Business Analysis of the RedGate Golf Course in Rockville, MD Prepared For: City of Rockville Recreation and Parks 111 Maryland Avenue Rockville, MD 20850 Prepared By: 501 N. Highway A1a Jupiter, FL 33477 (561) 744-6006 January 2019 Table of Contents GENERAL LIMITING CONDITIONS .......................................................................................... 1 EXECUTIVE SUMMARY ........................................................................................................... 2 Introduction And Purpose .................................................................................................... 2 NGF Review – 2018 ............................................................................................................ 3 Overall Summary of Findings .............................................................................................. 4 Key findings on RedGate Golf Course .......................................................................................... 4 External Environment .......................................................................................................... 5 NGF Recommendations ...................................................................................................... 6 Basic Oversight and Golf Course Management ............................................................................ 7 Operational Recommendations ..................................................................................................... 7 Physical Improvements / Capital Investment ................................................................................ 7 Financial Analysis ............................................................................................................... 8 NGF Projection Results ................................................................................................................. 8 Summary Statement ........................................................................................................... 9 Summary of Opportunities and Challenges................................................................................. 10 SUBJECT FACILITY – REDGATE GOLF COURSE ................................................................11 RedGate Golf Course Facility Overview .............................................................................11 Location, Access and Surrounding Elements ............................................................................. 12 RedGate Golf Course Facility Review ................................................................................14 Golf Course Review ..................................................................................................................... 14 Existing Golf Course Conditions Review ..................................................................................... 15 Additional Amenities and Structures Review............................................................................... 22 RedGate GC Capital Investment Considerations ........................................................................ 26 Review of Golf Operations .................................................................................................28 Contract Management Review .................................................................................................... 28 Lease Termination Issues ........................................................................................................... 29 Oversight and Staffing ................................................................................................................. 30 Technology and Marketing .......................................................................................................... 31 Golf Playing Fees ........................................................................................................................ 32 Other Operational Issues............................................................................................................. 33 RedGate GC Operational Performance ..............................................................................34 Rounds Played at RedGate GC .................................................................................................. 34 RedGate Golf Course Revenue .................................................................................................. 36 RedGate Golf Course Expenses ................................................................................................. 37 Review of Ancillary Operations (F&B Operation, Pro Shop & Driving Range) ............................ 39 The RedGate Golf Course Financial Summary ........................................................................... 40 Summary – RedGate Golf Course ......................................................................................41 EXTERNAL FACTORS AFFECTING THE OPERATION OF REDGATE GC ...........................43 National Golf Foundation Consulting, Inc. – RedGate GC FINAL Report Demographics, Economy and Weather ..............................................................................43 Demographic Analysis – Local Permanent Residents ................................................................ 43 Key Economic Factors................................................................................................................. 44 Golf Market Supply and Demand Indicators .......................................................................46 National Golf Industry Overview .................................................................................................. 46 Market Definition – Primary and Secondary Trade Areas ........................................................... 47 Local Golf Demand ...................................................................................................................... 47 Other Demand Drivers................................................................................................................. 48 Local Golf Supply ........................................................................................................................ 48 Golf Course Market Supply / Demand Summary ........................................................................ 49 Local Competitive Golf Market ...........................................................................................50 Competitive Public Access Golf Facilities Map ........................................................................... 50 Summary Information .................................................................................................................. 51 Market Area Rounds and Fee Information .................................................................................. 52 Montgomery County Revenue Authority (MCRA) Golf Network ................................................. 54 Key Findings – Competitive Golf Market ..................................................................................... 56 External Factors Summary .................................................................................................58 RECOMMENDATIONS FOR THE CITY OF ROCKVILLE ........................................................59 NGF Observations on RedGate Golf Course ......................................................................59 Basic Oversight and Structure ............................................................................................60 Structure Options ......................................................................................................................... 60 NGF Recommendation ................................................................................................................ 62 Physical Improvement Recommendations .........................................................................62 Completion of Basic Repairs ....................................................................................................... 63 Operational Recommendations ..........................................................................................63 Technology and Marketing .......................................................................................................... 63 Player Development and Programming ...................................................................................... 65 ANALYSIS OF EXPECTED REDGATE GOLF COURSE FINANCIAL PERFORMANCE ........66 RedGate GC Projections (2019-2023)................................................................................66 Basic Assumptions ...................................................................................................................... 66 Activity and Revenue Assumptions – RGGC (2019-2023) ......................................................... 66 Expense Assumptions ................................................................................................................. 67 Economic Performance Projections – 2019-2023 ....................................................................... 70 Summary Discussion – NGF Projections ............................................................................71 Limiting Conditions ...................................................................................................................... 71 SUMMARY STATEMENT .........................................................................................................72 APPENDICES...........................................................................................................................73