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The village-owned RedTail Golf Club in Lakewood will be adding two golf simulators this fall, with the village manager betting her job that they will make a profit over the winter, despite board concerns on the golf club’s finances.
Lakewood trustees narrowly approved spending $52,732 on two golf simulators in a 4-3 vote Tuesday, with Village President David Stavropoulos breaking the tie. Including a five-year loan, the total cost comes out to just over $61,000, according to village documents.
Golf simulators are a form of indoor golf that uses virtual technology composed of a screen and enclosure that can analyze golf swings.
The village aims to use the simulators as added revenue during the colder months of the off season. With the plan to install them in November, the village estimates the simulators will bring in more than $47,000 in extra net revenue for the first year, according to village documents.
Golfers can use the simulators for league play, hourly rentals, private lessons and party rentals, the documents say. Rentals costs are set to be $25 an hour for league play and $40 an hour for regular play and party rentals.
Startup costs to install the machines will be $5,500, Village Manager Jean Heckman said.
Village officials have before considered installing simulators in the new RedTail clubhouse, which opened in January. But now they are slated to be in the cart barn, though many trustees said they would rather have seen the simulators in the clubhouse.
“I think it’s unhealthy. I think it’s unsafe. I don’t think it’s the right move,” Trustee Lonnie Jeschke said.
Trustees Tricia Babischkin and Jason McMahon raised concerns about whether RedTail has the cash to finance the purchase. They pointed to hefty costs like a $20,000-per-month mortgage payment and expenses reaching $350,000 last year.
“I think before we spend any more money on RedTail, we need to stop and take a hard look at those financials and figure out why our personnel costs tripled over the last three years and our sales only went up by $100,000,” McMahon said.
Heckman said the club is still running on a deficit because it was operating out of trailer for most of last year while construction of the new clubhouse was underway, plus there were the upfront costs of opening a new restaurant. Despite any losses, RedTail has not used any taxpayer money, Stavropoulos said.
“We have to remember that last year was not a full year of operation in a new building,” Heckman said.
But Babischkin noted “astronomical” expenses of $13,000 spent last year on gear and apparel. She shared worries that the golf club is operating with too many expenses without any reserved dollars.
“We are still in a church having this meeting when we should be in RedTail’s event space because the echo is so bad in that building, we can’t hear each other,” she said. “The walls are still generally bare in the building. It does not look finished. We put $4 million into two buildings with the promise of a third that has yet to be filled.”
The cart barn still needs to be “inspected and confirmed” that the heating is sufficient for the winter months, Heckman said.
“I’m just very concerned about the money because the last thing I really want is a dollar coming out of the general fund and onto our taxpayers to fund the business,” Babischkin said.
Heckman said if the simulators don’t make a profit after their first season, they will be sold by April 1. She said she expects to get a return on investment in 22 weeks that would pay off the five-year loan.
“We’re asking for April 1. That’s all we’re asking for here, and we’re asking for the opportunity to try and bring the $47,000 worth of revenue, and we will be the first ones to come before the board and say ‘It didn’t work,’ and we will sell them,” she said. “I am willing to give you my job on it.”
A customer survey with over 250 responses found that nearly 74% of participants said they would use the simulators during the off season in the cart barn, but nearly 60% said exterior access to restrooms are a deterrent, according to village documents.
“With a strong return on investment, favorable financing options and documented consumer demand, this initiative will elevate the course into a year-round recreation asset, increase non-tax revenue and serve a broader segment of residents seeking winter leisure opportunities,” officials said in village documents.