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Golf Firms' Woes Not Hurting Courses

Commercial Real Estate

March 05, 2002|JESUS SANCHEZ | TIMES STAFF WRITER

The financial troubles of golf course magnate David G. Price has triggered some concern but no noticeable effect on the numerous public and private courses his companies own and operate across Southern California.

Privately owned American Golf Corp. and publicly traded National Golf Properties Inc., which are both headed and controlled by Price, own and operate more than 60 public and private courses across the region.

More than 40 of those are public courses, including the Arcadia Golf Course and the Vista Valencia Golf Course, which are operated by Santa Monica-based American Golf under long-term contracts with a variety of government agencies.

Faced with intense competition and an industrywide decline in business, American Golf has been unable to meet its rent payments on courses leased from National Golf. Because of that inability, both companies have proposed a controversial merger opposed by some of National Golf's stockholders.

"It certainly has golf organizations alarmed because they manage so many golf courses," said Craig Kessler, executive director of the Public Links Golf Assn. of Southern California.

Many government agencies have come to rely on American Golf not only to operate their courses, but to generate revenue for the public coffers. The city of Long Beach, for example, receives nearly $4 million a year from the six courses operated by American Golf.

In Pasadena, the city's Brookside Golf Course went from a drain on the municipal treasury to generating about $1.8 million in annual revenue after American Golf became the operator, said Porfirio Frausto, who heads the operating company responsible for the course.

"They do an extremely good job," Frausto said.

American Golf officials have been calling on local officials to discuss their financial condition and deal with any concerns.

"They came down with some of their administrative staff and talked to us and reassured us that they were going to live up to their agreements and contracts, and they have done so," said Phil Hester, director of parks, recreation and marine services for Long Beach.

Hester and other government officials say American Golf has not suggested that it would seek to renegotiate the contracts or seek some form of financial relief related to the public courses it operates.

"It would take a lot of cities by surprise if they came back for that kind of relief, and I don't know what kind of support they could get for it," said Steve Duron, administrator of golf operations for Los Angeles County, which contracts with American Golf to operate eight of the county's 19 courses.

"They've kept us advised of their financial woes ... but they have never come to us to seek rent relief or change the structure of the lease," Duron said.

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