • Ambiance • Place to go for hotel guests • Impact to Brand • Engage/ capture golfers more • View • Getting it done right • Differentiator

THEMES

• Think… o Morning o Afternoon o Night • Energy • Specialty – brewery, scotch, cigar lounge • Utilize inside and outside

Attachment #4 23 Indian Wells Golf Resort

February 1, 2017

“First Class”- top-of-market characteristics in terms of conditioning and service levels. Not the best but exceeds the competition set in the market.

The following below is an outline/overview of the operations, systems, and staffing by area for the Indian Wells Golf Resort.

GOLF

• The overall Professionalism, tenure, years of experience, and quality of overall staff is far superior in all areas of the Indian Wells Golf Resort then that of our current competitive set. Turnover is minimal in key areas and that results in CONSISTANCY, and less train time which all has a cost factor. • The overall look, condition, customer service, product quality far exceeds any competitive set in this market. • It all starts with the entrance, water fall, and landscape of the entry lot areas, then Valet service • High touch customer facing staff on the front drive doing bag handling from the front to the club cleaning on the landing to loading in your car upon departure. • Ranger for every nine holes. Keeping pace of play on track and keeping everyone safe as well as pointers from a quality seasoned staff. • Golf shop staffed with “Golf professionals” behind the desk who are able to talk about the course and not just take reservations or cash and check in. Teaching bays with club fitting by skilled professionals, shoe service staff. • Director of Golf and Head Golf Professional leading a $6M plus golf division. • Fleet mechanic along with detail car washer maintaining 160 car fleet, along with marshal cars, and staff cars. This insures no delays in repairs, a well maintained fleet, reduced costs of R&M on cars. • Top of the line GPS systems on cars. Towels and ice chests filled for play. Top notch quality cars, with custom wheels, custom seats, custom paint, and logo reflecting the quality of Indian Wells. • First class golf shop lead by a Merchandise manager with top notch skill set for buying and maintaining a shop that yields over $1.3 M in top line revenues as well as Award winning! • Golf is open from Sun up 6AM- 6PM daily seven days a week 365 days a year. • Golf Shop is open 6AM- 6PM daily seven days a week 365 days a year.

Attachment #5 24

General and Administrative

• Three full time sales staff lead by a Director of Sales and Marketing responsible for yielding over $13M in overall total top line sales at the golf Resort • Concierge at the front desk meeting and greeting, as well as directional guidance every day. • Five Golf concierge staffed at the hotel resorts assisting guests and making golf reservations • Two full time accounting bodies account for all GAP standards, receivables, and payables, capital and cash handling for the entire resort. • One GM and one HR director over seeing over 225 staff members for the entire resort and all liability associated with employment law and Calif. State laws as well as guest quality, and safety.

AGRONOMY

• A director of Agronomy with two asst. superintendents that leads a team of 44 staff covering over 400+ acres and 36 holes of golf with significant care and maintenance that is Award winning and in the TOP 30 in California. • Overall course ascetics- scenic as well as degree of difficulty which lends itself to increased labor standards to maintain. Bunker details far more intricate than other courses as well as increased plant materials and wall to wall green all year. • Agronomic standards (Award winning) far superior with Troon specific standards (i.e. ratio of seed and turf health), getting out in front of all play as to not disturb golfers. • Abundant landscaping to care for 400+ acres with considerable flowers to maintain and “Wall to Wall” Green.

BUILDING

• A facility manager with a staff of four that maintains a 55,000 sq. ft. very high end building and out buildings including the Pavilion. Housekeeping staff of three falls under his supervision as well. • Lobby attendant(housekeeping) to maintain 55,000 square feet of a very high end building constantly seven days a week. Cloth hand towels stocked and folded all day every day in all restrooms. Materials of flooring and walls call for intense amounts of care and oversight with Golf traffic and sheer numbers of guests.

FOOD & BEVERAGE

• A food and Beverage Director and asst. who leads a team responsible for over $5M in revenues for an Award Winning Restaurant (Wine Spectator and DiRona). Outlets to include a Café,

25 beverage carts, banquets in both Pavilion and Meeting space at the Golf Resort, and a full service restaurant that does over 100,000 covers annually.

• Café – staffed for the golfer for morning breakfast and afternoon lunch • Vue Restaurant and Bar- Full service restaurant serving lunch, dinner, bar service and large party venue. • Banquet staff to facilitate handling all group functions in public spaces and Pavilion. An F&B coordinator works hand in hand with ALL departments reporting directly back to the sales department coordinating all group activity. • Café – 6AM-3PM seven days a week. Summer close early based on golf count • Vue Restaurant- 10AM- 9PM seven days a week except when group buy out. • Bev car service to be seen every four holes with flexibility and enhanced product selections.

While each of these areas has a specific function, they all work in harmony with each other to produce a superior product in both service and quality. It is difficult to take “the Puzzle” apart and reduce or diminish product or service levels and think that it will not trickle down and affect the overall operation as a whole. Change in the form of a reduction in product quality or service level will ultimately yield a lesser price point in all areas and ultimately less top line revenue. In an effort NOT affect overall product quality you must pare service and product with price. To reduce quality only puts the Indian Wells Golf Resort in a larger more price sensitive market. Instead of operating in a top tier market with selected competition, we would effectively be put into a category with more competition that might yield less top line dollars where everyone is racing to the bottom.

26 Scenario #3

 Resident Play limited to after 12:00 p.m. both courses November – April (85% of resident rounds played are played in the morning)

 Replacing 75% of rounds hotel/street play at higher rate (11,237 rounds) - generate min. of $690,274 to bottom line

Subtract R & November December January February March April Totals RG Revenue

Resident Rounds Replaced 2383 1961 2355 2393 3376 2515 14983 $711,086 Average Daily Rate excluding Resident and Resident Guest Rate 117.72 105.84 128.11 141.15 135.33 112.95

75 % Fill $210,430 $155,660 $226,226 $253,302 $342,676 $213,065 $1,401,360 $690,274

50% Fill $140,287 $103,773 $150,817 $168,868 $228,451 $142,043 $934,240 $223,154

Attachment #6 27 Scenario #6

 Change Resident booking window to 24 hours November-April

 Replacing 75% of rounds hotel/street play at higher rate (13220 rounds) - generate min. of $1,027,351 to bottom line

Subtract R & November December January February March April Totals RG Revenue

Resident Rounds Replaced 2103 1730 2078 2111 2979 2219 13220 $209,143 Average Daily Rate excluding Resident and Resident Guest Rate 117.72 105.84 128.11 141.15 135.33 112.95

75 % Fill $185,674 $137,347 $199,611 $223,502 $302,361 $187,998 $1,236,494 $1,027,351

50% Fill $123,783 $91,565 $133,074 $149,001 $201,574 $125,332 $824,329 $615,186

Attachment #7 28 Indian Wells Golf Resort - Strategic Guidance for Proposed New Golf Entertainment Amenity

Prepared For: Indian Wells Golf Resort Steven Rosen, General Manager 44-500 Indian Wells Lane Indian Wells, CA

Prepared By:

501 N. Highway A1a Jupiter, Florida 33477 (561) 744-6006

January 2017

Attachment #8 29 Indian Wells Golf Resort - Strategic Guidance for Proposed New Golf Entertainment Amenity

30 Table of Contents

INTRODUCTION AND BACKGROUND...... 1 I. Background...... 1 II. Summary Statement ...... 2

INDIAN WELLS GOLF RESORT...... 3 I. Inventory of Facilities – Indian Wells Golf Resort...... 3 II. Size and Space Review– Indian Wells Golf Resort ...... 4 A. Aerial View – Indian Wells Golf Resort ...... 4 B. Aerial View – Clubhouse, Range, Putting Course ...... 5 III. NGF Observations on Indian Wells Golf Resort...... 5 IV. Food and Beverage Operations...... 7 A. NGF Observations on Indian Wells Golf Resort F&B Operations ...... 7 V. Other Operational Issues...... 8 VI. IWGR Summary and S.W.O.T. Analysis ...... 9

GOLF ENTERTAINMENT AMENITY ADDITION – FEASIBILITY ANALYSIS ...... 10 I. Description of Improvements...... 10 A. Expected Operating Program ...... 11 B. Other Features / Amenities ...... 11 II. Site Analysis – Space Availability Issues...... 12 A. New Range Concept - IWGR...... 12 B. Other Site Considerations...... 12 III. Site Analysis – Projected Development Cost...... 14 IV. Market Analysis ...... 14 A. Local Indian Wells – Greater Palm Springs Overview...... 14 B. Indian Wells Golf Resort ...... 17 C. Indian Wells / Greater Palm Springs Golf Economy...... 17 D. Comparative Market Data...... 18 E. Golf Industry Overview - 2016 ...... 19 F. Estimated Golf Entertainment Venue Support from Area Hotel Properties ...... 19 G. Key Findings – IWGR Direct Competition ...... 20 H. Market Analysis Summary ...... 22 V. Review of Other Golf Entertainment Concepts...... 23 A. Topgolf ...... 23 B. Other Topgolf-Inspired Concepts...... 25 VI. New Golf Entertainment Amenity at IWGR – Preliminary Projections...... 25 A. Preliminary Assumptions ...... 25 B. Activity Projection Inputs...... 26 C. Fees, Charges and Average Rate Inputs ...... 28

31 D. Projected Operating Expense Assumptions ...... 29 E. NGF Projected Economic Performance (Year 1-6) ...... 31 F. Summary of NGF Projections ...... 32 G. Limiting Conditions ...... 33

NGF MARKET SURVEY RESULTS ...... 34 I. IWGR Golfer Survey ...... 34 A. Summary of Findings ...... 34 B. Custom Questions...... 35 II. Greater Palms Springs CVB Visitor Survey...... 36 A. Summary of Findings ...... 36 III. CVB Travel Professional Database Survey ...... 38 A. Summary of Findings ...... 38 IV. Overall Survey Results Summary ...... 39

OTHER AMENITIES CONSIDERED FOR IWGR ...... 40 I. Review of Amenities Considered for Addition to IWGR ...... 40 II. Other Amenity Summary...... 41

SUMMARY OF FINDINGS...... 42 I. Potential Next Steps...... 42

APPENDICES...... 43 Appendix A – Golf Market Statistical Data...... 44 Appendix B – Local Resort Comparison Matrix ...... 46 Appendix C – Resident Golf Benefit Matrix ...... 47 Appendix D – Other Golf Entertainment Concepts ...... 48 Appendix E – NGF Surveys ...... 49 A. Indian Wells Golf Resort – Golfer Survey ...... 49 B. Palm Springs and Coachella Valley Visitors...... 55 C. Travel Survey...... 57 Appendix F – Amenity Matrix ...... 58

32 Introduction and Background

The National Golf Foundation (“NGF”) was retained by the Indian Wells Golf Resort (“IWGR”) to help evaluate the financial feasibility of adding a new golf entertainment amenity to the City- owned, 36-hole golf resort. The City of Indian Wells (“City”) is currently operating the large resort through a management agreement with the Scottsdale-based Troon Golf management (“Troon”), and is considering ways to enhance the overall resort offering and improve the economic performance. Included in this NGF analysis is a review of the current IWGR amenity package and research to document the potential support for a new golf entertainment venue. It is expected that the results of this NGF study will be used by the City to make informed decisions regarding the addition of new amenities that can feasibly be supported at the resort, and to take actions that will maximize the future performance of the facility and help ensure its long term sustainability.

The NGF consulting engagement was managed by Richard B. Singer, Senior Director of Consulting Services, and Edward Getherall, Director of Consulting Services. Other NGF staff assisted with preparation of surveys, analyzing data and organizing documents. Activities completed by NGF in analyzing the feasibility of the potential new golf entertainment venue included: (1) Meetings with IWGR staff and administration, Indian Wells City Council and staff, IWGR hotel operators, and other stakeholders in Indian Wells and Greater Palm Springs; (2) Tours of IWGR and review of the current operation, including recent performance; (3) Review of local market competitors and resorts; (4) Review of Topgolf and several other golf entertainment concepts for possible incorporation into the IWGR; and (5) Internet surveys of IWGR golfers, area visitors and travel professionals to gauge interest in the potential new venue. Finally, NGF studied the potential impact of other amenities that potentially could be added to help improve the resort’s economic performance, directly and/or indirectly.

The findings and opinions in this report are based on NGF experience, knowledge of golf and resort industry best practices, and a review of the IWGR facilities and operation. NGF also collects considerable information and data on the golf industry as a regular part of our organization’s work; relevant aspects of this information and data are presented in this report.

I. BACKGROUND The City of Indian Wells owns and operates the Indian Wells Golf Resort, a premium “5-star” resort golf facility in Indian Wells, California. The golf resort was developed in 1987 and now serves as the principal recreational amenity for the City, with the 36-hole golf course the premier amenity for the resort. The City has chosen to operate the golf resort via fee-for-service management contract with Troon Golf, with a management fee of approximately $285,000 +/- per year. Indian Wells has invested considerable funds in the IWGR facility, including a $97 million upgrade in 2006 that included major golf course improvements and a new clubhouse. In 2013 the City added the on-site pavilion for use in hosting larger banquets and parties.

The overall “campus” of IWGR includes the golf club and four hotels totaling 1,507 rooms. Two hotels (Renaissance and Hyatt Regency) are directly proximate to the golf club on the north side of Highway 111, and two other smaller hotels (Miramonte and Indian Wells Resort Hotel) are on the south side of Palmeras. The golf resort generates direct revenue to the City, and also provides backing for the 1,460 hotel rooms and supports the City’s collection of Transient Occupancy Tax (“TOT”), which totaled around $6.5 million in 2016.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 1 33 The direct economic performance of the golf club at IWGR has been declining in recent years, with both total rounds of golf and total club revenue falling to five-year lows in FY2016, while total operating expenses are at an all-time high. The result is a City subsidy to keep the facility open and operating, reaching as high as $700,000+ in FY2016, or substantially higher than the $190,000 City subsidy required in FY2014. The financial situation has prompted the City and its operating partner (Troon) to explore ideas to generate additional sources of revenue for IWGR.

Among these ideas is the addition of a new golf entertainment venue that could be added to the resort on the site of the existing driving range. The idea would be to create a new facility like those developed nationwide by Topgolf that could generate additional income (user fees and ancillaries) to the club and help facilitate increased visitation to Indian Wells and the IWGR. The City leadership has indicated it is open to adding this amenity to the facility, and is also considering other new amenities/activities such as pickleball, lawn sports (e.g. croquet or bocce), and other “outside-the-box” ideas like a themed mini golf course or even a zip-line attraction. IWGR is operating in a competitive golf resort environment, and providing a variety of high quality amenities and service is paramount to success in this local market area.

II. SUMMARY STATEMENT In summary, the NGF review shows the City of Indian Wells operating a high-quality, “5-star” resort facility with revenue generation among the highest in the country for municipal golf courses and a high operating expense structure due to the superior service profile. However, this facility is not achieving its maximum revenue potential for several reasons, including the generous golf discount program to City residents (“resident amenity”). As a result, the City’s taxpayers support the IWGR operation, contributing as much as $707,000 toward operational deficits in FY2016. Given this, the City is exploring ways to enhance direct revenue at the resort, while at the same time increasing visitation to the lodging establishments on site and bolstering the TOT revenue. Among the ideas being considered to enhance revenue at the resort is the addition of new amenities and activities that can lead to direct user fee revenue and increased spending on items such as food & beverage and room nights.

NGF has reviewed several options for new amenities that could be added to the IWGR, the most significant of which is a new high quality golf entertainment venue, featuring amenities similar to concepts that are successful in other locations. The NGF has estimated that such a facility could be constructed at the IWGR for about $11.2 million, and could generate up to 100,000 annual visits at about +/- $40 per visit, or around $4.0 million per year in revenue. With the new venue adding about $3.3 million in operating expenses, NGF estimates a net income of $700,000+/- per year at stabilization. This is a conservative estimate from NGF based on inputs detailed in this report, but could be higher based on the success of other comparable facilities and the strong survey support, where 6 in 10 respondents to NGF surveys indicated interest in such a venue, and 1 in 3 indicated a venue like this would influence their decision to visit the Coachella Valley. NGF’s study indicates that the new entertainment venue will generate substantial net incremental income for the City, and provide a new amenity that would be a strong fit to the Indian Wells community and enhance the appeal of the City and IWGR.

In considering other amenities that might be included with this resort, the NGF has found through our review and survey work that those amenities/activities most closely associated with golf (teaching academy, putting course, mini golf) would be much stronger offerings than those outside of golf (pickleball, zip-line, lawn games, bocce) due to the lack of direct revenue associated with the non-golf ideas, the potential to disrupt the high quality of golf at IWGR and the limited space available to site these amenities.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 2 34 Indian Wells Golf Resort

Overall, the IWGR generates close to $13 million in total operating revenue (golf fees, merchandise, food & beverage, etc.), but a strong service model leads to high expenses resulting in a substantial loss on operations to the City. As a result, the City is now considering ideas to help improve the economic performance of the IWGR, including the addition of new revenue-generating amenities that are the subject of this NGF review.

I. INVENTORY OF FACILITIES – INDIAN WELLS GOLF RESORT The Indian Wells Golf Resort facility includes the following elements:

 Golf Courses – IWGR includes two 18-hole championship golf courses (Players & Celebrity), each of which provides an appealing layout with the length, features and aesthetics that is consistent with the highest priced resort golf experiences in the Greater Palm Springs market. The IWGR golf courses are extremely well maintained to provide this high quality golf experience, a result of strong maintenance expertise and a higher than “average” golf maintenance budget of $3.2 million.  Golf Practice Amenities – IWGR has a 22-station grass driving range located proximate to the clubhouse and cart staging area. There is an additional practice chipping area and two practice greens on the north side of the wash (across the cart bridge) and proximate to the 1st hole of each golf course. The inclusion of high quality golf practice facilities such as these is extremely important for high-level resort golf courses commanding above-market green fees.  Putting Course – The IWGR includes a lighted 9-hole grass putting course on about 0.85 acres proximate to the clubhouse and cart staging area.  Clubhouse – IWGR includes a +/- 53,000 square foot (sf) clubhouse added by the City in 2006. The new clubhouse has an outstanding look and presentation and includes features commonly associated with the highest fee resort golf courses, although there may be some inefficiency in overall space allocation (more later in this report). The clubhouse at IWGR includes:

Upper Level Program: . Full service “VUE” restaurant . Large banquet room with space for 150+ patrons . Additional outdoor covered seating . Restrooms Lower Level Program: . Casual café located near the golf staging area . Club / meeting room . Golf pro shop . Administrative offices and meeting rooms . Two indoor golf performance bays / indoor hitting areas . Additional outdoor covered seating . Restrooms

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 3 35  Pavilion – A 5,600 sf banquet pavilion located on the north side of the wash (across the cart bridge) and proximate to the golf practice area and 1st hole of each golf course. This pavilion is used for all kinds of large gatherings and parties and has been very successful since being added in December, 2013.  Other Support Facilities – IWGR has a 60,600 sf maintenance compound on the north end of the property off Fred Waring Dr. The former halfway house is proximate to the pavilion and is used for restrooms, storage and a banquet finishing kitchen.  Parking - NGF counts 120 parking spaces for IWGR, an amount that corresponds to a “typical” 18-hole public golf course without large-scale clubhouse or banquet pavilion. There is additional parking on-site that is reserved for the resort hotels. The facilities and amenities noted above are appropriate and marketable for a high-end resort facility in the Greater Palm Springs market, assuming outstanding conditions. The mix of amenities offers a variety of venues and activities that also adds to the appeal of the golf club and makes attraction of both golf and non-golf consumers realistic. In summary, IWGR is offering the basic package of amenities that tends to correlate with success among resort golf facilities in this price range, assuming conditions and functionality are appropriate. II. SIZE AND SPACE REVIEW– INDIAN WELLS GOLF RESORT The total IWGR property comprises an estimated 430+/- acres, of which approximately 40 acres comprise the hotel/resort area and parking, 8.0 acres for the club and parking, 8.0 acres for the range and practice areas, 20+/- acres for open areas and the wash, and the remaining 354+/- acres for the golf courses. While total acreage seems generally adequate, the NGF has identified clear space constraints in the IWGR operation. Property aerials illustrate the space constraints associated with adding new amenities for the IWGR site.

A. Aerial View – Indian Wells Golf Resort

Google Earth image showing the IWGR property. This view shows very little property available for new development within the golf club area “footprint.” Only the driving range and small putting course area stand out as open and available for new development.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 4 36 B. Aerial View – Clubhouse, Range, Putting Course

Google Earth image showing the clubhouse and surrounding area, including the driving range and putting course. The NGF has measured approximately 4.1 acres for the range (to 300-yards) and about 0.9 acres for the putting course. This leaves approximately 5.0 +/- acres of usable property for some form of new entertainment venue to be added on the driving range. The site “footprint” for IWGR is mostly fixed, with two 18-hole golf courses and large clubhouse. The only property available for new development within the golf club footprint (excluding resort areas) is the +/-5.0 acres in and around the driving range/putting course and the 1.5 acres of golf practice area around the pavilion. It is expected by NGF that any new amenity that could be added to the IWGR would have to be added in one (or both) of these two areas. III. NGF OBSERVATIONS ON INDIAN WELLS GOLF RESORT The NGF completed a limited review of the IWGR golf and clubhouse operation as part of our feasibility considerations for new amenities, and identified a few key findings on the City’s golf facility operation:

 IWGR is a high quality golf resort facility, capable of commanding the highest level of golf fees in this market. The golf courses offer “5-star” layouts, conditions and quality.  A facility of this type will always need certain amenities to sustain the high level of resort-golf service, such as a high quality clubhouse with attractive pro shop and upscale restrooms, high-quality food & beverage (F&B) amenities (including full service restaurant, bar and snack bar), a driving range and short-game practice area and a practice putting green with conditions comparable to the golf course. These amenities are considered “standard” for high quality resort golf facilities and are expected by customers who consume golf at this price point.  Overall, this facility is providing a very high level of service, requiring a large employee “footprint” that is not directly comparable to industry norms. The NGF has found that much of the operating expense is fixed and cannot be reduced without a corresponding reduction in service level or maintenance quality / condition.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 5 37  Total operating revenue for IWGR was just over $12.7 million (MM) in FY2016, with $5.87 MM in golf fees, $1.25 MM in merchandise sales, $5.12 MM in F&B and $460,000 ($460K) in other items. This total revenue figure was over $13.1 MM in FY15, representing a 3.1% decline in the last year. Observations on IWGR revenue: . The $5.1 MM in F&B sales accounts for 40% of total gross revenue, while golf fees are 46% of total gross revenue. This mix shows the growing importance of non-golf revenue at IWGR. . The $1.25 MM in merchandise sales would place the IWGR in the highest 2.0% of all golf facilities in the U.S.  Despite the high revenue, IWGR could be earning even more gross income, but NGF has found the facility’s revenue is constrained by: . Mandated $35 golf for residents year-round and at all times. This $35 fee is compared to the facility’s overall average daily rate for non-residents of over $85 per round of golf. . There is a policy providing Indian Wells residents preference on golf play, thus limiting the number of higher fee rounds that can be sold by IWGR. . Residents are provided ID cards at no charge.  The total operating expense was $10.8 MM in FY2016 (excluding cost of sales). All areas of expense are higher than industry “averages,” but these averages are not reflective of the type of operation in place at IWGR or the level of service and condition. Expenses include: . $7.06 MM in total personnel . $964K in repairs and maintenance . $865K in operating expenses . $805K in utilities . $488K in leases . $318K in marketing . $287K in management fee  The total loss on operations was ($700K+) in FY16, compared to only ($188K) loss in FY2015. This loss on operations is subsidized by the City’s General Fund.  The City of Indian Wells reported to NGF that the expectation for earnings at IWGR is “break-even” or a slight profit. The big revenue driver for the City in this resort is the collection of transient occupancy tax (TOT) from hotels and a high quality golf facility is required to maintain hotel occupancy.  The 120 parking spaces counted by NGF provided for very limited parking. IWGR staff is very active in “stacking” to make room for all cars, thus NGF expects there will always be a need to retain valet parking at IWGR.  The four hotel properties that make up the lodging component of IWGR all indicated that they were seeking to expand the menu of amenities with new enhancements (water, racquet, fitness, etc.). There may be space available within these resorts to add new amenities that do not require a large footprint or substantial investment, separate from any new venues that could be added to the golf club.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 6 38 IV. FOOD AND BEVERAGE OPERATIONS The food and beverage (F&B) operation at Indian Wells Golf Resort is a significant part of facility operations, accounting for 40% of total revenue. As the City considers the addition of a new golf entertainment venue at IWGR, the F&B segment of this new venue will likely be significant, and therefore is an important aspect of the NGF analysis. Revenue from F&B operations totaled $5.12 million in FY2016, or $65.87 per round of golf. In addition, this club has seen considerable growth in this revenue segment, increasing from around $4.2 million in FY2013 to $5.2 million in FY16 (24% growth). The review shows an increase in F&B revenue every year without exception since 2013.

The Indian Wells food and beverage operation is made up of the following key elements:

 VUE Grill & Bar – The largest space in the main clubhouse, occupying most of the second floor with some outdoor seating. VUE provides a full-service restaurant experience for lunch and dinner every day and year-round.  IW Café – A smaller downstairs venue with limited seating primarily serving golfers before a round and at the turn. This café does not have a separate downstairs kitchen, thus limiting the menu.  Beverage Cart / Snack Bar – Primarily on-course service to golfers, with 71% of sales in beer, wine and liquor.  Banquets – IWGR hosts numerous banquets and parties in the upstairs banquet room and banquet pavilion, producing about $1.57 MM in revenue in FY2016. IWGR reported a total of 234,650 covers from its F&B operation from July 2015 through June 2016. The breakdown between IWGR F&B venues is shown below:

Indian Wells Golf Resort Summary of Food and Beverage Covers (2015-2016) Service Area No. of Covers % of Total Total Revenue % of Total Per Cover VUE Grille & Bar 101,539* 43.3% $2,800,292 54.7% $27.58 Café 32,635* 13.9% $321,254 6.3% $9.84 Bev. Cart / Snack Bar 77,525 33.0% $430,468 8.4% $5.55 Banquets 22,951 9.8% $1,567,501 30.6% $68.30 Totals 234,650 100.0% $5,119,516 100.0% $21.82 Source: IWGR. *Includes total covers for both resident and non-resident (see note below).

A. NGF Observations on Indian Wells Golf Resort F&B Operations The NGF consultants offer the following observations on the IWGR F&B operation, and how a new golf entertainment venue with additional F&B options could be impacted:

 The F&B service at IWGR is a primarily a high-end restaurant operation with strong banquet performance. The service areas focused on golfers (café and beverage cart) produce $9.69 per round of golf, an amount which is only 58% higher than the $6.15 industry standard. It is clear that the VUE Grille and Banquet operations, primarily serving non-golfers, are the revenue drivers for this club’s F&B concession.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 7 39  Indian Wells residents are offered discounts at both the Café and VUE Grille. These covers are recorded separately, with 15,296 (15%) of the 101,539 VUE covers and 4,415 (13.5%) of the 32,635 Café covers coming from City residents. IWGR has recorded a combined total of about $90,000+/- in total resident discounts between the two venues. The NGF expects that this resident discount would be applied to any new F&B service that may be added within the new golf entertainment venue.  The total direct cost of sales (COS) for the IWGR F&B operation was $1,589,108 in FY2016, or 31% of total revenue. This is well below the golf industry standard of 40% for COS, and is reflective of the facility management’s ability to control direct costs. The NGF will assume that this direct COS control would continue as part of any new F&B service that may be added within the new golf entertainment venue.  The staff needed to support the F&B operation at IWGR appears appropriate for an operation of this volume. Key senior staff positions within the F&B operation are expected to remain adequate to cover additional service area(s) associated with a new golf entertainment venue. The club employs the following full-time positions: . F&B Manager . Executive Chef . Banquet Chef . Servers (17) and additional Hourly Staff (+/- 90,000 hours / year)

V. OTHER OPERATIONAL ISSUES Other key issues related to the IWGR operation observed by NGF that could impact decisions on adding new revenue-generating venues to the facility:

 Resident Access – The City of Indian Wells has secured guarantees for City residents at IWGR, including preferred tee-time access and $35 green fees. The club staff reported that 30% of tee times are reserved for residents (14-day advance, and right up until 24 hours before), thus limiting the potential to sell those rounds to other (higher paying) customers. Residents of Indian Wells are guaranteed a $35 green fee for all golf rounds at all times, a fee that has been in place with no change since the opening of the course in 1987. The NGF does expect some resident benefits to be present at a new golf entertainment amenity, although not as liberal as the current golf program.  Hotel Golf Activity – IWGR used to draw much higher activity from the on-site resorts, with staff reporting activity as high as 60% of all rounds coming from the resorts as recently as 2001 (40% capture from resorts). Data reviewed by NGF shows activity derived directly from the hotels (through direct booking) at closer to 10% in FY2016. This hotel booking is down by about 47% since 2012. NGF has assumed a use pattern at a new golf entertainment venue from on-site resorts to be better than the current participation, but not nearly as strong as the early 2000s.  Marketing Activities and Budget – IWGR reported spending close to $318k on marketing in FY2016, an amount equal to 2.5% of total revenue. The NGF typically expects golf facilities to spend 2% on marketing, with a higher amount expected for “specialty” facilities, so the marketing budget for IWGR is within expectations. NGF has assumed that this would continue with any new venue, with NGF projections assuming new marketing efforts at the same percentage of revenue as at present and with additional marketing support from the City.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 8 40  Putting Course – The IWGR has a 9-hole grass putting course that is lighted for night use. The club reported marginal use, mostly related to the 25+/- corporate events that use the putting course each year (about 2x per month). Total revenue from the putting course is under $50,000 per year with comparable direct expense. The NGF expects that the putting course can either be absorbed in some fashion to the new golf entertainment venue, or re-purposed entirely taking advantage of the available property on site.

VI. IWGR SUMMARY AND S.W.O.T. ANALYSIS The golf club portion of the Indian Wells Golf Resort is a mature resort golf club property with outstanding golf and golf-support amenities. The golf club is providing a high level of service, and thus has a high expense profile, leading to shortfall in operating revenue. The local Indian Wells and greater Palm Springs markets are strong in attracting visitors seeking high quality golf, but changing demographics and a decline in golf will require new offerings to sustain operations for the longer term. The NGF’s review of the Indian Wells Golf Resort, amenities offered, condition of facilities, proposed upgrades, and club operations, as well as our review of the external market environment, leads to the following analysis of the Club’s current position. The NGF opinion on the Club’s strengths, weaknesses, opportunities and threats is summarized below:

S.W.O.T Analysis Indian Wells Golf Resort

Strengths Weaknesses Facility Quality – especially golf courses and Lack of Variety within Amenity Package – limited to clubhouse, which are premium for the market area the golf course, practice, putting course and clubhouse High quality service – the service level is second-to- Resident Requirements – Required benefits to none for public courses in this local market residents impact club economics Golf Club Reputation – IWGR has a national Lack of Casual Dining Convenience and Space– not reputation for quality, and has hosted prestigious enough space allocated to casual dining and bar events like the LG Skins and Big Break Indian Wells service for golfers requiring a quick turnaround Strong management and knowledgeable staff – Small Permanent Resident Market – The IWGR IWGR is managed by a nationally-known company with market is highly dependent on transient visitors to extensive experience in high quality resort golf sustain operations City Support – residents of Indian Wells provide Limited Space Available for New Amenities – space support of the facility through use of amenities; City is limited for amenities and parking in the footprint of provides oversight the club Opportunities Threats Younger Demographic – there is a new emerging Possible New Golf Specialty Development– Another demand from younger (under 35) age segments that entity may seek to add a golf-entertainment venue in could be attracted with proper amenity mix GPS, possibly competing directly with IWGR Increased Resort Penetration – the golf club could Declining Interest in Golf – Golf is still the primary capture a greater share of hotel guests at the IWGR economic driver of IWGR External Efforts to Grow Visitation in GPS– CVB Economy – Status of both the local and national activities are ongoing and significant economies will impact Indian Wells club performance Possible Resort Expansion – IWGR hotels Desert Setting / Water – water costs are a high fixed considering expansion and/or the addition of new expense for the operation in proportion to total annual amenities (water park, Desert Pipe at Hyatt, etc.) operating costs Potential for Growth in Banquet Operations – The Reduction in Service Standard – If revenues cannot new pavilion is expanding in 2017 and could help to increase, lower expenses may lead to reductions in increase activity and revenue service

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 9 41 Golf Entertainment Amenity Addition – Feasibility Analysis

The golf club at IWGR shows economic challenges, with a subsidy upwards of $700,000 required from other City sources. The City has many options to consider in attempting to reduce, or eliminate, this subsidy, including various expense reductions and new areas to increase revenue. The NGF has been retained in 2016 to look specifically at one such avenue of revenue enhancement – the addition of a new golf entertainment amenity to be developed on property currently occupied by the golf driving range.

The idea is to replace the existing driving range with a new, multi-story golf range structure, and offer the highest quality golf range experience along with considerable ancillary features such as high-quality food and beverage service, “sports pub” atmosphere and various golf games for players on the range. This concept has been successful in other locations, particularly with the nationally-known brand of “TopGolf,” although this company’s exact concept is not under consideration for Indian Wells. If developed, the NGF finds that this new amenity would be a unique offering for the greater Palm Springs area golf market, and would enhance the revenues at the IWGR with additional direct revenue from the new venue, additional revenue to the golf courses and clubhouse, and possibly even incremental visitation to the adjacent hotels.

I. DESCRIPTION OF IMPROVEMENTS The proposal evaluated by NGF involves the addition of a new permanent multi-level golf driving range structure to be developed on the site for the existing IWGR main driving range. Given the site’s space constraints (more below) IWGR will have to build vertically in order to add a number of golf range stations to result in a level of revenue to justify the investment. NGF has assumed a three-story range facility with 18 artificial mat driving range stations (open to the range hitting area) on each level, or 54 total stations (bays). Each layer will have a different level of service and associated amenities, with the first and second level interiors at least partially enclosed for air conditioned comfort. The basic components to be included:

 Multi-level, climate controlled golf driving range with three (3) stories. The NGF envisions a building “footprint” of 20,000-21,000 sf (or 60-63,000sf of floor space) to be located on the existing driving range site with 1,600-1,700 lf of netting to fully enclose the landing area. The three levels of service would include: . Ground Level – 18 golf hitting stations along with game area, bar, snack bar (w/seating for 60), entrance lobby and full kitchen. . Level 2 – Club level with 18 golf hitting stations that can be sub-divided into 4-5 “club” sections or private meeting rooms (flexible). Level 2 will also have a bar, luxury lounge seating and at least two (2) separate meeting rooms. . Level 3 – The top level is assumed to be an “open air” outside level for 18 tee stations with full sun-shade covering + misters, additional bar and lounge area, and possible fire-pit and other gathering space.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 10 42 A. Expected Operating Program The NGF expects IWGR to create a program of range operation complete with advanced technology and games available for up to six (6) players at each bay. Each bay will have comfortable seating for each player and guests. In addition:

 Golf Ball Tracking – The IWGR range will include a modern golf ball tracking system using one of two basic concepts: . Chip in Ball System – This provides ball tracking by placing a computer chip inside the golf ball and tracking its movement. . In Flight Tracking – IWGR could add a system to track golf balls as they are in flight (like Trackman ® or others like Doppler, etc.). NGF has assumed this system will be used at the IWGR range, and has assumed Trackman ® system in our projections. This includes the use of touch-screen interface for providing golfer feedback, instruction assistance and entertainment (activities, games, contests, etc.).  Golf Entertainment – A key focus area for the new range amenity will be to develop a series of golf-related entertainment concepts, mostly utilizing the Trackman ® system. This will include a variety of activities, interactive games and contests that can be developed for small groups to play within a particular bay, or in the form of leagues and tournaments against other individuals or teams.  Leader Boards / Displays – In keeping with the proposed golf ball tracking system and golf entertainment, each bay will include a high quality flat screen TV for displaying golf shot feedback and/or game information (i.e. “leader boards”) and additional TVs for sports viewing.  Lessons / Programs – The new IWGR range facility will provide appropriate PGA golf instruction for beginners, intermediates and advanced players. This will be in the form of individual lessons, clinics, golf schools and camps.

B. Other Features / Amenities Additional amenities to be included in the new facility and developed and maintained at the highest quality include:

 High quality golf clubs available at each bay (perhaps agreement with a specific manufacturer) for use by patrons.  High quality F&B setting with a snack bar, club-level restaurant, several bars with TVs, and wait service direct to hitting bay areas (or club rooms).  The entire facility will be programmed for a nightlife atmosphere with music, sports on TV and activities/events.  The facility would be designed to provide space to accommodate larger groups, parties and/or meetings.  The facility will be fully lighted for night use and is expected to be open late into the evening, although most activity is expected after 4:00 pm – with a peak at 9-11 pm (or later on weekends).

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 11 43 II. SITE ANALYSIS – SPACE AVAILABILITY ISSUES The NGF review of the IWGR property shows limited space available for new amenities within the defined “footprint” of the resort’s golf club site. The NGF has identified approximately 4.1 acres of driving range (with hitting area to 300-yards from back tee line), and about 0.9 acres for the putting course. This leaves approximately 5.0 +/- acres of usable property for some form of new entertainment venue to be added on the driving range. The aerial image below shows how a new golf entertainment venue could be sited on the existing range at the IWGR:

A. New Range Concept - IWGR

270 +/- yards Bldg (14,000 sf) Range Entertainment

Google Earth image showing a proposed new range facility at IWGR. For this concept to work, the City will have to commit to enclosing the landing area of the new range facility with 120+’ netting on all sides. This shows that a range structure with a 14,000 +/- sf “footprint” with bar, activities and 54 +/- hitting bays on 3 levels can fit on this site (building size = 235’ X60’)

B. Other Site Considerations The only other property within the golf club at IWGR that could be available for some form of re- development would be the 1.5-acre golf practice area around the new pavilion. However, the NGF strongly supports the need for IWGR to include an area for chipping and putting practice, and thus if this site were to be used for another purpose those golf practice elements would have to be recreated at a convenient location elsewhere on property. We also note that this site is across the bridge and not convenient to the clubhouse and any recreation-type activities located here are not likely to be widely used. Evidence for this is a croquet court that once existed on this site and was vastly under-utilized. Other uses related to the banquet pavilion could be considered (more later in this report), but NGF is concerned about large gatherings, noise and distractions located so close to the 1st tee of the golf courses.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 12 44 Other golf holes in proximity

Banquet Pavilion

Former halfway house now used as restrooms and finish kitchen for Pavilion

1.5 – acre golf practice area

1st tee of Players course

Google Earth image showing the current golf practice area around the pavilion and 1st tee of the Players course. This view shows the tight proximity of these elements. NGF’s concern is that adding too much around this location could interfere with the play of golf on the courses. This is not ideal for a high quality resort golf facility, and the required practice amenities must be replaced elsewhere on property.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 13 45 III. SITE ANALYSIS – PROJECTED DEVELOPMENT COST The NGF has estimated that the development of a new golf entertainment facility, designed to the basic inputs as noted above, would cost a total of $11,130,000 (2016 dollars). This total encompasses all of the elements needed to build the facilities, provides for furnishings, equipment and technology ready to open the venue to the public, and includes other “soft” costs and preparation. The NGF estimate is summarized in the table below:

Indian Wells Golf Resort – New Golf Entertainment Amenity Total Estimated Development Cost Total Estimated Amenity Notes Development Cost Range Building Two-story structure with roof build-out (level 3) Incl. basic range amenities w/kitchen (14,000 sf Ground Level $2,800,000 @ $200/sf) Club level with club sections, meeting rooms, Level 2 $3,500,000 luxury lounges (14,000 sf @ $250/sf) Roof level with amenities and soft covering Level 3 $1,680,000 (14,000sf @ $120/sf) Includes all required to match the defined Furnishings, Fixtures & Equip program, incl. TVs, sound, F&B + kitchen $1,500,000 equip, etc. Platform to run the golf entertainment / games Technology $650,000 for the driving range ($12,000 x 54 bays) Soft costs, designs, site prep, netting, lighting, Other Costs (incl. contingency) $1,000,000 demolition, misc. (estimated at 10.0%) Grand Total for Indian Wells GR New Golf Entertainment Amenity $11,130,000

NGF estimate based on actual development costs for comparable golf entertainment facilities, inputs derived from local appraisal information, realistic size specifications and the NGF team’s experience with similar golf range entertainment developments.

This NGF-estimated development cost assumes a very high level of quality in materials and presentation, so as to match the program of the existing IWGR clubhouse. The NGF has also assumed that such a structure could be developed on the IWGR site, and that all issues with size, height, lighting and utilities would be approved by all local and State authorities.

IV. MARKET ANALYSIS The Indian Wells Golf Resort is the key amenity for residents of Indian Wells, California, a small resort city of about 5,300 residents in the heart of the Greater Palm Springs (GPS) market area. The City is largely void of any large-scale industry or employment, and thus is dependent on the influx of retirees, seasonal residents and visitors to its resort or large events held in the City. As such, the NGF expects that any investment in new amenities at the IWGR will also rely on participation from the large visitor market in the area, in addition to the permanent resident population. The main economic driver within the City is the collection of transient occupancy taxes (TOT), which is in part supported by the amenity package present at the IWGR.

A. Local Indian Wells – Greater Palm Springs Overview The Coachella Valley is a desert valley in Southern California that extends for approximately 45 miles in Riverside County, southeast from the San Bernardino Mountains to the northern shore of the Salton Sea. The valley is part of the 13th-largest metropolitan area in the United States known locally as the “Inland Empire” metropolitan area. The famous desert resort cities of Palm Springs and Palm Desert lie in the Coachella Valley, along with Indian Wells. The

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 14 46 Coachella Valley is well known for its warm winter climate and the large number of tourists and seasonal residents who come to the area, adding some 100,000+ seasonal residents and another 12+ million total visitors each year. The Coachella Valley has approximately 120 lodging properties and nearly 15,000 hotel rooms, with an additional 2,000 rooms in planning for near future additions. The Valley-wide annual occupancy rate is estimated at 59%.

Indian Wells is a city in the Coachella Valley, lying between Palm Desert and La Quinta, with a permanent population of about 5,300 residents (2013). The small City is known for its vibrant winter / seasonal visitor and seasonal resident economy. The City also hosts the fifth-largest tennis tournament in the world, the BNP Paribas Open played each year at the Indian Wells Tennis Garden, which contains the second-largest tennis-specific stadium in the world.

Synergistic marketing opportunities would also exist for the new IWGR golf entertainment venue and the Indian Wells Tennis Garden. Tennis Garden management already buys tee time blocks for groups of up to 16 people (sponsors, etc.), and provides golfers for IWGR. The Tennis Garden also provides concierge service to VIPs (players, entourages, etc.) and reported that they are always looking for other activities to serve these constituents. Rentals of private rooms, blocks of bays, or even the full golf entertainment facility are all possible ways the Tennis Garden can provide supplemental demand for the new venue.

The Coachella Valley and Indian Wells have a considerable economy that can directly affect the demand for golf and new golf specialty amenities. Key aspects of the regional economy include:

 The Coachella Valley has a population of 346,000. State projections estimate that the valley's population will pass 500,000 by the year 2020 and 1 million by 2066. The area hosts an additional 100,000 temporary seasonal residents arriving to stay during the winter months (from the end of October to the end of April).  The Coachella Valley (or Greater Palm Springs - GPS) hosts a significant tourist and seasonal resident economy. The GPS Convention and Visitors Bureau (CVB) estimates upwards of 12.9 million total visitors spending a total of $6.4 billion in the valley in 2015, with $731 MM spent on recreation). Of this total, an estimated 5.7 million of the visitors will stay at least one overnight within the valley.  The Coachella Valley has many defined events that can attract large numbers of visitors, and these events and visitors can impact golf activity in the Valley. The most significant events held in the area each year include: . The BNP Paribas Open tennis tournament held at The Indian Wells Tennis Garden – attracted over 456,600 spectators in 2015 . The Living Desert – 350,000 visitors . Coachella Valley Music and Arts Festival – 185,000 visitors . Palm Springs International Film Festival – 137,000 visitors . Pride Week festival – 130,000 attendees . Desert Trip Music Festival – 90,000 attendees . The PGA Tour Career Builders event – 83,500 spectators . The LPGA ANA Inspiration event – 45,000 spectators in the area . Nine (9) other events that draw in excess of 10,000 visitors . Several casino properties with adjacent resorts . “Splashtopia” at the Omni Ranchos Las Palmas

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 15 47  The valley has distinct primary and secondary markets from which it draws a regular share of visitors. These include: . Primary Drive-in Markets – Los Angeles, Riverside, Orange and San Diego. . Secondary Fly-In Markets – San Francisco, Seattle, Portland, Chicago, New York, Las Vegas, Minneapolis, Denver, Sacramento, Washington, DC and Dallas were the top U.S. Fly-in markets, plus several Canadian Cities.  There is ample reason to assume the large volume of visitors will continue to come to the area and impact the Valley’s economy, including the GPSCVB’s ”Modern Oasis” and “Summer Chill” campaigns, and the $2.3 million+ media spend in 2016. There are many other groups and partnerships actively working to promote the Valley, in addition to individual properties that are active in marketing the area.  The Coachella Valley and Indian Wells economy is driven largely by retirees, seasonal residents and tourist activity, and local government is largely supported by related retail sales taxes and the transient occupancy tax (TOT). There is a vibrant service economy in support of these sectors with growing employment in the valley in recent years. The CVB’s Economic Impact Study indicated 49,500 jobs are supported by the visitor economy, up 5.8% since 2013. Total lodging revenue was reported to have increased 16.8% from 2013 to 2015.  The Palm Springs market has demonstrated strong convention and meeting attendance, with the 260,000sf convention center hosting more than 100 conventions with 130,000 total attendance in 2014. An HVS consulting report in 2015 estimated that a total of about 66,000 room nights were generated from Palm Springs Convention Center activity in 2014.  The valley connects with Greater Los Angeles to the west via the San Gorgonio Pass, a major transportation corridor that includes Interstate 10, which runs along the northeastern rim of the valley. State Route 111 runs for about 30 miles along the southwestern rim of the valley and serves as the main highway between almost all Coachella Valley cities. A four-lane expressway, State Highway 86S opened in the early 1990s as a bypass of two-lane Highway 86. The subject IWGR is located with its entrance on State Highway 111, about 6.5 miles from the nearest interchange with I-10. The IWGR is relatively convenient and easy to find, helping to expand the market draw for all existing and future elements within the resort.  The Palm Springs International Airport (PSP) is the area's primary airport, currently serving about 1.9 million passengers per year. The Palm Springs area has generally been a drive-in market due to limited airlift, but air traffic has increased every year since 2012. Primary destinations to and from PSP closely match the fly-in markets noted earlier, with San Francisco, Seattle and Dallas as the top-3 destinations. The airport is located in Palm Springs, about 12.5 miles from the IWGR along SR-111.  Climate - As with any outdoor recreation, weather will have impact on golf participation. NGF data estimates that almost all golf is played with temperatures between 50 and 90 degrees Fahrenheit. Indian Wells has a hot desert climate, with over 300 days of sunshine and less than 5.0 inches of rain annually. The winter months are warm, with a majority of days reaching 70 degrees. There are 180 days with a high reaching 90 degrees or higher and 116 days with a high over 100 degrees. The extreme high temperatures can restrain total golf activity at various times of the year and time of day, and provide a need to consider various shading structures to protect patrons at any new golf entertainment venue.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 16 48 B. Indian Wells Golf Resort The Indian Wells Golf Resort is a City-owned 5-star resort that includes four separate hotel properties – Miramonte Resort & Spa, Hyatt Regency Indian Wells Resort & Spa, Renaissance Indian Wells Resort & Spa and the Indian Wells Resort Hotel – along with the golf club and clubhouse. The four properties that make up the IWGR include 1,500+ total lodging units and host an annual occupancy rate of about 65%. The breakdown of Indian Wells hotel properties:

Rooms Group / Total Units Directly Leisure Demographic Hotel (Rooms + Villas) Other Amenities from Golf Mix % (Under / Over 55) Miramonte 219 Spa, Sa, FC, P 1,200 40%/60% 85%/15% Spa, Sa, FC, Ws, Hyatt 573 N/A 50%/50% 39%/41% P, T, Bk, L, Bc Spa, Sa, FC, Mv, Renaissance 560 3,000 60%/40% 39%/41% P, T, Bk, L Indian Wells Hotel 155 T, P, FC N/A 40%/60% 70%/30% Total / Average 1,507 51%/49% 49%/51% Amenity Code: Sa = sauna; FC = fitness center; Mv = movie theater; Bk = bike rentals; P = pool; L = lawn activities; Ws = water slide; Bc = bocce; T = tennis

With 1,507 total units, these four hotel properties combine to provide 550,000 total available annual room nights (1,507 x 365). Of these, the NGF estimates that approximately 183,000 total room nights are available in peak season (January – April) and the remaining 367,000 are available in the off/shoulder season (May – Dec.). Review of data provided by the IWGR hotels indicated an average occupancy of around 75% in peak season and 54% in the off-season.

C. Indian Wells / Greater Palm Springs Golf Economy Golf facilities play a major role in the recreation and entertainment industry of the Coachella Valley, while serving as a major draw for tourism to the region. Coachella Valley is home to approximately 125 golf courses, or roughly 13.9% of California’s golf courses. All combined, these courses generated an estimated $476 million in gross golf revenue and over $745 million in total golf-related spending in 2014. The golfers are divided into four distinct groups including permanent residents, second home (seasonal) residents, overnight visitors and day-trippers.

Projected Coachella Valley Golf-Stays & Golf-Related Spending, 2014

Visitor Type Resident Second Home Overnight Day Total1

Golf-stays 430,150 931,508 292,515 158,114 1,812,286 Spend per golf-stay $67.22 $432.45 $1,014.60 $108.22 $411.44 Golf-related spending $28,916,164 $402,831,585 $296,785,335 $17,111,724 $745,644,808

Source: Tourism Economics. 1: Total “Spend per golf-stay” represents average weighted by visitor type share of total projected golf-stays

The Coachella Valley is one of the world's premier golf destinations, and is the most popular golf vacation destination in California. The Merrill Lynch Skins Game was held in La Quinta each Thanksgiving and drew some of the biggest names in golf. The PGA has a major presence in La Quinta as well, with the PGA WEST golf and residential complex. Of the 125 total golf facilities in the Valley, about 50% are available to the public and about 50% are private, member-only clubs. Of the public facilities, 67% are defined by NGF as “premium” facilities with green fees in the highest category of over $70 per round of golf.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 17 49 D. Comparative Market Data The table below details basic demographic and golf market data indicating the magnitude of the local golf demand (additional support data in Appendix A). We note that much of this data is based on the permanent resident population, and is not reflective of the large retiree, seasonal resident and visitor populations in the market area (more later in this section).

IWGR IWGR IWGR 10-Mile 25-Mile State of United Summary of Club Market Indicators 5-Mile Ring Ring Ring California States Demographics Population 2010 Census 119,526 274,468 427,373 37,253,956 308,745,538 Population Estimate 2016 133,068 305,310 476,886 39,383,430 322,736,220 Population 2021 Projected 142,510 326,761 510,405 41,491,003 335,779,240 CAGR 2016-2021 0.86% 0.85% 0.85% 0.65% 0.50% Median HH Income (2015 Estimate) $58,880 $54,207 $49,125 $65,157 $56,106 Median Age (2015 Estimate) 49.2 42.3 41.3 36.4 38.0 Golfers Number of Golfing Households 8,496 16,037 22,358 1,539,562 17,094,500 Seasonal Golfing Households 3,182 5,984 7,813 42,550 737,636 Rounds Potential (resident golfers) 401,966 770,655 1,053,418 40,204,841 465,791,320 EstimatedRounds(in-marketsupply) 2,179,653 4,285,431 5,166,010 45,359,536 465,791,320 Latent Demand/Interested Non-Golfers 17,673 35,074 52,922 4,580,380 37,346,480 Golf Indices Golf Participation Index 104 100 91 84 100 Golf Rounds Activity Index 180 176 157 80 100 Source: Tactician, Inc. and NGF Consulting. CAGR = Compound Annual Growth Rate.

 The permanent population in the IWGR market areas is relatively small, but growing at a faster rate than the State of California and the U.S. overall. Median age and median household income tend to be higher in the markets closer to the IWGR, and even higher in the 2-mile market ring (57.2 median age and $61,790 income). These figures tend to coincide with higher-than-average participation in golf.  Despite the smaller permanent population, there are is a very high proportion of higher income households in the Indian Wells and Coachella Valley markets. An estimated 32% of households in the 2-mile ring show incomes over $100,000 annually, while 11% show income in excess of $200,000, both a key “sweet spot” for high golf participation and activity: IWGR IWGR IWGR IWGR 10-Mile 25-Mile Higher Income Households 2-Mile Ring 5-Mile Ring Ring Ring No. of Households over $100,000 Income 2,814 16,219 29,268 39,582 No. of Households over $200,000 Income 969 4,536 8,270 10,705

 The NGF estimates about 8,500 golfing households, plus an additional 3,182 seasonal households, in the 5-mile market around the IWGR. Further, the NGF estimates a total of over 22,000+ golfing households and 7,800+ seasonal golfing households in the 25-mile ring (comparable to Coachella Valley). This is a large market of permanent and seasonal resident golfers capable of supporting a large market of golf facilities, and this does not include the larger market of transient / visiting golfers who come to the market each year.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 18 50  NGF estimates the residents in the 5-mile ring could demand upwards of 401,000 rounds of golf annually, with the golf courses in the market ring hosting over 2.1 million rounds annually, indicating a strong demand from non-residents at area golf courses. The 2.1 million rounds played in the 25-mile market represent about 11.4% of all golf rounds played in California, further documenting the strength and importance of this golf market and helping to confirm the expectation that the demand to support additional golf amenities at the IWGR would be present.  Overall golf activity is higher per household in the IWGR market when compared to the rest of the Coachella Valley and the State and nation overall. The area also shows a high level of latent demand, with almost 53,000 non-golfers expressing interest in becoming golfers in the Valley.

E. Golf Industry Overview - 2016 Despite significant negative press, the golf industry remains healthy and golf continues its macro trend toward stabilization in 2016. Considering the severity of the most recent recession and its lingering effects on discretionary income and time, golf has held up rather well. Multiple NGF studies of golfers since 2008 attribute the gradual decline in golfers and rounds since peak participation primarily to the impact of lower job security and concern over personal finances, not waning appeal for the game. Total spending on golf and club memberships will always be vulnerable to outside forces such as the economy, but the game remains popular and is fortunate to have a deep well of interested prospects. Some findings from NGF:

 Participation - The national golfer number (participation) appears to be continuing a stabilization trend (with some net leakage among mainly occasional/less committed golfers), with 2016 projected to be the fifth consecutive year at approximately 24+ million golfers that played at least one round of golf in the past 12 months. Over 2.5 million people took up golf for the first time in 2015, the highest annual total in more than 16 years.  Golf Course Supply - The correction in golf course supply continued in 2015 at a level comparable with the previous three years. According to NGF data, since the market correction in golf course supply began in 2006, there has been a cumulative net reduction of 679.5 golf courses (18HEQ), which represents a drop of about 5% off the peak supply year of 2005. For perspective, golf supply grew by 40% in the previous 20 years (1985-2005). This much-needed move toward supply/demand equilibrium is expected to continue for the next several years.  “Millennials” - Also, despite reports to the contrary, interest in the game remains strong among 18-34 year-old “Millennials.” More than 28 million Americans who don’t play are “very” or “somewhat” interested in playing golf now. More than 12 million of those are of Millennial age. Millennials make up 25% of all golfers (6.2 million) and spend more than $5 billion annually on playing fees, equipment and apparel.

F. Estimated Golf Entertainment Venue Support from Area Hotel Properties The NGF has documented 15,000+ total lodging units in the Coachella Valley with 59% annual occupancy. A subset of this large hotel market is the 1,507 total lodging units on the IWGR campus, and the proximate resorts of La Quinta and JW Marriott. Considering the 365-day year, there are a total of 550,000 available room nights within the IWGR each year. Assuming participation at a golf entertainment venue of about 10% for the IWGR and 0.5% for the greater Coachella Valley, the following estimate can be made for participation for the new venue:

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 19 51 Estimated Hotel Support for new IWGR Entertainment Venue

Coachella Valley IWGR Total High-Season Available Room Nights 1,825,000 180,800 X high-season occupancy 70% 75% Total Low-Season Available Room Nights 3,650,000 369,200 X low-season occupancy 50% 54% Total Annual Occupied Room Nights 3,100,000 335,000 Venue Participation 0.5% 10.0% Estimated Potential Visitor Demand (Visits) 15,500 33,500

The estimate for potential visits from hotel visitors in the area could be as high as 49,000+, with half coming from the IWGR and half from other Coachella Valley hotel properties. This is based on the assumption of a local IWGR capture rate of 10.0% (100 per 1,000 room nights sold) and the broader regional capture rate of 0.5% (5 per 1,000 room nights sold). This estimate is supported by NGF survey results that show strong support for this golf entertainment concept and expectation to drive lodging activity (more in next section of this report).

G. Key Findings – IWGR Direct Competition In reviewing the local market of golf resorts in the Coachella Valley, the NGF team finds that while there is considerable direct competition for the IWGR components as they exist in 2016, there is no direct competition for the proposed addition as defined in this report. In our review of the local market of golf resorts, the NGF identified a few key findings and observations that relate to the continued operation of the IWGR, including some basic operating characteristics and of review of resident card programs at City-owned facilities in the valley. The table in Appendix B summarizes this information for the Coachella Valley golf courses that were cited most by IWGR customers in the NGF golfer survey when asked where else they play:

 The NGF Golfer survey results confirmed that two of IWGR’s three top competitors are the City of Palm Desert’s 36-hole Desert Willow, and the City of La Quinta’s 18-hole SilverRock Resort. Each of these is a high quality, well maintained layout that NGF considers to be among the finest courses in the Valley.  In addition to these two high-end municipal competitors, IWGR’s direct competition includes high quality resort courses, such as the La Quinta Resort; the PGA West Jack Nicklaus Tournament, Stadium, and Greg Norman Courses; and the Weston Mission Hills Resort Gary Player and Pete Dye Courses. The quality of the golf experiences at these facilities, and the high number of premium quality choices in the area, makes it necessary for IWGR to maintain a five-star experience to remain competitive.  Desert Willow has hosted between 83,300 and 89,000 rounds between 2012 and 2014. The City reported total operating revenues of $7.9 million in FY15, and total operating expenses of $8.3 million, resulting in an operating loss of about $410,000. However, subtracting out depreciation results in positive cash flow of about $877,000. Also, these figures do not include F&B and other miscellaneous revenues (F&B revenue was $2.7 million). Including these other revenues, the City’s CAFR showed and EBITDA (earnings before interest, taxes, depreciation and amortization) of more than $1.4 million.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 20 52  SilverRock annual rounds played between FY12 and FY16 were consistent (around 46,000), with the exception of FY15, when 9 holes were closed at times for work on the wash area, and only 38,383 rounds were played. The City’s CAFR reported total operating revenues of $3.62 million in FY16, and total operating expenses of $4.37 million. In FY16, the General Fund transferred $115,000 to the Golf Fund to support operations; the total outstanding advance due to the General Fund from the inception of the golf course is $5.36 million.  A $420 million master development plan for SilverRock has been completed and includes a 140-room luxury hotel, 200-room lifestyle hotel, conference facilities, mixed- use village, residential village, and permanent golf clubhouse. SilverRock’s back 9 holes is scheduled for a renovation in 2017 (delayed from 2016).  The Average Daily Rate (total green fee revenue divided by total paid rounds) for IWGR - $75 – is slightly higher than that of Desert Willow ($73) and SilverRock ($69), despite the lowest resident rate, longest residence advance tee time policy and highest share of resident rounds. IWGR’s superior quality and service and effective use of dynamic pricing have allowed it to charge the highest non-resident rates and still maintain high activity levels.  Of the key competitors, all but Eagle Falls have adopted dynamic pricing, with green fees determined based on factors such as current weather conditions, demand and time of day/year. For non-residents, IWGR has the highest green fees among this competitive set, befitting its five-star resort status and quality.  The general mix of amenities among these competitors is comparable, with the IWGR support facilities (clubhouse) setting the standard for excellence among public courses within the Valley. While there are some non-golf amenities present within these other resorts (putting courses, lawn activities, etc.), the golf entertainment venue proposed for IWGR would provide a truly unique offering that can create a strong market competitive advantage for the IWGR going forward.

Resident ID Cards One common aspect of municipal golf in the Coachella Valley is discount programs for City residents. As noted previously, the City of Indian Wells maintains a $35 green fee for all residents and reserves a segment of tee times for City residents. In our review of this program, the NGF looked at resident card fee and benefit information for several Coachella Valley cities, including Indian Wells (Indian Wells Golf Resort), Palm Desert (Desert Willow GC) and La Quinta (SilverRock Resort). A summary of the data collected is shown in Appendix C, with a summary of findings noted below:

 ID Card Fees: . Indian Wells - There is no charge to Indian Wells residents for the ID Card. . La Quinta - La Quinta residents renew at $150-card good for 3 years. . Palm Desert - Residents pay $10 processing fee each year.  Advance tee time policy: . Indian Wells – up to 14 days for Indian Wells residents. . La Quinta - up to 3 days for La Quinta residents. . Palm Desert - up to 3 days for Palm Desert residents.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 21 53  Green fee discount and other golf benefits: . Indian Wells - $35 year-round, in perpetuity (non-resident fee is up to $199 in peak season). Accompanied resident guest pays $45-$80 (depending on season), + 20% off merchandise, food & non-alcoholic beverage. . La Quinta - $30 (off season) up to $55 peak season (non-resident rate = $170 peak season). Accompanied guests (up to three) get 30% off posted rates. 15% off food at Grill Room, 15% off of non-discounted merchandise. . Palm Desert - $50 year-round (non-resident fee is up to $185 in peak season). See more below on Palm Desert resident rates.*  City of Palm Desert Resolution – With the opening of Desert Willow in 1997, the City Council established the resident golf rate at $45 per round, where it remained until 2013. In 2013, Council approved a resolution to establish a policy whereby yearly rate adjustments could be made based on the annual CPI (only by whole dollar increments). The first increase was to $48, with two subsequent increases bringing the current fee to $50. In bringing the resolution, City staff cited the fact that residents accounted for 20% of rounds, and with rapidly rising average cost per round (rose from $69 in FY 11 to current $108 in FY 16), resident subsidy is estimated at $58 per round.

H. Market Analysis Summary The NGF market analysis shows that golf is an important component in the overall Coachella Valley and Indian Wells offering, and there is strong demonstrated demand for golf in the local market. As such, the NGF has a reasonable expectation that the market will provide support for additional investment in new golf-related recreational/entertainment amenities. Other key findings from NGF’s market analysis include:

 The Greater Palm Springs area market draws about 13 million visitors every year, supporting 15,000+ hotel rooms with more on the way. These visitors also bolster the large golf economy in the valley, estimated to be as large as $745 million per year by Tourism Economics. These tourists are expected to provide considerable support for a new golf entertainment venue to be added at IWGR.  There are several entities actively working to promote the Palm Springs area and putting resources behind campaigns to attract additional visitors to the area. These efforts indicate that market area visitation will continue to grow in the coming years, adding even more support for new investment in new golf facilities.  The demographic characteristics (age, income, ethnicity) of the permanent and seasonal residents of the local market area are consistent with strong golf participation, and these residents are also expected to be a key component of demand for a new golf entertainment concept to be added at the IWGR.  The subject IWGR compares favorably to its most immediate competition in terms of quality of amenities and overall value for services offered. The high quality of service and facilities provides a strong competitive advantage for IWGR, and sustaining this level of facility quality and service will be key to preserving future economic performance at IWGR. Other communities in the Valley are also subsidizing golf facilities, and there is growing pressure for Valley communities to change liberal resident fee and access policies at public golf courses.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 22 54 V. REVIEW OF OTHER GOLF ENTERTAINMENT CONCEPTS In considering the development of a new golf entertainment venue for the IWGR, NGF has reviewed a selection of other similar ventures that have been developed around the country. The most significant of these is Topgolf, an international company that has developed many successful such facilities under the “Topgolf” brand with a high level of economic success. Several other upstart companies have tried to match the success with comparable facilities of their own, as detailed later in this section.

A. Topgolf Sources: Various articles; Topgolf International; Callaway Golf Company June 2016 Investor Presentation

Topgolf is essentially a combination driving range/sports bar/nightclub that is one of the fastest- growing recreational entertainment chains in the U.S. The customer base is diverse, with families, couple on dates, work buddies, bachelor parties, etc., but in the evening it is a heavily millennial-oriented clientele eating, drinking, watching sports, enjoying music, socializing and hitting golf balls, all without moving from their hitting bay. Overall, Topgolf reports that 68% of its customers are in the 18-44 year-old age group.

Topgolf, Las Vegas, Nevada

The first Topgolf opened in 2000 in Watford, England, a suburb of London, inveneted by two brothers with a passion for golf. The “Top” in “Topgolf” represented “target oriented practice.” The private equity fund WestRiver Group created Topgolf Entertainment Group and paid a licensing fee to bring the concept to the U.S. The first American venue opened in Alexandria, Va. in August, 2005, and locations in Dallas and suburban Chicago followed in 2007. These first sites were small and much less refined that the current prototype, but by the end of 2008 the company had almost 700 visitors per day at its U.S. venues.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 23 55 In 2009, the company designed a prototype for future locations, which would comprise three levels and ± 65,000sf Motion-sensing ball dispensers were added to each bay, which also include flat screen HDTVs (± 200 total in facility) and mini-lounges. The facilities integrate golf, gaming, entertainment and sports viewing. The new prototype includes full-service restaurant, multiple bars, rooftop terrace, 3,000sf private event space, pool tables, shuffleboard and more. The first new-generation venue opened in Allen, Texas, a suburb of Dallas, in 2011. Since then, Topgolf has opened 23 venues, including the Las Vegas location, featuring two swimming pools and a concert hall, in May 2016.

More than half of Topgolf’s locations have opened since the beginning of 2015, and the 25 locations host more than 8 million annual guests. In 2016, the company arranged for an additional $275 million in financing to build 7 to 10 locations a year. Depending on market and size, each Topgolf costs an estimated $20 million to $25 million to build and equip, exclusive of land costs (approximately $200,000 per bay).

Some general findings and observations about the Topgolf venture and how this can impact a potential venue with similar amenities in IWGR:

 The typical Topgolf has three levels and 102 hitting bays, each of which seats 6-8 (depending on location). During the evening peak hours, it is common for the wait to exceed 2 hours. Hourly rates range from $25 to $45, plus each player’s Topgolf membership card (one-time lifetime fee of $5) to record playing time.  Topgolf utilizes a patented RFID chip-in-ball technology for golf ball tracking, and awards points based on the distance and accuracy of the shot. The tee looks out at 215 to 250 yards of artificial turf bounded by nets on each side of ± 150 feet. The landing area includes several targets that include electronics to read the chips in the golf balls and award “points” for goof shots. After each shot, a screen reports where the ball landed, the yardage, and the points scored.  Ultimately, Topgolf is more about fun than competition. The activity removes most of the barriers that preclude traditional golf from being fun for many people, especially beginners, and the experience is equally appealing to golfers and non-golfers (70% of its customer base, according to Topgolf International) alike, including those interested in playing the game but not sure how to get started. For these people, it’s all about the enjoyment derived from socializing and hitting the occasional good shot.  Average revenue per site is $11 to $12 million; total revenue in 2015 was about $300 million, and may reach about a half-billion dollars in 2016. Assuming an average of 100 bays per facility, the typical Topgolf generates about $110,000 per bay annually, or ±$300 per bay per day.

Topgolf and Coachella Valley Topgolf has publicly expressed interest in the Coachella Valley market. In an article appearing in Palmspringslife.com in the fall of 2016, it was reported that Topgolf is investigating the feasibility of building a venue somewhere in the Valley, possibly as soon as 2018. No details are available, but the COO of Topgolf International in Dallas, says the Coachella Valley is a prime candidate for one: “Our interest level is certainly higher than before; the more we explore [the Coachella Valley market], — the more we learn, the more we see it - the more we like it. We’re still getting our arms around exactly where in the valley we would want to go, where along Interstate-10 we are really looking so we can maximize our reach.”

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 24 56 B. Other Topgolf-Inspired Concepts As a result of its popularity and success, Topgolf has inspired a number of new golf driving range-related concepts that are essentially” variations on a theme”, combining hitting a golf ball, food & beverage, interactive gaming, music and a social atmosphere. The table in Appendix D summarizes each of these concepts, including general description, key features, technology, size, and estimated cost to construct. NGF interviewed high level representatives from several of these companies. Key takeaways include:

 Of the new concepts NGF investigated as part of this study effort, only one – Flying Tee in Tulsa, OK – has actually opened, while two others (4ORE in Lubbock, TX and Drive Shack in Orlando, FL) have broken ground. Finally, two others – SpotGolf and RealiTEE – are still seeking financial partners and vetting potential locations.  One or more of these concepts/companies may represent a public-private partnership opportunity for the City of Indian Wells, should the results of NGF’s feasibility study show that a driving range entertainment venue at IWGR shows realistic potential to generate significant net positive operating cash flows.  At least two of the companies we spoke to - Spot Golf and RealiTEE – indicated that their building concepts are scalable, and can be adapted to smaller footprints. (These two are also open to potential public / private partnership).

VI. NEW GOLF ENTERTAINMENT AMENITY AT IWGR – PRELIMINARY PROJECTIONS The NGF has created a preliminary estimate of potential operating performance of the proposed IWGR Golf Entertainment Venue concept based on our initial market review. It is important to note that these initial projections of economic performance have been prepared based on actual operating inputs from comparable facilities nationwide, and assume the highest level of quality in design, construction and operation. This projection has been prepared to provide the City with a “reasonable estimate” of possible performance of a facility like this to be located on the IWGR campus on property currently occupied by the golf club driving range, and including all key facility elements as described earlier. NGF projections are supported by:

 Strong support for the venue from NGF surveys  Proven historical success of similar ventures  The large market of 13 million tourists to Greater Palm Springs  The proximity to 1,500+ hotel rooms in IWGR, plus La Quinta and JW Marriott  The 16 million of adult population within 150 miles of this facility

A. Preliminary Assumptions NGF has created a cash flow model for the operation of the IWGR Golf Entertainment Venue facility for its first six years of operation. The estimate of activity, revenue and expense shows the projected cash flows for the full operation through Year 6, assuming a “standard” market environment over that period, with no significant changes to observed local patterns in the economy, residential development, visitation, seasonal activity or demographics. The base assumptions in preparing this financial performance estimate include:

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 25 57  The overall economic condition remains stable, without any sizable increase or decrease in the Greater Palm Springs area economy, employment, or visitation, and that no other comparable golf entertainment venue is developed in the Valley.  The IWGR Golf Entertainment Venue facility is developed completely as described earlier in this report, with appropriate design and high quality materials.  The facility will incorporate the appropriate full-service food and beverage operation, complete with table service, bayside service, bar/lounge area and meeting rooms.  The facility is developed at the selected IWGR driving range site, with a total of 54 hitting bays on three levels (18 each level) and include flexibility to create private group areas within the defined hitting bays as described earlier.  All 54 bays will include some form of tracking technology (possibly Trackman ®) that can be used to follow golf balls and provide real-time displays on a TV screen inside each bay. This technology will be used to create interesting games for competition, or to allow patrons to create their own games and contests.  The IWGR operator and the City will heavily market the new entertainment venue, both in its early development stages, while under construction (i.e. “coming soon”), and upon opening (“grand opening”). NGF has assumed a marketing and advertising budget for the facility beginning at $125,000 for the first year of operation, in addition to the existing IWGR marketing and advertising budget. NGF typically recommends golf facilities have marketing budgets of 2% of total revenue, and a $125,000 budget is more like 3.5% to 5.0% in the early years. NGF has assumed that this marketing will include TV, radio, internet, social media, billboards, printed materials, and the continued employment by IWGR of a full-time sales and marketing coordinator.  There will be a gradual “ramp up” period for the new facility as it gains traction in the market. NGF expects total activity and revenue in Year 1 to be about 75% of more stable activity that will come in 2-3 years. NGF is projecting the property to reach a level of stability by the third year (Year 3) of operation.

B. Activity Projection Inputs Ultimately, all revenue will be derived from total hours sold for golf bay use and all ancillary revenue derived per visit. Key assumptions in projecting activity (hours and visits):

 The IWGR Golf Entertainment Venue activity will be divided between daytime activity (off-peak – typically younger patrons) and evening activity (peak – typically young adults). NGF has assumed 8 hours per day off-peak and 4 hours per day as peak.  The annual activity of total hours sold will be divided between a 120-day prime season (January – April) and a 245-day off-prime season (May – December).  The NGF is projecting 73,000+/- to 96,000+/- total annual visits to the facility in the first three years of operation, with 1.5 hours of bay time per visit. Activity is also divided between golf visits (patrons who participate in golf) and non-golf visits (those who only consume F&B). NGF assumes 0.25 non-golf visits for each golf patron. Our projection for source of activity:

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 26 58 Estimated Total Visits by Category

Low Estimate High Estimate IWGR Hotel Guests 25,000 33,000 Other GPS Resort/Hotel Guests 12,000 16,000 Indian Wells Residents 4,000 5,000 GPS Residents 18,000 24,000 Groups, Conventions, Events 11,000 14,000 Day-Trip Market 3,000 4,000 Projected Total Visits 73,000 96,000

 The new venue will have an inexpensive ($5 one-time fee) “game” membership to be sold to each golf patron for use in participating in game activities.  Activity at the facility will include individual patron activity, as well as a large group, banquet and event activity component. NGF has assumed that all participants in group or event activities will spend at the basic average rate presented later in this section. There will be additional room rental charges for groups; NGF assumes three (3) such events each week throughout the year.  The Venue will include a golf lesson program with at least 2-3 bays in the facility reserved for use in golf training. In the table below, the NGF shows our initial projections of the input variables that drive the activity and modeled financial projections:

IWGR Golf Entertainment Venue Projected Economic Performance NGF Estimated Inputs Activity Inputs Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 No. of Bays 54 54 54 54 54 54 Off-Season Days Open 245 245 245 245 245 245 Peak Season Days Open 120 120 120 120 120 120 Hours Open - Peak 6 6 6 6 6 6 Hours Open - Off Peak 8 8 8 8 8 8 Avg. Hours per Visitor 1.5 1.5 1.5 1.5 1.5 1.5 Non-Golf Visits 0.25 0.25 0.25 0.25 0.25 0.25 Total Hours Capacity (Peak Season) 90,720 90,720 90,720 90,720 90,720 90,720 Total Hours Capacity (Off-Peak) 185,220 185,220 185,220 185,220 185,220 185,220 Peak Season Utilization 45.0% 50.0% 55.0% 55.0% 55.0% 55.0% Off-Peak Utilization 25.0% 30.0% 35.0% 35.0% 35.0% 35.0% Blended F & B COS 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% Lesson Commissions 80.0% 80.0% 80.0% 80.0% 80.0% 80.0% Merchandise COS 65.0% 65.0% 65.0% 65.0% 65.0% 65.0% Inflation Prices 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% Expenses 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 27 59 Projected Activity Projected Peak Season Golf Visits 27,200 30,200 33,300 33,300 33,300 33,300 Projected Off-Season Golf Visits 30,900 37,000 43,200 43,200 43,200 43,200 Projected Non-Golf Facility Visits 14,500 16,800 19,100 19,100 19,100 19,100 Total Projected Facility Visits 72,600 84,000 95,600 95,600 95,600 95,600 Peak Hours Sold (Peak Season) 17,500 19,400 21,400 21,400 21,400 21,400 Off-Peak Hours Sold (Peak Season) 23,300 25,900 28,500 28,500 28,500 28,500 Peak Hours Sold (Off-Season) 19,800 23,800 27,800 27,800 27,800 27,800 Off-Peak Hours Sold (Off-Season) 26,500 31,800 37,000 37,000 37,000 37,000 Lesson/Program Activity (3-4% Golf Visits) 1,743 2,352 3,060 3,060 3,060 3,060 Banquets/Parties 156 156 156 156 156 156 Member Card Sold 24,200 16,800 9,560 9,560 9,560 9,560

C. Fees, Charges and Average Rate Inputs Income for the new IWGR Golf Entertainment facility will produce revenue from member card sales, per hour bay rental, lesson activity, room rentals, merchandise, and food/beverage sales. Key assumptions in projecting fees, charges and average revenues:

 NGF has assumed a 1.5% rate of inflation for the projection of all prices and average revenues for years1-6.  The membership cards will cost $5.00 per card, and include access to all technology and game centers associated with bay rentals.  Average hourly rates for bay rentals have been estimated based on comparable facility prices in other similar markets such as Arizona, Florida and Southern California. The pricing is divided into four categories, including the peak and off-peak times of day, as well as in season and off season. The figures presented represent average hourly rates for each person/visit for each golf bay, with some minor variation expected in each category to account for certain discount pricing (i.e. junior, group, party, etc.). The average rates shown also reflect the average party size of 3.5 persons at peak (evening) hours and 2.0 at other times.  The lesson rate is projected as an average rate for a full one hour lesson, but can be discounted to account for shorter lesson terms if desired. Average room rental rates are for private party rooms and would be collected in addition to hourly rates for each patron bay used and all ancillary spending.  Total average spend-per-patron on food and beverage is based on data from comparable facilities as profiled earlier in this report. All F&B spending is assumed to be divided between food sales and both alcoholic and non-alcoholic beverages. Total F&B spend is estimated at $12 per visit, increasing to $19.39 by the 6th year of operation.  The Venue will include a small retail shop producing a modest amount of retail sales separate from the main pro shop in the IWGR. NGF assumes only $0.75 per visit in merchandise sales in Year 1 of operation. In the table below, the NGF shows our initial projections of average rates to be charged for golf bay use and expected average spend per facility visit:

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 28 60 IWGR Golf Entertainment Venue Projected Economic Performance Schedule of Fees and Average Revenue Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Member Card Sales Card Sales $5.00 $5.08 $5.15 $5.23 $5.31 $5.39

Bay Rental (per person per Hour) Peak Season Peak Hours $9.00 $10.00 $11.00 $11.17 $11.33 $11.50 Peak Season Off-Peak Hours $13.00 $14.00 $15.00 $15.23 $15.45 $15.69 Off-Season Peak Hours $11.00 $12.00 $13.00 $13.20 $13.39 $13.59 Off- Season Off-Peak Hours $13.00 $14.00 $15.00 $15.23 $15.45 $15.69 Average Lesson Rate $25.00 $25.38 $25.76 $26.14 $26.53 $26.93 Avg. Banquet / Parties Room Rental $500.00 $507.50 $515.11 $522.84 $530.68 $538.64 Other Revenues (Avg. per Visit) Food Sales $4.00 $5.00 $6.00 $6.15 $6.30 $6.46 Beverages (Non-Alcoholic) $3.00 $3.50 $4.00 $4.10 $4.20 $4.31 Beverages (Alcoholic) $5.00 $7.00 $8.00 $8.20 $8.41 $8.62 Merchandise $0.75 $0.77 $0.79 $0.81 $0.83 $0.85 Other $0.25 $0.26 $0.26 $0.27 $0.28 $0.28

D. Projected Operating Expense Assumptions Total expenses required to operate the new golf entertainment amenity are estimated by NGF and shown in the projected income for the facility. The expenses assumed by NGF are those expected to be in addition to existing expenses to operate the golf club and clubhouse at IWGR. Some of these expense estimates are lower than comparable facilities reviewed, as NGF has assumed that some of the existing staff and expenses could be incorporated into the new amenity operation. Key expenses related to administration, F&B managers and a senior marketing professional are already in the IWGR budget and assumed to overlap with the new amenity. Overall, the fixed expenses are expected to conform to the following general schedule prepared by NGF:

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 29 61 Range Operations

Salaries & Wages Full-Time Employees Range Manager $60,000 Assistant Golf Professional @ $45,000 45,000 Benefits & Taxes @ 33% 35,000 Part-Time Labor Shop Clerks, range associates, etc. 120,000 (8,000 hours @ $15.00/hr.) Other Range Operating Expenses Supplies & Materials 50,000 Ball & mat replacement 25,000 Professional Services, fees + charges 20,000 Miscellaneous 15,000 Total Range Operations Expense $370,000 Range & Building Maintenance

Salaries & Wages Full-Time Employees Building Superintendent $60,000 1 Mechanic 45,000 Benefits & Taxes @ 33% 35,000 Part-Time Labor (4,000 hours @ $15.00/hr.) 60,000 Other Range Operating Expenses Supplies & Materials 100,000 Netting replacement 50,000 Professional Services, fees + charges 20,000 Miscellaneous 20,000 Total Range & Building Maintenance Expense $390,000 Fixed Food & Beverage

Salaries & Wages Full-Time Employees Asst. F&B Manager / Head Bar Tender $50,000 Kitchen Manager 45,000 2 Chef @ $35,000 70,000 Benefits & Taxes @ 33% 55,000 Part-Time Labor Hostess, bar, servers, kitchen, bus, etc. 240,000 (16,000 hours @ $15.00/hr.) Other Range Operating Expenses Supplies & Materials 80,000 FF&E replacement 60,000 Professional Services, fees + charges 20,000 Miscellaneous 20,000 Total Fixed F&B Expense $640,000

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 30 62 Other key assumptions in projecting direct on-site expenses for the new facility include:

 Utilities – This type of range operation typically draws considerable power usage. NGF review shows historic utility expense close to $3,000 per hitting bay per year, or $175,000 for the facility. This amount includes all utilities associated with each hitting bay and all ancillary (F&B, services, etc.) consumption.  Sales & Marketing – NGF has assumed a marketing budget starting at $125,000. This amount was intended to be in addition to the large existing IWGR marketing budget, but assumes one additional staff member and the current Sales & Marketing Manager assuming the responsibility of marketing the new range facility.  Technology – NGF has assumed the use of the Trackman ® system in each bay at the new IWGR range facility, or some type of similar concept with comparable performance. These systems have an initial start-up cost that was included in the NGF development capital estimate, but also include an annual user / license fee that we have assumed to be about $2,000 per station per year ($110,000).  Maintenance & Repairs – Additional expenses to repair and maintain the high-tech aspect of the range operation and keeping all hitting bays in the highest working order. NGF estimate of $125,000 per year.  Contingency – In keeping with the conservative posture of the NGF projections, our team has assumed an operating expense contingency of five percent (5.0%) of all operating expenses (excluding cost of sales).

E. NGF Projected Economic Performance (Year 1-6) The table below shows the NGF-projected revenue and expense performance for the new golf range venue at IWGR for its first six years of operation, based on the assumptions noted above. All figures have been rounded to the nearest $100 for simplicity in reporting.

IWGR Golf Entertainment Venue Projected Cash Flow Analysis Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 REVENUES: Total Bay Rentals $1,022,700 $1,287,400 $1,579,300 $1,603,000 $1,627,000 $1,651,400 Total Food Sales 290,400 420,000 573,600 587,900 602,600 617,700 Total Alcohol Sales 363,000 588,000 764,800 783,900 803,500 823,600 Total Beverage Sales 217,800 294,000 382,400 392,000 401,800 411,800 Total Merchandise Sales 54,500 64,600 75,300 77,200 79,100 81,100 Total Member Cards 121,000 85,300 49,200 50,000 50,700 51,500 Total Lesson/Program Rev. 43,600 59,700 78,800 80,000 81,200 82,400 Total Banquets/Parties 78,000 79,200 80,400 81,600 82,800 84,000 Other 18,200 21,500 25,100 25,700 26,400 27,000

TOTAL FACILITY REVENUE $2,209,200 $2,899,700 $3,608,900 $3,681,300 $3,755,100 $3,830,500 Total Rev. / Visit $30.43 $34.52 $37.75 $38.51 $39.28 $40.07

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 31 63 Less: Direct Costs Blended F & B (35%) $304,900 $455,700 $602,300 $617,300 $632,800 $648,600 Lesson Commissions (80%) $34,900 $47,800 $63,000 $64,000 $65,000 $65,900 Merchandise (60%) 35,400 42,000 48,900 50,200 51,400 52,700 Total Direct Costs $375,200 $545,500 $714,200 $731,500 $749,200 $767,200

TOTAL NET REVENUES $1,834,000 $2,354,200 $2,894,700 $2,949,800 $3,005,900 $3,063,300

EXPENSES: Range Operations $370,000 $381,100 $392,500 $404,300 $416,400 $428,900 Range & Bldg. Maintenance 390,000 399,800 409,800 420,000 430,500 441,300 F&B Expense 640,000 656,000 672,400 689,200 706,400 724,100 Utilities 175,000 179,400 183,900 188,500 193,200 198,000 Sales & Marketing 125,000 128,100 131,300 134,600 138,000 141,500 Maintenance & Repair 125,000 128,100 131,300 134,600 138,000 141,500 Technology 110,000 112,800 115,600 118,500 121,500 124,500 Contingency (5%) 97,000 99,000 102,000 104,000 107,000 109,000

TOTAL EXPENSES $2,032,000 $2,082,500 $2,135,100 $2,187,900 $2,243,100 $2,298,600

Operations Profit ($198,000) $271,700 $759,600 $761,900 $762,800 $764,700

Annual Capital Upgrade $25,000 $40,000 $50,000 $50,000 $50,000 $50,000

Expected Net Income ($223,000) $231,700 $709,600 $711,900 $712,800 $714,700 Net Income Margin -10.1% 8.0% 19.7% 19.3% 19.0% 18.7%

F. Summary of NGF Projections The NGF estimates of future performance of the proposed new golf entertainment amenity at IWGR shows the potential to generate substantial direct revenue, reaching as high as $3.85 million+ after five years of operation. However, given the newness of the offering and the need to build a market share over time, the NGF expects that it will take 2-3 years to build to this level of revenue support, and revenues could be as low as $2.2 million in the first full year of operation. Considering all expenses that will be required to sustain this new venue, the net income available to the City from this venture is not expected to be reach stabilization until the third year (Year 3) of operation, with net income stabilizing at about $710,000+/- by the third year of operation.

The improvements proposed for IWGR will clearly go a long way to keeping this resort golf facility relevant in the greater Palm Springs resort golf market, and add appeal to the City and its resort resulting in increased hotel stays and the collection of TOT (not included in NGF projection). The above projection is intended to provide the NGF opinion on new facility performance and does not include other sources of incremental revenue for IWGR that may result from this addition, such as more golf rounds or increased business at the VUE Restaurant. The NGF is projecting a total revenue at stabilization of about $66,667 per hitting bay per year. This level of revenue is the equivalent of about 76% of the revenue generated by the lowest level of Topgolf facility (“Generation 1”) that includes upwards of 96 total hitting bays. Given the location and size of the facility, the NGF team expects this to be an appropriate estimate of performance.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 32 64 G. Limiting Conditions The income estimates presented by NGF have been prepared based on existing and projected market conditions, the quality of the proposed subject golf entertainment venue and the actual performance of comparable facilities nationwide. Particular focus was paid to the proposed mix of amenities and its fit with the existing IWGR program. Proper uses of the NGF estimates include:

 Establishing reasonable parameters for expected performance for the subject facilities after new amenity addition  Determining an appropriate level for new capital investment the facility can support  Establishing the basis for financing determinations  Providing guidelines for realistic expectations of income and expense

NGF Consulting is confident that a new golf entertainment amenity of this type and at this location will have impact in this market. From a practical standpoint, those managing the facility will need to respond to variable market conditions as well as unforeseen maintenance needs. NGF Consulting is confident that the facility will be able to continue to achieve results as presented in our analysis beyond the next five years of operation.

When projecting a realistic use and revenue estimate for a proposed new entertainment venue to be added to an existing golf resort, it is important to realize that the actual activity to be generated by the venue in any given year may be lower than the market opportunity appears to suggest. It is typical for any type of new public access golf facility to achieve only a portion of its total potential, especially in the early years. Our estimates of performance for this new golf entertainment venue at IWGR could change should the following conditions occur:

Stronger Performance Weaker Performance

Faster population growth than projected Additional golf entertainment amenity in GPS

Positive regional publicity Incorrect price levels

Unforeseen surge in GPS visitation Poor customer service

Increased curiosity among regional visitors Poor facility quality

Addition of other new attractions at IWGR Regional economic recession

Excellent yearly weather conditions Poor yearly weather conditions

It is important to measure the performance of the City’s municipal golf assets in such a way as to help the City make financial decisions based on realistic expectations. It is obviously possible that this new amenity can produce activity and income either better or worse than NGF has projected. As we have noted, we do anticipate that the uniqueness of this venue for the Palm Springs market will lead to strong support and revenues comparable to NGF projections. Still, in planning its strategy, the City of Indian Wells should consider the possibility that the venue will not be well accepted and how this may impact the investment that will be required to bring the facility to fruition.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 33 65 NGF Market Survey Results

In reviewing the IWGR and in consideration of new amenities/activities that may be added to the facility, the NGF team conducted several surveys to help gauge opinions among various sub- groups that may be impacted by changes at the City’s golf resort. The NGF completed four total surveys, including a survey of IWGR golfers, Greater Palm Springs area visitors, Travel Professionals and Meeting Planners, and visitors to Indian Wells. The results of each of these surveys and a summary of key findings in presented below.

I. IWGR GOLFER SURVEY The NGF conducted a web-based survey of 423 IWGR golfers in September of 2016. This survey is not intended to be a scientific study of Indian Wells golfers, but rather to provide a small sample of golfers to provide a general opinion on some key attributes of the City golf operation. The NGF survey is used by hundreds of courses across the country, allowing us to compare results from IWGR with other similarly priced courses nationwide. A copy of the survey instrument is displayed in Appendix E, with general findings shown below.

Of the survey group, 12.5% of respondents described themselves as Indian Wells year-round residents, 8.5% as Other Coachella Valley year-round residents, 23.4% Indian Wells season residents, 15.8% as other Coachella Valley seasonal resident, 9.5% as a visitor – typically stay at Indian Wells Golf Resort and 30.3% as a visitor – typically stay elsewhere in Greater Palm Springs/Coachella Valley.

A. Summary of Findings 1. Overall satisfaction with IWGR is generally good compared to other Premium priced facilities (peak green + cart > $70+). Other Coachella Valley seasonal resident players produced the lowest satisfaction rating (8.4), while Indian Wells year-round resident players had the highest (9.1). Satisfaction was fairly consistent across age groups, with younger adult golfers (age 40-49) older golfers showing the highest satisfaction with IWGR.

2. The factors that showed highest level of satisfaction are related to friendliness/helpfulness of staff, golf course design/layout and overall course conditions. Factors that rated lower on satisfaction included pace of play and overall value.

3. The profile of the IWGR survey respondent was predominantly male (87%) and generally older (90% over age 50 and 63% over age 60). This compared to a national benchmark of 85% male and 60% over age 50.

4. Other Coachella Valley golf courses cited most by IWGR customers when asked where else they are playing rounds include: Desert Willow (30%); Classic Club (26%); SilverRock Resort (25%); PGA West Norman Course (16%); PGA West Stadium Course (16%); La Quinta Resort Course (13%); Eagle Falls Golf Course (13%); Westin Mission Hills Resort Player Course (12%) and Dye Course (11%); and Shadow Ridge Golf Resort (12%).

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 34 66 B. Custom Questions 1. In terms of overall satisfaction with the availability of food & beverage (F&B) service between the front and back 9 holes of the golf courses, on a five-point scale ranging from ‘Excellent’ to ‘Unsatisfactory’, with ‘Satisfactory’ as the midpoint choice, 55% of respondents answered ‘satisfactory’, with 29% answering better than satisfactory (top two choices), and only 16% less than satisfactory (bottom two choices).

2. For those golfers desiring F&B service between the front and back 9 holes, a little more than half (217 responses) patronize only the beverage cart, while 19% go in to the IW Café, and 9.5% to upstairs to the VUE Grill & Bar.

3. Nearly 74% of golfers support one of the F&B establishments at IWGR after their round (9.5% IW Café and 64.2% VUE Grill and Bar).

4. For overall satisfaction with the availability of F&B service after the round is completed, 36.5% of respondents answered ‘satisfactory’, with just over 50% answering better than satisfactory (top two choices), and only 13% less than satisfactory (bottom two choices).

5. Respondents were asked to describe ‘What would you like to see for F&B service between the front 9 and back 9 holes?’ NGF noted the following most frequent response themes (183 total responses): . More quick choices / Grab and go (esp. fresh sandwiches, hot dogs) . Reopen the snack shack or create other turn service . Set up BBQ grill near starting holes . Healthier options . Better value . Faster service 6. NGF described the potential driving range entertainment venue to the golfer sample. About 57% of respondents indicated that “no”, they did not anticipate patronize such a facility, 30% answered that they would use the venue, and about 13% were unsure.

7. When presented with a list of potential new amenities/activities that are being considered for IWGR (list in Appendix E), the majority of respondents (61%) indicated they were “Interested only in golf – no other activities.” The only amenities/activities chosen by more than 12% of the 383 respondents was Golf Teaching Academy, which was cited by 25% of golfers. Pickleball and Bocce, two amenities NGF was asked specifically to research, received 12% and 9%, respectively.

8. When pressed further, 50% of the respondents indicated that zip-lining would be disruptive to golf, and 8% indicated that pickleball would be disruptive to golf, the two most common responses.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 35 67 II. GREATER PALMS SPRINGS CVB VISITOR SURVEY In an attempt to gauge potential interest in the proposed new golf entertainment venue, as well as other potential amenities/activities, at IWGR, NGF solicited the help of the Greater Palm Springs Convention & Visitors Bureau (“CVB”) and the City of Indian Wells to distribute NGF web-based surveys to visitors of the Coachella Valley. Identical surveys were fielded to two separate databases: (1) the CVB visitor database; (2) the City of Indian Wells visitor database. Each of these samples comprised both golfers and non-golfers.

The surveys were not intended to be scientific studies of Coachella Valley/Indian Wells visitors, but rather to provide directional guidance on, among other things, how interested those sampled were in the potential new entertainment venue. A copy of the survey instrument is displayed in Appendix E, with general findings shown below.

A. Summary of Findings The surveys were distributed in November and early December of 2016. NGF received a total of 672 completed surveys. Key findings are summarized below:

General  Among survey respondents, the age group of 18-34 (i.e., “millennials”) was the by far the smallest group (2.5%), while the 50+ age groups accounted for 82.5%, 33.5% of them being 65 or older.  The zip code data shows about 29% of respondents visit from what NGF has defined as the “drive-in” market of between 50 and 249 miles from Indian Wells (takes in southern California, including greater L.A., Orange County, San Diego; Las Vegas; Phoenix/ Scottsdale). “Fly-in” visitors (250+ miles) account for 54.1% of the total respondents, while 17% are what NGF has defined as “locals”, coming from less than 50 miles away.  When asked “how often do you visit Greater Palm Springs/Coachella Valley” 45% of the survey respondents answered once or less per year, while 46% visit two or more times per year. Nearly one in four visits four or more times per year, while 8.4% have never visited Greater Palm Springs/Coachella Valley.  As noted previously, NGF expects that half or more of the customers for a new driving range entertainment venue would be non-golfers. With this in mind, the survey sample set up very nicely. Among respondents, 51.6% are golfers and 48.4% are not. (Of the survey’s golfers, 84.1% play golf while visiting Greater Palm Springs/Coachella Valley).  An overwhelming majority of respondents are satisfied with the entertainment choices in the area. When asked “how satisfied are you with the variety of amenities and things to do in Greater Palm Springs/Coachella Valley”, 95.6% answered “somewhat” (33.1%) or “very” (62.5%) satisfied.

New Range Entertainment Venue Specific questions were asked related to the consideration of a new entertainment venue in the Greater Palm Springs/Coachella Valley, featuring a high tech multi-level golf driving range with interactive games, food & beverage service, music and social atmosphere (concept was described within the survey instrument). Following are key NGF observations regarding survey responses on this topic:

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 36 68  When asked how interested they would be in visiting such a facility for either the golf driving range or simply to eat, drink & socialize, nearly 41% responded that they are “not at all” or “not very” interested. Of this group, disinterest increased with age, as nearly 1 in 4 of those over the age of 65 was not interested.  About 6 in 10 responders were “somewhat” or “very” interested in visiting the entertainment venue as described. . Of this group, the younger the responder the more interest they have in the venue. Though the smallest segment in the survey, the 18-34 year olds had by far the highest interest in the golf entertainment venue, at more than 82%. Overall, 70% of those under 50 years old were interested, compared to 51% of those older than 50. . About two-thirds of golfers and 53% of non-golfers are “somewhat” or “very” interested in the proposed golf entertainment venue.  When asked if the presence of this entertainment venue would favorably influence their decision to choose Palm Springs/Coachella Valley as a destination in the future, 31% answered “Yes, probably” or “Yes, definitely”. About 45% responded “No”, with 23% neutral (“Maybe”). . Yes responses were more popular with younger ages. Nearly 2/3 of the 18-34 age group and 50% of the 35-49 age group replied “Yes”, it would positively influence their decision to choose GPS/Coachella Valley in the future. . In terms of golfers and non-golfers, there was virtually no difference in the percentage that answered Yes” to this question.

Other Potential Amenities The survey sample was also provided with a list of other amenities/activities and asked what their level of interest is in using / participating in additional amenities/activities the next time they visit Greater Palm Springs/Coachella Valley.

 The top choices by percentage of respondents were: . Spa/fitness – 63.1% . Golf putting course – 52.9% . Themed mini golf – 52.5% . High-tech golf driving range – 48.6%

 The lowest ranked activities by percentage of respondents were: . Pickleball – 30.4% . Bocce – 35.4% . Yoga – 40.2%

 All other choices (Golf teaching academy, lawn activities, zip-lining, water slides, and tennis, in ascending order by percentage) were noted by between 41% and 47% of respondents.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 37 69 III. CVB TRAVEL PROFESSIONAL DATABASE SURVEY In addition, the CVB, on behalf of NGF, distributed a brief survey to travel professionals that book the Greater Palm Springs market. The travel professional survey went to about 450 top accounts – primarily golf package wholesalers and group/hotel/convention salespersons. The intent of this survey was to attain some qualitative opinions about the overall quality of available amenities and activities in the Coachella Valley, as well as about the proposed new golf entertainment venue. While only 21 responses were received, the NGF believes that the responses were useful in gaining directional guidance on where travel professionals stand on these issues (Appendix E).

A. Summary of Findings NGF key observations:

 Of the 21 travel professionals that responded, 20 market/book large groups and conventions.  The sample was asked “From a group sales/marketing perspective, how satisfied are you with the variety of amenities and things to do in Greater Palm Springs/Coachella Valley?” Of the responding professionals 26% indicated they are “somewhat satisfied” and 74% “very satisfied”. None indicated dissatisfaction.  The potential new golf driving range entertainment venue was described to the sample. When they were asked “How likely do you think that the presence of such a facility would make Greater Palm Springs/Coachella Valley a more attractive destination for leisure travelers and groups?”, only two respondents answered “not very likely”, while 42% said “somewhat likely” and 47% “very likely”.  An open-ended question asked “What other amenities/activities do you think might make Greater Palm Springs/Coachella Valley more marketable to leisure travelers and groups?” A few of the more compelling responses included: . “Please add Topgolf, it would be well received in Palm Springs I think!” . “If the venue you are referring to is a Topgolf, I would very much recommend it. Even as a non-golfer I have held events at the Topgolf in Roseville, CA and it is an absolute blast. It would be great for Palm Springs during the summer when it might be too hot to take to a course. Very entertaining!!” . “Greater airlift into Palm Springs. I just paid nearly $1000 roundtrip for a ticket to fly from San Francisco to Palm Springs which is outrageous and far too costly for most event budgets (per ticket). Great access to more flights would help solve this but I know you are under constraints of the traveling public and the airlines themselves.” . “Transportation from outlying resorts / hotels to downtown or airport.” . “Better airlift into Palm Springs.”

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 38 70 IV. OVERALL SURVEY RESULTS SUMMARY NGF notes the following key takeaways from the visitor and travel professional surveys:  NGF was encouraged by the good response to the CVB and City visitor databases survey, with 672 completed surveys at the time we analyzed the results. This level of input in larger than typical for NGF surveys of this type.  The proposed golf entertainment venue, as described, elicited a strong positive response, with 6 in 10 responders indicating they were “somewhat” or “very” interested in visiting the entertainment venue.  As expected, the highest levels of interest were exhibited by the younger age groups, which NGF views as another positive due to IWGR hotel operators’ indications to NGF that one of the desired outcomes of building a driving range entertainment venue at IWGR would be to enhance appeal of the resort property.  Another desired outcome from adding the subject entertainment venue would be to put more “heads on beds”, which would help the local economy in several ways, including increasing Transient Occupancy Tax (TOT) revenue. While the survey results cannot be used to draw firm conclusions about whether the venue would increase hotel stays, NGF believes the results are encouraging, as 31% of respondents said that the presence of the new golf entertainment facility would favorably influence their decision to choose Greater Palm Springs/Coachella Valley as a destination, and additional 23% answered that it may influence their decision.  The golf entertainment venue was as likely to draw non-golfers as golfers to the market, and the younger age cohorts are more likely to have their decision to visit the area influenced by the presence of the new amenity.  Though comprising a small sample, the travel professional survey elicited responses that were directionally positive about the potential addition of the new golf entertainment venue. Despite high overall satisfaction with the current activities and amenities available in Greater Palm Springs, all but two responding travel professionals thought that the new venue would make GPS/Coachella Valley a more attractive destination for leisure travelers and groups.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 39 71 Other Amenities Considered for IWGR

In addition to the proposed golf entertainment venue considered for inclusion at IWGR, the NGF has also reviewed several other options for new amenities that could be added to the resort property to potentially improve the overall economic picture for the City. In evaluating other potential amenities to be added to the resort, the NGF has considered:

1. Direct Economic Impact – Amenities that can generate direct revenue from consumer spending and/or user fees for participation in the new activity. 2. Indirect Economic Impact – New amenities that can be added to the resort that may not create direct spending, but could enhance existing revenue drivers for the City, such as hotel occupancy (TOT), green fee revenue and/or F&B revenue.

Another key element considered by NGF in this evaluation is the suitability, compatibility and space availability within the existing IWGR property. As such, the new amenities being considered must be able to fit within the defined space available for additional uses, be a general match to the existing program at IWGR and not be disruptive to ongoing activities at the resort. Compatibility with golf, pavilion activities (outdoor banquets, parties, events) and clubhouse activities was viewed as key in preparing this evaluation.

The NGF has also previously noted a limited amount of usable space within the defined IWGR club footprint. The NGF has focused this review on the golf club property, excluding amenities that could be added within the resort property reserved for the existing hotels, but not under direct City control. The space in and around the IWGR golf club area has been considered in this review, keeping in mind the suitability and compatibility issues noted earlier, as well as reasonable proximity to support services, such as F&B service, restrooms and parking.

I. REVIEW OF AMENITIES CONSIDERED FOR ADDITION TO IWGR

The NGF has reviewed seven specific amenities that could be considered for addition to the IWGR. These seven were chosen based on input from: City leadership and residents; IWGR staff; resort hotel operators and marketing staff; and NGF knowledge of recreation amenities commonly associated with higher-end golf resorts. A summary of each amenity is provided in the table in Appendix F. The amenities reviewed by NGF include:

1. Pickleball is a racquet sport with elements of badminton, tennis, and table tennis. This sport is growing in popularity, with over 4,000 locations to play in the U.S. according to the U.S. Pickleball Association (double from 2010). The spread of the sport is attributed to its popularity within community centers, physical education classes, YMCA facilities and retirement communities. The sport is growing in the Coachella Valley with several private member country clubs adding the sport as a new amenity within racquet sport offerings. There have been reports of noise complaints at various clubs and locations related to the playing of pickleball. 2. Bocce is a ball sport using multiple balls roiling on a defined court area. The game is popular within community centers and retirement communities, and is especially popular with organized leagues and regularly scheduled events. The game requires very limited space to play and is relatively inexpensive to create.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 40 72 3. Lawn Games – There are several lawn games that have become common in clubs and resorts, many of which do not require much space or expense to develop and operate. A lawn game includes any number of outdoor games that can be played on a lawn. Many types and variations exist, including games that use balls and the throwing of objects as their primary means of gameplay. The most popular forms include Lawn Bowling, Croquet and Corn Toss games. 4. Themed Miniature Golf - Miniature golf (a.k.a. minigolf or putt-putt) is an offshoot of the sport of golf focusing solely on putting. It is played on courses consisting of a series of holes (usually a multiple of 9) similar to its parent, but characterized by their short length (usually within 10 yards from tee to cup), the use of artificial putting surfaces such as carpet or astroturf, a geometric layout often requiring non- traditional putting lines such as bank shots, and artificial obstacles. When miniature golf retains many of these characteristics but without the use of any props or obstacles, it is purely a mini version of its parent game. Mini golf with specific themes includes surroundings or obstacles related to a particular theme (i.e. desert, tropical, city, animals, etc.). 5. A grass putting course provides a smaller version of golf using only a putter to advance a golf ball into a golf hole. The activity is similar to miniature golf except it is played on actual golf course turf maintained to a standard comparable to the championship regulation golf course. Creative layouts could include a sequence of separate putting green golf holes. The course would provide for an appearance of a golf course on a much smaller scale and with turf quality that matches a regulation golf course green. This amenity already exists at the IWGR club area. 6. Golf Schools / Teaching Academy– Golf school programs include the creation of golf playing education in an organized group setting with multiple points of teacher- student contact. The most successful golf schools are branded with famous name teachers and are held over an extended period of time, typically involving at least one overnight stay. 7. A zip-line consists of a pulley suspended on a cable and mounted on a slope. It is designed to enable a user propelled by gravity to travel from the top to the bottom of the inclined cable by holding on to, or attaching to, the freely moving pulley. Zip-lining has been growing in popularity and has become especially common for adventure- seeking patrons and in conjunction with nature and/or adventure related pastimes.

II. OTHER AMENITY SUMMARY The above list was not meant to be exhaustive, but does provide a good sampling of new amenities and activities that could be added to the IWGR to help improve the facility economics and increase property visitation. We note the variety of options and potential impacts, with some ideas leading to direct revenue, some leading to indirect revenue and others simply providing a new source of customer recreation. Further, we note that some of these concepts require considerable planning and investment in physical changes to complete, while others may only require programmatic changes to the existing IWGR offering. In considering the possible addition to IWGR, the NGF identifies the putting course (already in place) and golf school as requiring the least direct capital investment to implement, while the miniature golf and pickleball would likely have the highest direct expense, assuming the City would like to implement these new features at the highest level of quality and function to match the existing resort program.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 41 73 Summary of Findings

In summary, the NGF review shows the City of Indian Wells operating a high-quality, “5-star” resort facility that is not achieving its maximum revenue potential for several reasons, including the generous golf discount program to City residents (“resident amenity”). As a result, the City’s taxpayers support the IWGR operation and its high expense/service profile, contributing as much as $707,000 to support operational deficits in FY2016. Given this, the City is exploring ways to enhance direct revenue at the resort, while at the same time increasing visitation to the lodging establishments on site and bolstering the TOT revenue.

NGF has reviewed several options for new amenities that might be added to the IWGR, including a new high quality golf entertainment venue on the site of the existing driving range. The NGF has estimated that such a facility could be constructed at the IWGR for approximately $11.2 million, and could generate close to $4.0 million per year in revenue and $700,000+/- net income (after new expenses) per year at stabilization. NGF’s study indicates that the new entertainment venue will generate substantial net incremental income for the City, and provide a new amenity that would be a strong fit to the Indian Wells community and enhance the overall destination appeal of the City and IWGR. Other amenities or activities closely associated with golf (teaching academy, putting course, mini golf) would be stronger offerings than other ideas (pickleball, zip-line, lawn games, bocce) due to the lack of revenue in the non-golf concepts, the potential to disrupt golf and the limited space available to site these amenities.

I. POTENTIAL NEXT STEPS If the City decides to further pursue the new entertainment venue, we believe that some of the key next steps in the due diligence process should include:

 Identify Potential Funding Vehicles – With an estimated cost of about $11.2 million, this is obviously a serious consideration. Among the potential sources are (not mutually exclusive; could be a combination of two or more sources): . Use a percentage of the TOT, or increase the City’s current percentage (requires voter approval). . Add to current resort fees to offset some or all cost. . Public – private partnership, or even full private funding, with one of the golf entertainment concepts discussed in this report.  Identify and Speak with Potential Partners – Should the City decide that funding the project through the last option mentioned above is most palatable from a risk standpoint, the next step would be to initiate discussions with potential partners to find out what the potential partnership structures could look like.  Refine the Entertainment Concept – NGF has provided a basic program for the golf entertainment venue, comprising features and amenities that have proven highly popular with existing products. However, if the project reaches a formal planning stage, the concept will need refinement, perhaps with input from potential private partners. Should the City decide to create the program on its own (working with consultants), RFPs would ultimately be issued for various aspects of the work.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 42 74 Appendices

Appendix A – Golf Market Statistical Data

Appendix B – Local Resort Comparison Matrix

Appendix C – Resident Golf Benefit Matrix

Appendix D – Other Golf Entertainment Concepts

Appendix E – NGF Surveys

Appendix F – Amenity Matrix

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 43 75 APPENDIX A – GOLF MARKET STATISTICAL DATA

Indian Wells Golf Resort 5 miles 2 miles 10 miles 25 miles State of CA U.S. Summary Demographics Population 1990 Census 10,408 57,825 143,732 237,030 29,724,503 248,584,652 Population 2000 Census 15,186 93,303 200,201 325,221 33,871,650 281,399,034 CAGR 1990-2000 3.85% 4.90% 3.37% 3.21% 1.31% 1.25% Population 2010 Census 16,355 119,526 274,468 427,373 37,253,956 308,745,538 CAGR 2000-2010 0.74% 2.51% 3.21% 2.77% 0.96% 0.93% Population Estimate 2016 17,946 133,068 305,310 476,886 39,383,430 322,736,220 Population 2021 Projected 19,232 142,510 326,761 510,405 41,491,003 335,779,240 CAGR 2016-2021 0.87% 0.86% 0.85% 0.85% 0.65% 0.50% CAGR 2010-2021 2.05% 2.22% 2.20% 2.24% 1.36% 1.05% Median HH Income (2015 Estimate) $61,790 $58,880 $54,207 $49,125 $65,157 $56,106 Median Age (2015 Estimate) 57.2 49.2 42.3 41.3 36.4 38.0 Ethnicity White 83.4% 76.2% 68.3% 65.8% 55.7% 70.7% African American 2.3% 2.4% 2.2% 3.0% 6.5% 13.3% Asian 3.7% 3.8% 3.1% 3.3% 14.5% 5.6% All Other 10.6% 17.6% 26.4% 27.9% 23.2% 10.5% Hispanic Population Hispanic 21.6% 34.5% 51.9% 52.3% 38.3% 17.3% Not Hispanic 78.4% 65.5% 48.1% 47.7% 61.7% 82.7% CAGR = Compound Annual Growth Rate

Indian Wells Golf Resort 5 miles 2 miles 10 miles 25 miles State of CA U.S. Golf Demand Indicators Total Households 6,835 59,400 116,252 177,928 13,326,563 123,896,538 Number of Golfing Households 1,059 8,496 16,037 22,358 1,539,562 17,094,500 Projected Golfing Households (2020) 1,089 8,958 17,118 23,848 1,610,022 17,802,020 Projected Annual Growth Rate 0.60% 1.10% 1.30% 1.30% 0.90% 0.8% Seasonal Golfing Households 416 3,182 5,984 7,813 42,550 737,636 Latent Demand/Interested Non-Golfers 1,884 17,673 35,074 52,922 4,580,380 37,346,480 Household Participation Rate 15.50% 14.30% 13.80% 12.60% 11.60% 13.8% Number of Golfers 1,163 10,881 22,084 31,251 2,332,397 24,130,710 Rounds Potential (resident golfers) 55,076 401,966 770,655 1,053,418 40,204,841 465,791,320 Estimated Course Rounds (in-market supply) 423,860 2,179,653 4,285,431 5,166,010 45,359,536 465,791,320

Demand Indices Golfing Household Participation Rate 112 104 100 91 84 100 Seasonal Golfing Households 1,030 906 871 743 54 100 Latent Demand/Interested Non-Golfers 119 111 98 97 101 100 Rounds Potential per Household (resident golfers) 214 180 176 157 80 100

Indian Wells Golf Resort 5 miles 2 miles 10 miles 25 miles State of CA U.S. Golf Supply Golf Facilities Total 6 38 78 95 890 15,204 Public 3 20 34 47 614 11,388 Public: Daily Fee 2 18 30 42 437 8,906 Public: Municipal 1 2 4 5 177 2,482 Private 3 18 44 48 276 3,816

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 44 76 Public Golf Facilities by Price Point Premium (>$70) 2 13 23 31 165 1,363 Standard ($40-$70) 1 3 5 8 250 4,013 Value (<$40) 0 4 6 8 199 6,012 Golf Holes Total 162 846 1,755 2,052 15,723 257,193 Public 72 414 693 945 10,494 187,614 Public: Daily Fee 36 360 612 828 7,452 146,124 Public: Municipal 36 54 81 117 3,042 41,490 Private 90 432 1,062 1,107 5,229 69,579 Non-Regulation (Executive & Par-3) 18 162 297 378 2,457 21,348 Net Change Net Change in Holes past 5 years 27 0 -9 -18 -648 -9,045 Percentage Total Holes Past 5 Yrs 20.00% 0.00% -0.50% -0.90% -4.00% -3.4% Net Change in Holes past 10 Years 45 9 36 36 -576 -12,231 Percentage Total Holes Past 10 Yrs 38.50% 1.10% 2.10% 1.80% -3.50% -4.5% Indian Wells Golf Resort 5 miles 2 miles 10 miles 25 miles State of CA U.S. Supply-Demand Ratios Households per 18 Holes Total 759 1,264 1,192 1,561 15,257 8,671 Public 1,709 2,583 3,020 3,389 22,859 11,887 Public: Daily Fee 3,418 2,970 3,419 3,868 32,190 15,262 Public: Municipal 3,418 19,800 25,834 27,374 78,855 53,751 Private 1,367 2,475 1,970 2,893 45,875 32,052 Premium (>$70) 2,278 3,394 3,941 4,448 69,773 74,930 Standard ($40-$70) 6,835 19,800 23,250 23,724 49,912 28,982 Value (<$40) 0 23,760 29,063 35,586 106,613 27,566 Golfing Households per 18 Holes Total 118 181 164 196 1,763 1,196 Public 265 369 417 426 2,641 1,640 Public: Daily Fee 530 425 472 486 3,719 2,106 Public: Municipal 530 2,832 3,564 3,440 9,110 7,416 Private 212 354 272 364 5,300 4,422 Premium (>$70) 353 485 544 559 8,061 10,338 Standard ($40-$70) 1,059 2,832 3,207 2,981 5,766 3,999 Value (<$40) 0 3,398 4,009 4,472 12,316 3,803 Household Indices Total 9 14 14 18 174 100 Public 14 22 25 28 190 100 Private 4 8 6 9 142 100 Premium (>$70) 3 5 5 6 95 100 Standard ($40-$70) 24 69 81 83 174 100 Value (<$40) 0 83 101 124 372 100 Golfing Household Indices Total 10 15 14 16 146 100 Public 16 22 25 26 159 100 Private 5 8 6 8 119 100 Premium (>$70) 3 5 5 6 79 100 Standard ($40-$70) 27 71 81 75 145 100 Value (<$40) 0 86 101 113 312 100 Rounds per 18 Holes Rounds Potential (resident golfers) 6,120 8,552 7,904 9,241 46,027 32,599 Estimated Course Rounds (in-market supply) 47,096 46,376 43,953 45,316 51,928 32,599

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 45 77 APPENDIX B – LOCAL RESORT COMPARISON MATRIX

Summary Operating Data –Indian Wells Golf Resort and Primary Competitors

Peak Season 18H Off Season 18H Golf Facility Prime Time Prime Time Resident Fees Amenities Green Fees Green Fees

Indian Wells resident reservations available 14 53,000 square-foot clubhouse, two courses ranked in the Top 25, putting course, , VUE Grille and Bar, special event days in advance of play rooms: The Pavilion at Indian Wells (outside), Celebrity Ballroom, Players Room, walking distance from four luxury Players Course $189 / $199 $35 hotels (~1,500 rooms). Four Hotel (Miramonte Resort & Spa, Rennaissance, Hyatt Regency, and Indian Wells Resort Indian Wells Golf Resort* Celebrity Course $189 / $199 Coachella Valley resident reservations available Hotel) amenities include: Spa, fitness club, waterslide, Desert Pipe water ride, pools, tennis, multiple 2 days in advance of play restaurants/cafes/bars, children's play area & craft zone, biking badminton, bocce ball, table tennis, meeting/event $85 spaces, gift shops, shuttle service to Indian Wells golf courses.

Nov. 4 - Jan. 15, 2017 Aug. 8 - Oct. 2, 2016 M-Th $85 / F-Sun $95 M-Th $39 / F&WE $49 Fantasy Springs Resort Casino - 250 room hotel with casino, banquet rooms, multiple restaurants. Course offers all grass Eagle Falls Golf Course No special resident rates advertised Jan. 16 - Apr. 14, 2017 Apr. 15 - May 31, 2017 driving range (30 tees), and fully stocked golf shop M-Th $95 / F&WE $95 M-Th $55 / F&WE $65 Average between N/A - Use Dynamic Pricing Greg Norman is the newest course at PGA WEST PGA West Greg Norman $129 - $154 Currently showing thru April No special resident rates advertised PGA WEST: 6 courses, 10 tennis courts, 16 pickleball courts, health & racquet club, 3 clubhouses with multiple dining Course* NGF rate verified 12/1/16: WE 4, 2017 experiences and event accommodations, 2 golf pro shops, practice facility (12 tees) $189 Average between The Stadium Course is rated one of the "Top 100 Courses to play" (2016-2017) by GOLF Magazine and 4th toughest course N/A - Use Dynamic Pricing PGA West Stadium $112 - $169 in America in Golf Digest’s "Top 50 Toughest Courses in America" (2007). Currently showing thru No special resident rates advertised Clubhouse* NGF rate verified 2/17/16: WE 'PGA WEST: 6 courses, 10 tennis courts, 16 pickelball courts, health & racquet club, 3 clubhouses with multiple dining March 30, 2017 $239 experiences and event accommodations, 2 golf shops, practice facility (60 tees) Resident can book 3 days in advance July 1- Oct 9: $30 18-hole course, SilverRock Grill with outside patio, and practice facility (30 tees). $143 / $130 N/A - Use Dynamic Pricing Oct 10-Nov 7: Closed $420 MM Development Program for SilverRock Resort includes: 140-room luxury hotel, 200-room lifestyle hotel, conference SilverRock Resort* NGF rate verified 11/14/16: Currently showing thru April Nov 8 - Dec 25: $45 and shared services facility, a mixed-use village, resort residential village, renovation of the existing Ahmanson Ranch House, WE $170 16, 2016 ($170) Dec 26- April 30: $55 construction of a permanent golf clubhouse, and associated road and utility infrastructure. May 1 - June 30: $45 $128 / $139 N/A - Use Dynamic Pricing Resort amenities: 620 guest rooms + 98 villas. Golf, indoor and outdoor dining, event accommodations for 40-120 guests, NGF rates verified 1/11/16: La Quinta Resort Golf Course* Currently showing thru April No special resident rates advertised spa, 3 public pools & 30+ private pools, tennis, Mountain Dunes golf clubhouse and pro shop, practice facility (45 tees) Pete Dye Mountain $199 4, 2017 (share amenities/cross advertise with PGA West). Pete Dye Dunes $169 $139 / $139 NGF rate verified 1/4/16: WE N/A - Use Dynamic Pricing Resident can book 3 days in advance 18 hole Arnold Palmer course, full service golf shop, Bellatrix restaurant; banquet facilities; three-story 63,000 square foot, Classic Club* $170 ($170: includes golf, Currently showing thru $60 Tuscan Village-inspired clubhouse, full practice facility (100 tees). Titleist ProV dozen and $15 January 4, 2017 ($145) F&B voucher $148 /$155 N/A - Use Dynamic Pricing Resident can book 3 days in advance 36 holes of golf, footgolf, 33,000 square foot clubhouse with ballroom (240 guests) and private dining room for 24 people, The Desert Willow Golf Resort* NGF rate verified 10/28/16: Currently showing thru $50 anytime Terrace restaurant, Roadrunner Café, Cook's Grill' 2 bars, golf shop, full practice facility (90 tees). WE $185 February 3, 2017 ($177) $105 / $120 N/A - Use Dynamic Pricing 427 Guest rooms and luxurious villas, 18 hole Brian Curley designed course, Pool with water slide, The Grill At Shadow Shadow Ridge Golf Resort* NGF rate verified 2/12/16: WE Currently showing thru No special resident rates advertised Ridge, fitness center; practice range (60 tees). $179 February 4, 2017 ($105) $109 / $119 N/A - Use Dynamic Pricing The Westin Mission Hills NGF rate verified 11/23/16: Currently showing thru Resident member fee per round Resort-Gary Player Course January 1 – April 30 $68 WE $160 March 5, 2017 ($119) 512 guest rooms, fitness studio, Westin Kids Club, 3 pool areas, Two championship golf courses and practice facility, spa, May 1 – May 31 $57 $79 / $119 N/A - Use Dynamic Pricing Pinzimini restaurant, Fireside Lounge, 65,000 sq ft indoor meeting space, 26,000 sq. ft. outdoor meeting space The Westin Mission Hills June 1 – September 30 $3$ NGF rate verified 10/28/16: Currently showing thru Resort-Pete Dye Course October 1 – December 31 $59 WE $160 March 5, 2017 ($119) * Use Dynamic online pricing: price is determined based on current weather conditions, demand, and time of day. Weekday and Weekend rates shown represent an average WD and WE peak fee from multiple days between 12/5/16 and 1/5/17.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 46 78 APPENDIX C – RESIDENT GOLF BENEFIT MATRIX

Resident Card Comparison Course City Qualifiers / Restrictions Resident ID Cost Benefits Tee Time Access Policy Resident Rates Regular/ Non Resident Rates

Valid proof of residency. Resident Card Holders receive: May book up to 14days in advance, must Maximum of two (2) Resident Accompanied resident guest rate is $80per player; hold tee time with credit card. Must BenefitCards may be issued on discounts on green fees and 20% off all food, non-alcoholic No charge. cancel no later than3 days prior to tee $35 per resident per round each lawfully occupied property. beverages and merchandise at the Indian Wells Golf Online Dynamic Pricing range between IndianWellsGolfResort IndianWells Cards valid for one year. time. $35charge per playerforany Accompanied resident guest rates: Dec. 1 through April 26 is $80, dependent children of the Resort; may receive 20% discounts on food and spa Prime time and twilight rates of $199- $59 (Jan 1 - Dec 31) playerwho cancels inside of the April 27 through May 25 is $55 and May 26 through August 31 is $45 qualified recipient that are under services at Indian Wells’ four luxurious hotel properties cancellation period if the tee time is not the age of 21 are entitled to (where offered); free use of the fitness center(equipment resold. receive Resident Benefit Cards. only) at the Hyatt Regency Indian Wells Resort &Spa

Resident Card Holders receive: Discount golf rates; July 1- Oct 9: $30 May book up to 3 days in advance, must La Quinta must be your primary Renewal fee is $150. Valid for 15% off food at Grill Room Oct 10-Nov 7: Closed hold tee time with credit card. Must Online Dynamic Pricing range between Silverrock Resort La Quinta residence. Every resident must 3yearsandexpire at the end (excluding beverages and bev. cart items); Nov 8 - Dec 25: $45 cancel no later than 24 hrs prior to tee Prime time and twilight rates of $117 - $45 have own card (including children) of month issued. 15% off golf shop Dec 26- April 30: $55 time. No shows billed in full. (not including sales items orgolf equipment); May 1 - June 30: $45 30% off full posted rates forup to 3guests.

Desert Resident Loyalty Club Rates: 7 days a week Every day / Twilight 12 p.m. (Jan 11 - Apr 28 = 1 pm.) Resort Course Legend Course Resort Course - Reg/ Senior* Legend Course - Reg/ Senior* Sept 8 - Sept 30: CLOSED Sept 8- Sept30:$35/ $19 Oct 1- Oct 12: CLOSED Oct 1- Oct 12: CLOSED Oct 1 - Oct 11: CLOSED Oct 1 - Oct 11: $49 / $39 Oct 13- Nov 14: $59 / $49 Oct 13- Nov 14: CLOSED Oct 12 - Nov 14: $85 / $59 Oct 12 - Nov 14: CLOSED Nov 15 - Jan 10: $55 / $46 Nov 15 - Jan 10: $39 / $36 Coachella Valley must be your Resident Card Holders receive: Nov 15 - Jan 10: $75 / $59 Nov 15 - Jan 10: $59 / $39 Jan 11 - Mar 29: $65 / $59 Jan 11 - Mar 29: $55 / $49 primary residence. (Covers Palm Discount golf rates, breakfast, lunch and 2drinks; Jan 11 - Mar 29: $85 / $59 Jan 11 - Mar 29: $65 / $49 $31 annual fee. 7 days in advance tee times Mar 30 - Apr 28: $45 / $39 Mar 30 - Apr 28: $39 / $35 Springs, Cathedral City, Rancho enrollment in Desert Resident Loyalty Card1; Guest rates Mar 30 - Apr 28: $69 / $45 Mar 30 - Apr 28: $49 / $36 Tahquitz Creek Palm Springs Cards valid for one year (non residents can book up to 90 days in Mirage, Palm Desert, Indian Wells, (up to 3) at arate discounted from non-resident rate; Palm Springs Resident Card Rates: M-TH / Fri-Sun & Holidays Super Twilight & Replay / Sundown 3 p.m. (Jan 1 - Dec 31) advance) and LaQuintaand all points enrolled as amemberof e-club (email specials); 15% off all Resort Course Legend Course between) non-sale items in golf shop; Sept 8 - Sept 30: CLOSED Sept 8- Sept30:$15/ $10 Resort Course Legend Course Oct 1 - Oct 11: CLOSED Oct 1 - Oct 11: $36 / $29 Oct - Dec 23: $47 / $54 Oct - Dec 23: $28 / $33 Oct 12 - Nov 14: $46 / $26 Oct 12 - Nov 14: CLOSED Dec 24 - May $51 / $56 Dec 24 - May $33 / $38 Nov 15 - Jan 10: $39 / $26 Nov 15 - Jan 10: $29 / $19 June - Sept: $23/ $31 June - Sept: $10/ $21 Jan 11 - Mar 29: $45 / $29 Jan 11 - Mar 29: $36 / $26 Mar 30 - Apr 28: $35 / $26 Mar 30 - Apr 28: $26 / $19 May book up to 72hrs in advance, must Palm Desert must be yourprimary $10 processing fee, valid Resident Card Holders receive: Online Dynamic Pricing range between hold tee time with credit card. Must DesertWillowGC PalmDesert residence. Every resident must annually and expire the end of Discount golf rates $50 anytime Prime time and twilight rates of $141- $59 cancel no later than 48 hrs prior to tee have own card (including children) month issued. Phone rates range: Prime Time=$155; 12:30= $95; 2pm= $65 time. No shows billed in full. Resident Card Holders receive: Club membership is offered to Access to both courses, seven days per week Rancho Mirage permanent 20% discount on non-sale items purchased at The Westin residents, seasonal residents that golf shops. spend five or more months out of No charge to get the Golf cart and practice balls included in green fee on the the yearduringthe season in the Public Guests: 90days in advance Resident Member Fee Per Round Resident Guest Fee PerRound application from the City. The day of play. Administered by The City, and City employees. Westin Mission Hills Villa Owners: 14 January 1 – April 30 $68 January 1 – April 30: $89 cost for Resident membership Online Dynamic Pricing range between Westin Mission Hills Golf Rancho Mirage days in advance May 1 – May 31 $57 May 1 – May 31: $57 is $89 effective 11/1/16 and Guest Membership includes: Prime time and twilight rates of $116- $59 Resort & Spa Rancho Mirage must submit the Resident Golf Club Cardholders: 4days June 1–September 30$34 June 1–September 30: $45 includes a complimentary Access to both courses, Monday-Friday, City's verification of residency in advance October 1 – December 31 $59 October 1 – December 31: $80 guest pass. A 20% discount on non-sale items purchased at The Westin (membership application with City golf shops. seal) to The Westin –Pete Dye Golf cart and practice balls included in green fee on the Golf Shop, where a Membership day of play. Card will be issued * Seniors are considered 60+ years of age and rates are only available before 7:30am and after 11:30am 1. Desert Resident Loyalty Club benefits: 2nd visit =instant reward of $10Tahquitz Creek gift card; 4th visit =dozen (12) golf balls; 7th visit and every proceeding =small bucket of warm-up range balls; 9th visit =Odyssey putter; 15th visit =Callaway wedge. (Some restrictions apply)

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 47 79 APPENDIX D – OTHER GOLF ENTERTAINMENT CONCEPTS

Ownership/Financial Estimated (NGF) Venue Backing Basic Concept Existing Locations Features & Amenities Building Size Construction Cost Technology

The flagship (first site - London in 2000) golf driving range, F&B and Privately Owned. entertainment venue, TopGolf offers (depending on location) climate Generation 2': 102 climate controlled bays (10' x 18' standard; $200 to $275 per 2-AZ; 1-CA; 1-CO; "Typical" Callaway Golf has ~15% controlled bays with technology offering various games. Chip-in-ball up to 6 players) on three levels. Various games, ±250 yard sq. ft. (building, RFID (Radio Frequency 2-FL; 2-GA; 3-IL; building is stake. In 2016, technology tracks shot’s accuracy and distance; players get points by long targeted range area. Full service restaurant, bay-side equipment & Identification) chip in ball; TogGolf 1-KS; 1-NV; 1-OH; 65,000 sq. ft.; Providence Equity hitting targets. Requires $5 one-time lifetime membership. Hourly bay wait service, multiple bars, rooftop terrace, private event improvements; antennas; fiber optics; 1-OK; 1-OR; 8-TX; ±12-acre total Partners bought minority rentals are $25 to $45, depending on time of day. TG reports that more space, golf instruction, and other amenities such as pool excluding land and Auto Tee 1-UT; 3-VA. footprint stake. than 50% of their customers are non-golfers, and Millennial clientele is tables, shuffleboard, and Xbox Kinect. technology) significant, especially in evening hours.

60 bays (outside, climate controlled)/3 floors of simulated golf Golf range, dining and entertainment venue with 60 gaming bays. on famous courses worldwide, plus an outdoor putting green; Simulators. ProTracer Customers can choose from four interactive games and 18 golf courses. free equipment; kid-friendly games; food options; 16ft wide Flying Tee Privately Owned. Tulsa, OK 56,000 sq ft N/A Launch monitor based Flying Tee has partnership with COBRA PUMA GOLF as its official apparel diagonal video wall, mulitple 65" TVs; 360 degree LED sports tracking. and equipment partner. ticker; 3 distinct places to eat (sports bar, wood-fired grill, and modern restaurant).

Drive Shack Holdings Under Construction 90 outdoor climate controlled driving bays/ 3 story dining and Drive Golf range-themed eating and drinking establishment with interactive (Newcastle Investments/ Orlando, FL entertainment complex; restaurant; bar; shops; lounge and 66,000 sq ft N/A Shack gaming. Intended to ultimately compete with TopGolf. TaylorMade Golf) (Lake Nona) rentable event space; terrace on upper level.

Spot Golf ranges will use regulation balls, provide free top quality clubs and full service dining for lunch, dinner and late The Spot Golf game will integrate real world golf range targets with video night social entertainment. Players can select from coaching $6 million (small FlightScope technology Privately owned; seeking game graphics to enhance the user’s experience. Intended for non-golfers, modes to guide each swing while they play and improve. Built scale location) to Spot Golf Initial site still TBD. Will vary. license; 3D radar tracking. investment partner(s). golfers and beginners. Three-story, 108-bay prototype planned; 2-story, in training modules and instruction modes offer players up to $15 million (large Auto Tee in larger locales. 72- bay smaller version. Bays larger than TopGolf at 12' x 20'. 24 metrics, including club swing speed, angle of attack, smash scale). factor, ball speed, spin and rotation, distance and accuracy. Play for fun, or to improve, compete and win prizes.

Trackman in every bay; FlightScope launch 60 climate-¬controlled tee boxes. Full-service sports bar and monitor; Licensed 4ORE is a new high-tech golf entertainment complex featuring golf- Lubbock, TX grill that seats 350 guests and has three bars, a golf training advanced Doppler radar 4ORE Privately owned. simulated games using advanced doppler-based technology. Players will 52,000 sq. ft. N/A opening May 2017 academy with professional instruction, several outdoor patios based tracking technology be rewarded for hitting targets located on a turf field. and a cocktail lounge. for accuracy and distance, and mapping the ball on a monitor for scoring.

18 simulators. Live-play area (18 greens) dedicated for shots Doppler based (license 70,000 sq. ft. REALiTEE Golf will be an indoor golfing experience, integrating simulation inside 40 yards; high quality synthetic greens with 10 ft of Estimated at $30 agreement). Players will Privately owned; seeking live play; RealiTEE play with live play for the short game within a real golf environment. Drives Initial site still TBD. elevation variations, small pot bunkers and bridges and million for wear multi-purpose investment partner(s). 40,000 sq. ft. and approach shots are hit on one of multiple high quality golf simulators. walkways; full entertainment facility with food, beverages and proptotype SmartWatch that guides building social experiences. them through games.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 48 80 APPENDIX E – NGF SURVEYS

A. Indian Wells Golf Resort – Golfer Survey

Indian Wells Golf Resort

Welcome to our Customer Satisfaction survey. Our goal is to provide you with a great golf experience and remarkable customer service. Our survey is short and to the point and we encourage you to be open and candid with your feedback. Thank you for your help.

About how many rounds have you played at Indian Wells Golf Resort in the past 12 months?

Do you play most of your golf at Indian Wells Golf Resort?

 Yes  No

What other courses in the area, if any, have you played on a somewhat regular basis in the past 12 months? If you haven't played at any other courses, click "Next" to continue.

How satisfied are you, overall, with Indian Wells Golf Resort? Very Very dissatisfied satisfied 12345678910

Given the cost to play here, do we meet your expectations? We fall short of your We exceed your expectations expectations 12345678910

How does your overall satisfaction with Indian Wells Golf Resort compare to your satisfaction with other similarly priced courses you have recently played?

Unfavorably Favorably 12345678910

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 49 81 In the next 12 months, are you likely to play here more often, less often or about the same? Much Much less often more often 12345678910

If asked, how likely would you be to recommend Indian Wells Golf Resort to another golfer? Not at all likely Extremely Likely to recommend to recommend 012345678910

Please tell us what it would take for you to rate it a 9 or 10?

What do you like most about Indian Wells Golf Resort?

Approximately how long would you say you've been playing golf at Indian Wells Golf Resort?

less than a year OR ______years?

Have you recommended Indian Wells Golf Resort to anyone in the past 12 months?

 Yes  No

If yes, how many?

Have you advised anyone against playing at Indian Wells Golf Resort in the last 12 months?  Yes  No

If yes, how many?

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 50 82 For each factor below, select a number from 1 to 10 indicating your level of satisfaction.

1 = Very Dissatisfied, 10 = Very Satisfied.

Indian Wells Golf Resort

1 2 3 4 5 6 7 8 9 10 Don't Know/ Factors Very Very Can't Dissatisfied Satisfied Rate

Friendliness/Helpfulness of Staff 1 2 3 4 5 6 7 8 9 10

Overall Course Conditions 1 2 3 4 5 6 7 8 9 10

On-course Services (restrooms, drinking water) 1 2 3 4 5 6 7 8 9 10

Golf Course Design/Layout 1 2 3 4 5 6 7 8 9 10

Food and Beverage Service 1 2 3 4 5 6 7 8 9 10

Overall Value 1 2 3 4 5 6 7 8 9 10

Pace of Play 1 2 3 4 5 6 7 8 9 10

What would you estimate is your average cost per round (including green fee, golf car if used, range balls - but excluding merchandise and food & beverage) at Indian Wells Golf Resort?

About how much would you say you have spent in total on merchandise (e.g., apparel, golf balls and clubs and other items) over the past 12 months at Indian Wells Golf Resort?

About how much would you estimate you spend, on average, on food & beverage each time you visit the course?

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 51 83 What course do you play most frequently?

 Players

 Celebrity

What do you typically do when you want food & beverage between the front 9 and back 9 holes?

 Go in to IW Café  Go upstairs to VUE Grill & Bar  Neither – I patronize only the beverage cart  None of the above

What is your overall satisfaction with the availability of food & beverage service between the front 9 and back 9 holes?

 1 (unsatisfactory)  2  3 (satisfactory)  4  5 (excellent)

What do you typically do for food & beverage after your round is over?  Go in to IW Café  Go upstairs to VUE Grill & Bar  Neither – I don’t stay on site after my round

What is your overall satisfaction with your food & beverage options after your round?

 1 (unsatisfactory)  2  3 (satisfactory)  4  5 (excellent)

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 52 84 What would you like to see for food & beverage service between the front 9 and back 9 holes? (Please describe)

IWGR/the City is considering building a new indoor golf driving range entertainment venue (at site of existing range) that will feature high tech games, food & beverage, music and a social atmosphere. Hourly rentals of the facilities, which will accommodate groups, would likely be priced around ±$30/hour. Do you anticipate that you would patronize such a facility?

 No  Yes – once in a while  Yes - regularly  Don’t know

Which of the following practice amenities do you typically utilize before or after a round of golf at Indian Wells? (Choose all that apply)

 Driving range  Putting course near clubhouse  Practice putting green (across bridge)  Practice chipping green

Space permitting, amenities/activities in addition to the existing golf courses are being considered for IWGR. Which of the following do you think you would participate in? (Choose all that apply)

 Pickleball  Bocce  Lawn Activities (bowling, darts, etc.)  Golf Teaching Academy  Mini Golf  Zip-lining  Other (please describe)

If you chose other from above, please describe.

Please enter the zip / postal code of your primary residence

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 53 85 Please select your gender

 Male  Female

Please enter your age

Please enter your average 18-hole score

Which of the following best describes you?  Indian Wells year-round resident  Other Coachella Valley year-round resident  Indian Wells seasonal resident  Other Coachella Valley seasonal resident  Visitor - typically stay at Indian Wells Golf Resort  Visitor - typically stay elsewhere in Greater Palm Springs/Coachella Valley

Please provide your contact information below. If you would like to remain anonymous click next to continue.

First Name Last Name Address City State Zip Code Phone Number E-Mail

Thank you for taking the time to share your thoughts. Your opinion is very important to us and will help us improve the golf experience we provide to you and others.

Click here to visit our website

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 54 86 B. Palm Springs and Coachella Valley Visitors

Thank you for agreeing to participate. To get started, please answer the following questions.

What best describes your age? (SELECT ONE)

 Under 18  18-34  35-49  50-64  65+

What is your 5-digit zip code where you reside?

How often do you visit Greater Palm Springs/Coachella Valley? (SELECT ONE)

 Less than once per year  About once per year  2 - 3 times per year  4 or more times per year  Have never visited

Are you a golfer? (SELECT ONE)

 Yes  No

Do you typically play golf while visiting Greater Palm Springs/Coachella Valley? (SELECT ONE)  Yes  No

How satisfied are you with the variety of amenities and things to do in Greater Palm Springs/Coachella Valley? (SELECT ONE)

 Not at all satisfied  Not very satisfied  Somewhat satisfied  Very satisfied

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 55 87 There is consideration of building a new entertainment venue in Greater Palm Springs/Coachella Valley, featuring a high tech multi-level golf driving range with interactive games (suitable for golfers and non-golfers alike), food & beverage service, music and a social atmosphere. For those who choose to participate in the golf aspect, hourly rental fees would be about $30 per hour per group.

How interested are you in visiting such a facility - for either the golf driving range or simply to eat, drink & socialize - the next time you are in Greater Palm Springs/Coachella Valley? (SELECT ONE)

 Not at all interested  Not very interested  Somewhat interested  Very interested

Do you think that the presence of this entertainment venue would favorably influence your decision to choose Greater Palm Springs/Coachella Valley as a destination? (SELECT ONE)

 No  Maybe  Yes, probably  Yes, definitely

What is your level of interest in using/participating in the following amenities/activities the next time you return to visit Greater Palm Springs/Coachella Valley? (SELECT ONE ANSWER FOR EACH STATEMENT) Not at all Not very Somewhat Very interested interested interested interested Pickelball Bocce Other lawn activities (bowling, darts, etc.) Golf putting course (natural grass) Themed miniature golf Golf teaching academy Water slides/waterpark Zip-lining Yoga studio Spa/Fitness Center Tennis

Are there other amenities or activities not listed above that you would like to participate in while visiting Great Palm Springs/Coachella Valley (SELECT ONE)

 Yes  No

Please describe those amenities or activities?

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 56 88 C. Travel Survey Thank you for agreeing to participate. To get started, please answer the following questions.

What term below best describes your primary focus in marketing/booking travel? (SELECT ONE)

 Market & book travel for individual leisure visitors  Market & book golf wholesale packages  Market & book large groups/conventions

Have you booked travel/meetings for Greater Palm Springs/Coachella Valley? (SELECT ONE)

 Yes  No

From a group sales/marketing perspective, how satisfied are you with the variety of amenities and things to do in Great Palm Springs/Coachella Valley? (SELECT ONE)

 Not at all satisfied  Not very satisfied  Somewhat satisfied  Very satisfied

There is consideration of building a new entertainment venue in Greater Palm Springs/Coachella Valley, featuring a high tech multi-level golf driving range with interactive games (suitable for golfers and non-golfers alike), food & beverage service, music and a social atmosphere. For those who choose to participate in the golf aspect, hourly rental fees would be about $30 per hour per group.

How likely do you think that the presence of such a facility would make Greater Palm Springs/Coachella Valley a more attractive destination for leisure travelers and groups? (SELECT ONE)

 Not at all likely  Not very likely  Somewhat likely  Very likely

What other amenities/activities do you think might make Greater Palm Springs/Coachella Valley more marketable to leisure travelers and groups?

Thank You

You have successfully completed the survey, and we thank you for your participation.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review – 57 89 APPENDIX F – AMENITY MATRIX The summary matrix on the following page provides comparison of key findings related to each activity, including the potential target market, cost to develop, potential revenue impact, and compatibility with the existing IWGR program.

Matrix of Amenities

Amenity Description Target Mkt. Est. Cost Likely Revenue Impact Space Feasible (Y/N) Compatibilityw/Golf LikelyEffectonRoomNights TypicallyFound

Pickleball is a racquet sport w Minimal. There is very little pay-for-play with Each court requires about 900-1,000sf (court elements of badminton, tennis, and Pickleball. Mostly used as an additional size is 20' × 44' with a 36-inch net). Space is Not compatible. Pickleball is Minimal. Pickleball has not shown itself Seniors. Has a strong repeat-use $20k to $30k per Most common in private table tennis. Players use solid paddles amenity in private clubs. NGF found some limited at IWGR, especially in proximity to noisy and disruptive, especially to be a strong driver of visitation, Pickleball commitment due to high league court with lighting clubs and in retirement (wood or composite) to hit a perforated daily fee examples with court fees ranging clubhouse. Space at far east end of range or when multiple courts are active although resort guests may participate if participation. and fencing. communities. polymer ball (like a whiffle ball) over a from $2 to $10 and monthly memberships overlay on existing parking. Resorts have simultaneously. available. net. between $35 and $50. space and would consider adding.

Bocce is played on natural soil and/or asphalt Minimal. There is very little pay-for-play with courts that require about 1,000+/- sf (90' x 13'). Minimal. Bocce has not shown itself to Most common in private Seniors. Has a strong repeat-use $12k to $14k per Generally compatible with golf. Bocce is a ball sport using multiple balls Bocce. Mostly used as an additional Space is available for one or two courts in a be a strong driver of visitation, although clubs, retirement Bocce commitment due to high league court w lights and The game itself is mostly quiet roiling on a defined court area. amenity in private clubs, master-planned few locations near the clubhouse. Miramonte resort guests may participate if communities and some participation. all accessories in normal play. communities or resorts. already has a Bocce court and other resorts are available. resorts. considering adding.

Direct revenue impact has not been Successful venues can be produced on as little A lawn game includes any number of significant, but many facilities have Can be compatible with golf and All patrons of all ages. as 0.25 acres of space, and could be Very common at all types of outdoor games that can be played on a produced significant indirect impact through many golf facilities of all types Minimal. Lawn activities have not Programmed lawn activities in Assume $2-$3 per programmed in to the IWGR, even if a new golf facilities, but most common Lawn lawn. Many types and variations of lawn enhanced food, beverage and event have been active in finding shown to be a strong driver of visitation, conjunction with adjacent outdoor sf or at least $80k entertainment venue is added to the driving in public spaces, muni golf Games games exist, including games that use revenue. Success is correlated with space and adding lawn events although resort guests may participate if food and beverage service can per acre range. IWGR had previously hosted croquet on courses, community balls and the throwing of objects as extensive programming and event activities to the calendar of social available. draw a wide variety of patrons. property currently occupied by the banquet centers, and public parks. their primary means of gameplay. - or "theme" nights that are regularly activities. pavilion (8,300sf / 0.2 acres). scheduled and build an audience. Most common at golf All patrons of all ages. specialty facilities & resorts, Programmed putting course Actual impact at IWGR has been slight The venue currently exists at IWGR on 0.9 Minimal. The existing putting course A grass putting course creates a Very compatible. Most all but is growing as an activities in conjunction with (under $50,000 per year), but stronger acres. This is the traditional size model for a 9- has produced additional room nights sequence of separate putting green golf Assume $5 per sf successful grass putting additional amenity to Grass adjacent outdoor food and performance has been observed in other hole grass putting course with interesting and resort operators have not used its holes. The course would provide for an for USGA spec courses are included as part of regulation golf courses. Putting beverage service can draw a wide locations (+$100,000). However, design features and separate holes. The NGF presence in active promotions. appearance of a golf course on a much green - 65,000 sf a larger golf facility, either full Putting courses work best Course variety of patrons. When lighted for maintenance expense is high due to the standard is a minimum of 65,000sf of putting However, when made aware of its smaller scale and with turf quality that = $325,000 regulation golf course or golf when they are heavily night use (as it is at IWGR) this need to maintain putting green quality space for an 18-hole grass putting course (1.5 existence and availability, resort guests matches a regulation golf course green. specialty facility. programmed with putting venue can attract families with conditions. ac). do participate. leagues, tournaments and children at golf resorts. social events. Mostly children (under age 14) and Most common as stand- Moderately compatible, but less Mini golf with specific themes - 18 or 36 families with children. Active in Mini golf requires a minimum of 0.9 acres for a alone facilities or in common. The most successful holes with artificial turf surface. The hosting large birthday and other Mini golf can be profitable if activity is high, single 18-hole course with support amenities, Possible moderate effect. One key conjunction with other Mini golf typically mini golf is included with other Themed more economically successful mini golf kid parties and events. Some with successful venues showing revenue in or 1.5 acres for 36-holes. Extensive foliage or target for the IW resorts is younger youth-oriented activities cost $30k per 9- youth-oriented attractions in Miniature facilities include 2 courses + amenities venues have attracted adults with the $200k+ range per 18-hole course. coverings are common for sun shade. The adults and families with children. The (arcades, go karts, batting holes, including heavy traffic areas and main Golf such as party rooms, arcade games, programming and in conjunction Maintenance tends to be low, but labor support amenities do not currently exist at addition of a mini golf course could lead cages, etc.). Also common lights and all roadways. There is a growing Course covered outdoor space and youth- with adjacent outdoor food and costs are high to provide adequate IWGR but some space could be easily to increased lodging demand from in tourist-heavy areas and amenities. trend toward mini golf in golf oriented concessions (burgers, dogs, beverage service. Must be lighted oversight. converted (IW Cafe or indoor golf performance these segments. markets, and in proximity to resorts, but typically away from ice cream, candy, pop, etc.). for night use to be successful at center). major roadways and traditional golf activities. attracting all segments. interstate highways. Very compatible. Most The venue currently exists at IWGR, but is successful golf school programs Most costs related probably too small to host the kind of volume Successful golf school programs can Potential impact can be great with "named" are hosted at golf resorts with Most common at high- Create a multi-day golf school with on- to hiring teaching needed for significant revenue impact. The have considerable impact on hotel room Golf Golfers of all ages. Traditionally teachers and branded schools. Golf schools high-quality golf courses and 4- quality, 4-star golf resorts site golf teaching professional and pro and branding. driving range would need to be able to nights, with upwards of 1,500+ separate Teaching strong with younger adult women can charge upwards of $300-$700 per star lodging. It is very important with large-scale lodging organized golf clinics and lesson Performance bay accommodate at least 30+ school students and stays common in successful programs Academy and seniors. student and successful school sessions can to have well-known golf component and tournament programs. renovation at least still host the basic resort needs. The indoor golf in golf tourist areas like Scottsdale, host 30-50 students, 40+ times per year. teaching prof. and well quality golf courses. $30k per bay performance bays could be remodeled to Orlando and San Diego. organized golf school curriculum accommodate some small schools. (1-day, 2-day, week long, etc.).

Not compatible. While some A zip-line consists of a pulley Estimated at This venue would be difficult to create at IWGR. high-end resorts have zip-lines suspended on a cable, usually made of Actual impact can be achieved if the It is possible there could be some All patrons of all ages, but $120k for proper As gravity feed is key, a substantial elevation within their property, there are Most common at popular stainless steel, mounted on a slope. It is amenity can command use fees in the $20 minimal effect. One key target for the strongest appeal to younger adults zip-line + change is required over a long length of space. no examples of zip-lines directly vacation resorts and in designed to enable a user propelled by range per activity. Operating expenses can IW resorts is younger adults and Zip Lining and teenagers. Zip-lines are additional costs The only possibility would be from west to east proximate to high end resort golf conjunction with outdoor gravity to travel from the top to the be high and new additional liability families with children. The addition of a popular among "adventure for accessories beginning at the western edge of the Hyatt courses. Further, the City must adventure camps with bottom of the inclined cable by holding insurance will likely be a significant zip-line could lead to increased lodging seekers" and outdoor-type profiles. (harnesses, property through the east end of the range be certain that the zip-line does extensive scenery. on to, or attaching to, the freely moving expense. demand from these segments. helmets, etc.). (2,800+/- feet). not interfere with the proposed pulley. golf entertainment amenity.

National Golf Foundation Consulting, Inc. – IWGR – New Golf Entertainment Amenity Review90 – 58 44-950 Eldorado Drive, City of Indian Wells Indian Wells

2/1/2017

File #: 024-17 Item #: B.

Introduction to Strategic Planning

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