News Tribune exclusive: Chambers Bay continues to lose money

Dreams of a resort hotel, beach house facility, water recreation area and other amenities at Chambers Bay did not move toward reality in 2010. A development agreement to pursue the vision expires this week.

Meanwhile, the Pierce County enterprise that was built around a celebrated golf course in 2007 continues to lose money and needs loans to survive.

Despite nationwide television, golf magazine and news coverage of the U.S. Amateur in August, the golf course in University Place lost money in the third quarter, a financial report shows.

At the end of September, revenues for the year were $400,000 below budget and expenses were $300,000 over. That left the course $700,000 below budget in the first nine months of 2010.

But the Amateur, a United States Golf Association event that drew world-class players and around 33,000 spectators to Chambers Bay, finished in the black. The event cost $1.5 million, and the golf course made $15,615 after all expenses were paid, according to the county’s final financial report on the event.

Overall, officials say, Chambers Bay continues to work on creative ways to get more golfers on the links and boost its national and international stature.

Pierce County Executive Pat McCarthy said she remains confident that the golf course that forms the centerpiece of the Chambers Creek recreational area is on a path to success. But she acknowledges it’s a climb as slow and arduous as tackling the hilly, dune-filled course itself.

It could be four or five more years before the $21 million course is self-sustaining, said Kevin Phelps, the deputy county executive.

County and USGA officials expect upwards of 60,000 people a day will attend the prestigious U.S. Open when it’s held at Chambers Bay in 2015.

McCarthy calls the course an “economic driver for the county,” pointing to hotel rooms filled, meals eaten and merchandise bought by golfers who travel long distances to play the challenging Scottish links-style course with great views of Puget Sound.

Phelps stresses that the reclaimed gravel mine is about more than golf.

“I think overall people understand that we have created an asset,” Phelps said.

“We tried to make it a self-sustaining operation when in reality it’s about the trails and open space,” he added, referring to the 930-acre site that includes miles of walking and biking trails, an off-leash dog area and about two miles of waterfront.

“There’s not a park in our system that makes money,” Phelps said.

He specifically pointed to Sprinker Recreation Center in Spanaway, which gets around $985,000 a year in operating money from the county despite revenues from the ice rink, tennis courts and recreational program.

Deanna Cleaveland, founding partner of Cornerstone Financial Strategies in University Place, said she believes deeply in the course and its mission. And she thinks it will eventually reach profitability.

“Like any new business,” she said, “actual performance often doesn’t show a profit at the beginning.”


A year ago, county leaders negotiated with Ventur-Hospitality to build a clubhouse and other facilities at Chambers Bay.

McCarthy signed a memorandum of understanding and lease development agreement with Ventur president James Burkhouse on Jan. 6. The one-year agreement expires Jan. 5.

In March, county officials said they hoped to reach a deal with Ventur on more detailed plans by June. That hasn’t happened. Amid a weak economy, the company has been unable to find financing.

So there are no plans being drawn for the amenities that had been envisioned by the developer and the county: an 85- to 124-unit hotel with rental-house casitas; a retail center including a restaurant, coffee shop, bike shop, bakery and other services, or a beach house and recreational water activities.

Burkhouse could not be reached for comment.

The idea was to get the facilities built and opened by spring 2014, a year before the U.S. Open. That would allow enough time to work out kinks by the time pro golfers and tourists arrive, Phelps said.

Chambers Bay now has a temporary clubhouse and other facilities that appear more like upscale trailer park buildings than upscale golf course facilities.

But Chambers Bay doesn’t need a permanent clubhouse in time for the Open, Phelps said.

The USGA will bring with it what amounts to a small town of tents and structures for merchandise sales, hospitality parties and other services and events, McCarthy said.

That doesn’t mean, however, that the county isn’t still dreaming of a resort operation. Or that one isn’t possible by 2014.

Though the economy remains soft, other developers have expressed interest in a public-private partnership at Chambers Bay, Phelps said. And if the Ventur agreement expires without action, the county will pursue them.

“We think it’s likely that we will find somebody to step in and take over,” Phelps said.


The fact that the U.S. Amateur turned a small profit was “awesome,” said Tammy Blount, president and CEO of the Tacoma Regional Convention and Visitor Bureau.

The Aug. 23-29 event created a sense of community pride and “also bought a week’s worth of TV coverage that there’s just no way we could have paid for,” Blount said.

And the fame is far-flung.

“What really lit up eyes in China was when I was talking about Chambers Bay,” Blount said of a trade mission she recently took with Gov. Chris Gregoire.

There’s a big market in China for affluent golfers who want to travel to the U.S. and see Chambers Bay as both prestigious and beautiful, Blount added.

The county’s financial report on the Amateur shows total income of about $1.8 million and expenses of roughly $1.5 million. The raw numbers show net income of $339,794, but accountants adjusted that figure downward by subtracting the revenue lost from the course closure during the tournament.

Revenue came from corporate hospitality, merchandise and ticket sales and from the USGA, according to the report. The biggest chunk, $851,550, came from the support of 80 local companies.

But the flush of community pride and positive numbers for the Amateur can’t mask the hard financial reality for the year.

Fourth-quarter expenses and earnings won’t be out for some time, but the course will lose money in 2010. The question is how much.

The course lost $1.3 million in 2009 as the recession dug in and financial concerns deterred many golfers from paying greens fees that go as high as $169 a round.

The course is working to repay the bond loans used to build and equip it. It also has borrowed money from other county funds.


More aggressive marketing, branding of the golf course and creative sales tools also are in the works.

An all-you-can-play pass program launched earlier this year already has generated nearly $100,000 in sales, general manager Matt Allen said. Next year, the course will add a Washington resident rate structure; Pierce County residents already get a discount.

“We’re working to make sure that the golf course is sustainable, and we’re finding cost efficiencies,” McCarthy said.

Those include steps such as making improvements to the restaurant and its deck, Phelps said. He believes actions taken over the fall and winter to increase golf play and restaurant use will help lessen the 2010 budget gap.

A committee is looking for more efficient ways to manage the course and ways to drive up revenue, he added. It expects to have a report to McCarthy in March.

In the meantime, county and community leaders like to point out victories, not losses.

The course has generated roughly $2.3 million in sales and use taxes since it opened, a county report shows. That money gets divvied up among entities, including the state, University Place, Pierce County and transit programs.

The Amateur filled 208 hotel rooms around the county and sparked car rentals and other purchases, according to the county’s report on the tournament.

“I think there’s a good future for Chambers Bay,” Phelps said. “We just have to go in and leverage the course in the right way.”

Cleaveland, the local businesswoman, sees it this way:

“There are two sides to this financial coin. The golf course financing is just one side. The other is the golf course itself and impact it has on the county and on the University Place community.

“And both sides are very promising.”

Kris Sherman: 253-597-8659 kris.sherman@thenewstribune.com