Wed, Mar 14, 2012 11:21 AM
I'm pleased to say that I've had a sincere interest in the Town
of Killington's Green Mountain National Golf Course since the
beginning. It was with feverish effort that the finishing touches
were put on the facility so that it could host Vermont's first
Women's Professional Golf Tournament, which I and The Mountain
Times were great supporters of.
The FUTURES Tour brought over 100 of the best up and coming women
golfers from all over the world to compete on what was certainly
one of Vermont's best new tests of golf. The FUTURES Tour grew her
for several years and Green Mountain National's reputation grew
But the FUTURES Tour ultimately failed to generate sufficient
revenues to continue at Killington. So too has the general demand
for golf lost in its appeal, while the number of golf facilities
has grown. Supply and demand is currently out of balance, and
there's no indication that our weak global economy is going to help
If you look around the region you will find that many country clubs
nationwide have financial difficulties. Those who are the most well
off have alternate or supplemental activities that help balance
their profit and loss statements. In or own neighborhood, those
would include Killington Resort where golf is very much a secondary
revenue generator; Woodstock Country Club where they are part of a
major hotel and larger resort complex; and to some extent Rutland
Country Club which enjoys year round dining, catering and party
function business which generates more gross revenue than
All business is about income and expenses, but it's also about cash
flow. Income and expenses determine if you have the "gross profit"
required to also make debt and mortgage payments and pay taxes, and
stay in business.
Looking again at Green Mountain National they are suffering from
nearly all of the maladies that promulgate financial difficulty.
They're in a market with too much golf available. They're faced
with a local competitor that can afford to underprice and out serve
them without bringing disaster on themselves. They have no
significant revenue away from golf. They have too much debt... and
they are equally exposed to both the dwindling popularity of golf
and the weakness of the economy.
Green Mountain National is a municipally owned facility. As a
taxpayer, I understand that I'm ultimately liable, along with my
neighbors, for it's financial obligations.
If Green Mountain National was a privately owned company it's most
likely that we could negotiate with our creditors in some form of
bankruptcy and dump a lot of debt. That, of course, isn't going to
happen because the Town is not bankrupt, nor is any creditor going
to give up a penny of obligation owed by government. This may
happen to the government of Greece, but it isn't going to happen in
So what do we do?
One option is to lease the course to what may be a smarter group of
operators, get rid of the burden of operation and hopefully end up
with more cash to pay off debt. I don't think there are any takers
on this one.
We could also try to sell the course, but again there would be few
takers, and none of those would pay much for a weak cash flow
Another option is to simply shut down the course, sell off what's
left and pay off as much of the debt as possible with the proceeds.
This, of course, wastes all of development costs to have built a
In theory, so long as the operation of the facility generates any
manner of significant positive cash flow, while maintaining the
premises properly, it's best to keep it running. At the same time,
the costs of operation MUST be minimized and the sources of revenue
MUST be optimized. Any schemes at maintaining the status quo are
ludicrous. There was a study done, but my understanding is that
it's not enough new information to solve any real problems.
In the mean time, funds will most certainly be pulled away from the
EDTC budget or costs will be added to your tax burden. There is no
way around it... and we will just have to be happy that the golf
course is a recreational asset that brings pleasure to residents
and hopefully draws more tourists to come here and leave their
recreation and tax dollars. Much has been tried in the past to
overblow this aspect of the course's existence and we should be
leery of manufactured data in the future. The most emphasis should
be on further cost cutting, more competitive marketing and
operations, and new and diversified uses for the facility.
Everything else is out of our hands.