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Presented 10/7/14
<br />Assuming Coal Creek opens in June 2015, we project 18,000 rounds of golf through
<br />December 2015 (60% of a full year). In subsequent years we project, with a full year's
<br />operation, we can achieve 30,000 rounds and a growth rate of at least 2% per year over
<br />the next five years. These estimates are based on historical averages and are
<br />influenced by the golf course financial model prepared by Golf Convergence Inc.
<br />The peak fee charged to play golf during prime times is known in the industry as the
<br />"Rack Rate ". Staff recommends a rack rate of $55.00 for 18 holes during prime times in
<br />2015. With dynamic pricing, punch cards and promotional programs, staff estimates the
<br />average revenue per round will be $41.25 in 2015. In addition to green fees, revenues
<br />will also be generated through electric golf cart rentals, driving range, pro -shop sales,
<br />pull cart rentals, golf club rentals, golf lessons and an anticipated food and beverage
<br />agreement.
<br />The $55.00 Rack Rate is based on comparable golf course rates and is, in staffs view,
<br />necessary for Coal Creek to reopen and attract golfers back. However, it will not be
<br />sufficient at 18,000 rounds to cover operating costs, much less make a payment on the
<br />loan due the Utility Fund or contribute anything toward the Capital Outlay necessary to
<br />reopen. However, staff believes it is a good starting point for Coal Creek to reenter the
<br />Front Range golf market and reestablish Coal Creek's reputation as a great place to
<br />have fun. The table below shows the projected revenues, expenses and net margin for
<br />2015 and 2016.
<br />Coal Creek Golf Course Projected Revenue and Expenses
<br />Item
<br />Revenue 2015 2016 Notes
<br />Rounds 18,000
<br />Rack Rate $ 55.00
<br />30,000
<br />$ 60.00
<br />This number is based on the 5 -year average at Coal Creek for 2008 -2012
<br />Average Green Fee $ 41.25 $ 45.00
<br />Green Fees $ 742,500 $ 1,350,000 Average Green Fee multiplied by projected rounds
<br />CIP Surcharge $ 36,000 $ 60,000 $2 per person per round
<br />Golf Cart Rentals $ 144,000 $ 240,000 Based on projections from year end data provided by WGP
<br />Driving Range $ 78,000 $ 130,000
<br />Food /Beverage $ 27,000 $ 45,000
<br />Pro Shop Sales
<br />Pull Cart Rentals
<br />$ 72,000
<br />$ 1,500
<br />$ 120,000
<br />$ 2,500
<br />Club Rentals $ 5,400 $ 9,000
<br />Golf Lessons $ 6,000
<br />Misc. Revenue $ 12,000
<br />Total Revenue $ 1,124,400 $ 1,986,500
<br />$ 10,000
<br />$ 20,000
<br />Expenses
<br />Operations & Maintenance $
<br />Capital Outlay $
<br />Loan Repayment $
<br />Total Expenses $
<br />1,292,050 $
<br />1,196,000 $
<br />225,000 $
<br />2,713,050 $
<br />Net Margin
<br />1,785,000
<br />65,000
<br />225,000
<br />2,075,000
<br />$ (1,588,650) $ (88,500)
<br />5
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