Title
Amend Operating Agreement with Canyon Golf, LLC (Ordinance S-45315)
Description
Request to authorize the City Manager, or his designee, to amend Operating Agreement 139707 with Canyon Golf, LLC, a subsidiary of Grand Canyon University (GCU), to increase the green fee to $44 for Phoenix Card Holders and $115 for the public at the GCU Golf Course.
Report
Summary
On Nov. 24, 2014, the City entered into an operating agreement with GCU for the improvement, operation and management of the Maryvale Golf Course. GCU further agreed to assume the green fee model that was in place at that time; the green fee model applied to all City-operated golf courses. Since entering into the operating agreement, GCU has invested $11.2 million into a complete renovation of the golf course including tees; fairways; bunkers; cart paths; green complexes; a new clubhouse; restaurant; and additional facility renovations and improvements.
As a result of the investment into the facilities and improved golf experience, GCU has requested to increase the green fee rate structure at the golf course to align with the green fee rate structure that was approved by City Council for the Papago Golf Course on Dec. 19, 2007. The Council-approved rate structure was developed by the National Golf Foundation (NGF) after conducting a comprehensive analysis, which included fee recommendations for all City-owned or operated golf courses. The Papago Golf Course rate model was based on golf course improvements, future clubhouse and restaurant capital investments, similar to the improvements recently made by GCU.
The requested rates are the maximum in-season (winter/spring) green fees that may be charged and are the same rates currently being used by the Papago Golf Course. Since the Phoenix golf market and direct local market competition will be key factors in determining competitive rates, the new rate structure will allow GCU flexibility to respond quickly and adjust the green fees daily, weekly, monthly and seasonally, based on weather, course conditions, demand and competitor rates. Attachment A identifies the proposed in-season maximum green fees, compared to current rates.
Contract Term
GCU entered into a 30-year operating agreement on Nov. 24, 2014. Provisions of this contract include an option to extend the term up to five years, which may be exercised by the City Manager, or his designee. The requested action does not change the existing term of this contract.
Location
GCU Golf Course, 5902 W. Indian School Road
Council Districts: District 5
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Parks and Recreation Department.