After months saying they hoped at least to break even, Pierce County officials reported this week that the county came out on top financially as the host of the 2015 U.S. Open in June.
The county netted $1.1 million after subtracting costs tied to hosting the week-long championship at Chambers Bays golf course, according to a financial summary presented to the County Council on Tuesday.
Deputy County Executive Kevin Phelps said corporate hospitality sales helped push the event into a moneymaker for the county.
“Corporate revenue was higher than projected,” he said.
The county received 20 percent of the USGA’s net corporate sales. The U.S. Open sold a variety of hospitality packages to multinational, national and local businesses, offering climate-controlled tents and suites, chef-prepared meals and other amenities.
The county also received $650,073 in sales tax revenues and was paid $2.5 million from the USGA to rent the University Place golf course.
$980,000What the county will spend from U.S. Open proceeds to repay part of an interfund loan
Total revenues received were just over $5 million. The $1.1 million is what the county had left after repaying roughly $4 million in expenses on security, course preparations and other costs.
The county initially estimated it would use $700,000 in taxpayer money to cover security costs incurred at the event. That number later increased to $830,000. The county previously dedicated $1 million to cover those costs.
Of the additional revenue from the event, the county will dedicate $980,000 to repay an interfund loan it used to make debt payments on the golf course, Phelps said. The county borrowed from an equipment rental and revolving fund to make debt payments on the course when expenses exceeded revenues starting about six years ago. The course opened in 2007 and broke even in 2008; it then landed in the red each of the next four years, requiring the interfund transfers.
The rest of the $1.1 million will go to a golf course reserve fund to cover ongoing operating expenses at Chambers Bay, County Executive Pat McCarthy said.
The course made money in 2013. The county repaid some debt that year and again in 2014.
The county will continue chipping away annually at the remaining $2.7 million interfund loan balance, Phelps said.
The course is expected to continue on a positive revenue trajectory, he said.
After the dust settled from the U.S. Open, the county requested an analysis of course operations from KemperSports, the company under contract to operate Chambers Bay.
“We asked: ‘Now that the U.S. Open has taken place, what is the future of Chambers Bay?’ ” Phelps said.
$7.1 millionProjected Chambers Bay revenues in 2018
The course is expected to make money over the next three years, according to that report. Projections don’t go beyond 2018 because it’s hard to predict usage that far out, Phelps said.
A gradual increase in the number of rounds is expected over the next three years. Revenues also are estimated to increase gradually over the same period, from $6.8 million in 2016 to $7.1 million in 2018.
The county estimates green fees will actually decline over this period. The average green fee is expected to be almost $129 in 2016 and go down to roughly $122 in 2018.
County leaders are discussing the logistics of hosting another U.S. Open. If they choose to put in a bid with the USGA, it would be at least another 10 years before they could host one.
County Council members responded favorably to this week’s financial report.
“At the end of the day, the county benefited by $1.1 million in extra revenues that it wouldn’t have had if it hadn’t had the U.S. Open,” Councilman Rick Talbert said.
The county isn’t the only local government that made money from the golf championship. The city of Lakewood also reported a positive bottom line after reimbursements were calculated, as well as sales and lodging tax collections.