Chambers Bay Resort’s a year behind and downsizing. But don’t stop now, Pierce County
Pierce County still has ambitious plans for a multimillion-dollar hotel and destination resort anchored by Chambers Bay golf course.
Studying how to move forward on those plans might seem anachronistic in the middle of a pandemic, when hotels are struggling to survive. But that’s what the County Council spent more than two hours doing last week.
If you think this is a silly diversion from what should be an all-consuming fight against COVID-19, think again.
The golf course sits on a sublime 930-acre piece of county-owned waterfront land in University Place, and it attracted the world’s best golfers to the US Open championship in 2015. But that giant sucking sound you hear is nearly $1 million a year in negative cash flow after making debt payments.
As tax revenues plunge during years of expected recession ahead, the county must stop, or at least slow, bailing out the golf course with taxpayer and utility ratepayer subsidies. The best way to do that — really, the only way — is to build a first-class resort and give it every chance to succeed.
Unfortunately, coronavirus has set the project back and made the tough economics of golf resort development even tougher.
To borrow a golfing term, the project’s private developers are stuck with a bad lie. Despite a solid shot off the tee in May 2019 when they signed a land deal with the county, they’re now swinging at a ball that’s lying in the rough, still several hundred yards from the hole.
On the bright side, Chambers Bay Resort has a new logo, the result of a five-month branding effort. There’s also new language to market the resort; it promises to transport guests to “an otherworldly waterside haven with a stunningly sited hotel and villas, and its world-famous US Open links course.”
The developers have bullish enthusiasm, a 100-year ground-lease agreement and newly installed golf course greens that play smoother than the oft-criticized fescue grass.
What they don’t have is an actual resort.
In fact, they’ve fallen a year behind schedule and downsized their project, at least partly due to a financing freeze after the pandemic hit.
The hotel is now projected to open in spring 2023 instead of 2022, with 56 rooms instead of 73. Plans for short-stay rental villas have now settled on 44 units, down from 62.
Absher-Putnam, the local development team, started making $450,000 annual lease payments to the county on April 30 but didn’t break ground this spring as planned.
“We are still engaged and committed,” Dan Absher told the County Council at Tuesday’s study session. “We will get this done,” Dan Putnam added later.
They’re encouraged by reports from Salish Cliffs and Semiahmoo, two Washington golf resorts, that business has boomed since the governor allowed golf courses to reopen. International travel is projected to stay stagnant for five years, and Chambers Bay could benefit from increased domestic demand for regional destination golf.
That’s the glass-half-full way of looking at things. The glass-half-empty perspective is aware that golf popularity in the US has steadily eroded over the last two decades, and that rounds played on Seattle-Tacoma metro golf courses have declined by around 8 percent since 2008.
Soggy Northwest weather gives us short seasons, and a suburban location puts Chambers Bay at a competitive disadvantage.
One of the consultants hired to do a market and budget impact analysis of Chambers Creek Properties put it bluntly at the council presentation Tuesday.
“A hotel is a very, very marginal project that clearly needs rental units to support it and clearly only makes sense if it can help support the golf course,” said Jon Peterson of Peterson Economics. “And then you throw coronavirus on top of this.
“All I can say is, clearly until coronavirus is resolved, none of this comes anywhere close to making sense and it would need to be reevaluated after that.”
While we agree caution is warranted, building a resort remains the best hope for a publicly funded golf course that breaks even. Here are four steps that could help pave the way.
* Amend the agreement to reduce the number of lodging units and allow the hotel and villas to be financed separately. Absher-Putnam says these changes are needed to get the project moving.
* Negotiate all contract changes bilaterally with the county executive and council. When the original agreement was drafted last year, council members felt left out of the loop.
* Don’t rely too heavily on the market analysis presented to the council this week. It was completed pre-coronavirus and has been sitting on a shelf since March. It needs revisions.
* Keep an open mind to make bold changes at Chambers Bay, like eliminating the walking-only rule and introducing golf carts.
It took visionary thinking to sculpt a magnificent regional park and golf course from an old gravel pit. It will take more of that to stop hemorrhaging taxpayer money and keep Chambers Bay alive.