You need only look at the flickering fortunes of the Olomana Golf Course in particular and trends in the industry in general to understand why the city is promoting a proposed partnership with Topgolf at the Ala Wai Golf Course.
If approved by the Honolulu City Council and state Board of Land and Natural Resources, Dallas-based Topgolf USA Inc. would receive a 20-year lease, with options, to renovate and take over operation of the driving range at Ala Wai.
It is pledged to preserving the existing 18-hole golf course and clubhouse.
By partnering with the city on the driving range, Topgolf would invest $50 million of non-public funds in a multi-tiered high tech range along the lines of 40 others it operates in the U. S. and abroad. It would, organizers pledge, exist in the same footprint as the current range.
The deal calls for Topgolf to pay the city at least $1.02 million in rent on a graduating scale plus 1 percent of its gross revenue on sales.
Announcement of the deal comes at a time when sustainability is a growing issue as golf courses, especially public ones, are hard pressed to keep up the kind of revenue numbers required to maintain and support their bottom lines.
Olomana closed briefly last month before paying the state $115,275 in delinquent rent to re-open.
The Topgolf agreement is an example of the so-called “p-3” — public-private partnership — deals that cities and states are increasingly looking at to help fund operations.
Even the Ala Wai, which was home to 220,000 rounds in its heyday, has seen traffic drop to almost half of that. A city official has said the Ala Wai driving range brings in $500,000-$600,000 in annual gross revenue. The numbers are projected to grow significantly with the appeal of the new technology.
Overall, revenues have been dropping at the six city-owned courses.
In the Topgolf format, golfers drive balls containing microchips at a selection of targets. The chips provide data for scoring and analysis. Golfers hit balls from multi-level bays. The facility is also to include dining and entertainment options.
The Topgolf is said to particularly appeal to millennials, a demographic diminishing in its participation in the sport. According to officials, half of the 13 million who played Topgolf last year were new to the game.
According to the National Golf Foundation, the number of golf course closings outpaced openings as the total number of operating courses in the U. S. fell by 171 in 2016, the New York Times reported.
The concern at the moment is what the multi-level structure might look like. The models can vary by city — from California to New Jersey and several countries — last thing the city needs is for it to resemble some monster home. A spokesman said it will be “no more intrusive than the current driving range structure (at Ala Wai) and, in many ways, better.”
Some state officials had envisioned a Topgolf site as part of a new or renovated Aloha Stadium. But it could still be years before a decision is made on what to do with the current facility in Halawa.
Meanwhile, an efficiently-run facility at the Ala Wai could be a boon to the city’s golf operations.
Reach Ferd Lewis at flewis@staradvertiser.com or 529-4820.