2006: Financial revelations for Torrey Pines outrage residents
Thursday, June 30, 2011
By Michael Lednovich
Soap opera isn’t a term generally associated with golf courses. But San Diego’s high profile Torrey Pines is proving to be an exception to the rule.
“You could write a book about what’s going on at Torrey,” said Rick MacDonald, president of San Diego Golf Course Reservations, which brokers tee times at Torrey Pines. “Just about every day there’s a revelation about how the course operations are being mismanaged.”
City-owned Torrey Pines, annual site of the PGA Tour’s Buick Invitational, is scheduled to be the host of the 2008 U.S. Open. Although Torrey Pines’ North and South courses are in top condition, the city’s management of the facility
has residents up in arms.
Consider the following:
In early March, City Attorney Michael Aguirre learned that both courses are being used as collateral against $33.7 million in bond debt San Diego owes from building an extension to its Old Town Trolley line and improvements to Mission Bay and Balboa parks. Aguirre was reviewing city documents when he discovered the city council signed off on using the courses as collateral in March 2003. The city has been making payments to the various lending institutions. The South Course will be tied up until 2011, and the North Course is scheduled to be cleared of any debt by 2009. Balboa Park Golf Course, also owned by the city, was put up as collateral as well for another $9.5 million. The city is obligated to make payments on that loan until 2022.
“You can’t use park land to secure bonds. It violates the city charter,” Aguirre said. “Torrey Pines is at risk, and none of this was told to the public.”
A five-year plan for Torrey Pines that includes a new $13 million clubhouse and parking lot to be built in time for the Open has met with fervent opposition from residents of the financially strapped city and is in jeopardy of being scrapped. More than 100 people took the podium during a five-hour public hearing
March 8 to voice their opposition to the plan.
The city’s golf course enterprise fund – revenue generated through green fees that is to be used only by golf operations – is being raided by the city to pay off the aforementioned bonds. The mayor’s office also is questioning the legality of the fund and its future could be in doubt, raising questions about the long-term operation of municipal golf in San Diego.
A plan to increase weekend green fees at Torrey Pines South by 75 percent by 2011 to fund future capital-improvements led angry residents to form the San Diego Municipal Golfers Alliance, a citizen group that has collected more than 1,000 signatures from those opposed to the plan.
“Everything that’s going on right now is about the city trying to privatize Torrey Pines,” said Paul Spiegelman, a semi-retired law professor who was the impetus behind forming the SDMGA. “It’s a lot of craziness that’s going on.”
Torrey Pines’ tee time lottery, intended to be a 70/30 split between residents and non-residents, where golfers call at 7 p.m. to obtain a tee time up to seven days in advance, isn’t working as intended. The San Diego Union-Tribune found that during four days in January, residents obtained only 17 percent of the available tee times on the courses.
Just how the circumstances at Torrey Pines have eroded over the years is being attributed to city officials that no longer are in office. The same group that OK’d using public golf courses as collateral to repay borrowed money were key figures in financial controversies. (In addition, the city’s former manager of golf operations, Jim Allen, was forced to resign and eventually was indicted on felony charges of misusing public funds and grand theft. He is scheduled to be arraigned in May.)
“Certainly the previous administration played a hand in what’s taking place today. They’re the same people who created millions of dollars in pension benefits with no apparent funding,” Aguirre said. “I don’t think we’ve uncovered all there is to know about the city golf course operations.”
To wade through the quagmire, Aguirre has requested an audit of Torrey Pines.
Mayor Jerry Sanders, who was elected last November, also is trying to navigate the morass
of backdoor deals and agreements attached to Torrey Pines.
“Essentially, we inherited this mess,” said Fred Sainz, a spokesman for the mayor’s office. “We
feel the central issues are the capital improvements including the clubhouse, the whole rate structure of green fees, and the issue of the enterprise fund and how it works. Taken in total, this is an enormous piece of work that needs to be addressed quickly.”
At the center of the storm is manager of golf operations Mark Woodward, who just celebrated his first year on the job at San Diego after directing municipal courses in Mesa, Ariz., for 31 years.
Woodward said what he found at Torrey Pines didn’t measure up to the facility’s reputation.
“It had the reputation as a world-class golf course, but the operations were, and still are not, world-class,” he said. “When I arrived, I was asked to put together a five-year plan into 2011. The plan is intended to take Torrey Pines to that world-class level.”
Having played both Pebble Beach Golf Links and The Old Course at St. Andrews, Woodward said Torrey Pines lacked the “wow factor.”
“From driving to the entrance, to playing (Pebble Beach and St. Andrews), to the whole experience, you go ‘Wow, what a great day I had,’ ” Woodward said. “You don’t have that at Torrey Pines. The parking lot is a jigsaw puzzle. There’s on old sign halfway to the entrance, and you can’t even tell where the entrance to the clubhouse is, how to find the pro shop or where to sign in. There’s nothing that excites you when you get here.”
Woodward’s initial five-year plan called for the construction of a 27,000-square-foot, $7 million clubhouse and $6 million in improvements to the parking lot, walkways and terraces. The construction would be paid for by golf revenues.
Woodward’s plan also included raising green fees. Currently, residents pay a weekend rate of $45 (not including cart) to play the South Course. That rate would go up to $73 in 2011, according to Woodward’s plan. The North Course weekend rate would increase by $19 to $53 in 2011.
Nonresidents would be hit harder with the South Course weekend rate jumping from $135 to $218, and the North Course weekend rate going from $85 to $131.
The plan ignited a firestorm of opposition when it was unveiled in January.
“I haven’t met anyone who supports the clubhouse,” Spiegelman said. “This is a financially strapped city. Do we want libraries and recreation areas, or do we want a country club? The whole plan is a recipe for disaster.”
The five-year plan was scrutinized during hours of public hearings before the city’s Golf Advisory Board, the Natural Resources and Culture Committee and an independent group headed by Aguirre in early March. Opposition to the plan expressed at the hearings was so strong that Sanders called a halt to the process to revise the plan.
“We’ve got a group of residents who view playing Torrey Pines as an entitlement,” Woodward said. “But the reality is that we need to have a green fee price that meets the expense of maintaining and operating the courses. Right now we’re losing money. The increases are meant to offset rising costs in gasoline, pesticides and fertilizers, and labor. I’ve taken a lot of heat and some of it has gotten personal. But my goal is to maintain the asset that is Torrey Pines and make the course available to city residents. I’m not trying to make it a country club.”
All indications now point to the clubhouse being put on hold.
“We have the ‘wow’ factor, and it’s called the Pacific Ocean,” Sainz said. “The clubhouse isn’t necessary.”
The U.S. Golf Association agrees.
“From our standpoint, it would be nice to have an upgraded facility,” said Marty Parkes, senior director of communications for the USGA. “But it’s not a deal-breaker. Having a golf course that challenges the best players in the world is what’s important.”
Residents also are up in arms over how tee times are allocated at Torrey Pines. Last June, a group of citizens sued the city of San Diego, claiming that preferential tee times at Torrey Pines are being allocated to the Hilton and The Lodge hotels for sale to their guests. That would be a violation of an agreement struck in 1983 that prohibits the city from giving away preferential tee times and access to the city-owned golf course. The case is pending.
The city is currently trying to piece together an ordinance that would make it illegal for tee-time brokers, such as San Diego Golf Course Reservations, to resell tee times on city-owned courses.
MacDonald, who runs San Diego Golf Course Reservations, calls the proposed ban flawed.
“Trying to legislate the phone reservation system is folly. Someone will find away around it. If it’s not an outfit here, it will be a company in Chicago. The market will demand it,” MacDonald said. “Instead of outlawing it, the city should pick a firm and partner with them to drive revenues. That’s the sensible solution.”
As it stands, the future of Torrey Pines is in the hands of Sanders. The mayor is reviewing Woodward’s proposal and soon will announce revisions to the plan to put in front of the city council.
“This isn’t just about Torrey Pines. Balboa Park and Mission Bay are in dire need of renovations. Those facilities are just tired out,” Woodward said. “I’ve been running municipal golf courses my entire career. Our goal is to make Torrey Pines the best municipal course in the country, and that goal shouldn’t be viewed as a threat to resident golfers.”
Contributing writer Michael Lednovich lives in Orange, Calif.