The OHPA’S sales pit… um, Master Plan

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Remarks prepared for the Nov. 13 Common Council’s Finance Committee meeting. Mr. Cantor delivered much of this message to the committee.

To the Editor:

The Oak Hills Park Authority (OHPA) determined the golf course it manages couldn’t survive without an outside source of revenue from a large commercial driving range.  So it issued a request for proposals (RFP) for a private sector firm to construct and operate the driving range and share its revenues with the OHPA.

Only two firms responded to the RFP and Total Driving Range Solutions (TDRS), the one that was chose to construct the driving range, couldn’t come up with private sector financing for it.  So instead it got together with the OHPA to come up with a proposal to get taxpayers to finance it.

In a nutshell, here is the sales pitch, referred to as a Master Plan, that the OHPA, with the help of TDRS, is making to Finance Committee of the Common Council:

Sterling Farms’ driving range in Stamford is profitable. Loan us $4,205,325 and we’ll build you a driving range that is even more profitable. If you read our sales pitch you’ll see that Forecast Golf Group (FGG), our golf guru and a firm that bills itself as “the industry leader in providing ‘real world’ guidance to golf range developers” expects 7,530 individuals will hit balls at Sterling Farms, but our driving range will draw 11,342, i.e. 3,812 more, or half again as many. So we’ll make even more money than Sterling Farms.

In fact we’ll make so much money that we’ll be able to cover the difference between the cost of operating and maintaining the golf course and the revenue obtained from user fees plus the cost of servicing the more than $2,500,000 in loans taxpayers have already extended to us.

But wait, we forgot something. For this plan to work you have to lend us an additional $1,000,000 to upgrade the golf course and construct a welcome center. You see, unfortunately we just haven’t been – and the way things are going never are going to be – able to cover our capital costs. But give us the money to upgrade the course and construct a driving range and we’ll be able to cover those costs in the future and maybe even be able to pay you (i.e. taxpayers) back some of the $6,700,000 in loans old and new we’ll end up owing you.

The driving range of course is the key. Please don’t worry about the fact that TDRS has never constructed a driving range or anything else. As a reward for their coming up with this sale pit—, um, Master Plan, we are going to hire them.

Why wouldn’t we put the project out to bid? Because TDRS deserves to be rewarded for all its clear, hardheaded analysis.  Here is just one more example of that analysis.  As noted before, TDRS after consulting its astrologer and in-house golf guru FGG determined our driving range will have 11,342 patrons. Sterling Farms charges $11 for a bucket with 100 balls. So let’s just figure our patrons will generate an average of $24.33 of revenue for us.  Make sense?

O.K.  Now $24 x 11,342 patrons = $276,000.  That’s for year one.  In year two the driving range will generate $563,040 in revenues even though the number of patrons will decrease to 11,204. In other words, in year two we’ll average $50.25 per patron because, with the increased enthusiasm our golf guru is projecting, each one will want to hit at least 450 balls – i.e. spend more than four hours at the driving range before heading out to play 18 rounds of golf. And just take a look at what our golf guru projects for year 10, when we are going to have a FGG-projected 14,000 patrons and take in $645,000!

Now we understand some people may think: Wait a doggone minute! Sterling Farms is located near the Merritt and downtown Stamford and is a destination for golfers from Westchester. Oak Hills Park, on the other hand, is located in an off-the-track AAA-zoned residential neighborhood. How is your driving range going to generate more patrons than Sterling Farms?

Here’s how. We are going to develop a marketing plan that will help us overcome that disadvantage. Perhaps we may even ask you for a bit of money to help us pay for that marketing plan. But don’t worry, we’ll hold off that request till after we build the driving range.

For now, please just think of us as a commercial enterprise run by golfers for golfers. Maybe we haven’t made money in the past but pretty soon we are going to be listed on the New York Stock Exchange (NYSE).

So with that we want to thank you so much for taking our Master Plan seriously.

Thank you.

Paul Cantor


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