golf market and financial analysis for the proposed ferry point … · 2016. 5. 23. · golf market...

Golf Market and Financial Analysis For the Proposed Ferry Point Park Golf Club

in Bronx County, New York

Prepared For: Nugent Golf, Inc.

Mr. Tim Nugent

Prepared By:

1150 South U.S. Highway One, Suite 401 Jupiter, Florida 33477

561-744-6006

October 2006

Golf Market and Financial Analysis For the Ferry Point Park Golf Club

Table of Contents INTRODUCTION ............................................................................................................. 1

EXECUTIVE SUMMARY ................................................................................................ 1

Project Description .............................................................................................................. 1 Development Scenarios ...................................................................................................... 2 Operational Scenarios ......................................................................................................... 2 Factors That May Affect Golf Demand ................................................................................ 3

Overall Site Attractiveness ............................................................................................................ 3 Accessibility ................................................................................................................................... 3 Demographic Issues ...................................................................................................................... 3 Key Economic Factors................................................................................................................... 4

Golf Market Overview .......................................................................................................... 5 Golf Demand ................................................................................................................................. 5 Golf Supply .................................................................................................................................... 5

New York City Municipal Golf Operations ............................................................................ 6 National Premier Municipal Golf Course Analysis ............................................................... 6 Market Opportunity Conclusions ......................................................................................... 7

Positive Factors ............................................................................................................................. 7 Negative Factors ........................................................................................................................... 8

Financial Overview .............................................................................................................. 9 Results – High-End Option ............................................................................................................ 9 Results – Mid-Tier Option ............................................................................................................ 10

THE FERRY POINT PARK GOLF CLUB PROJECT DESCRIPTION .......................... 11

Site Location ......................................................................................................................12 Development and Management Scenarios .........................................................................13 Operational Considerations ................................................................................................13

Target Markets ............................................................................................................................ 14

FACTORS THAT MAY AFFECT GOLF DEMAND ............... ........................................ 16

Overall Site Attractiveness .................................................................................................16 Accessibility .......................................................................................................................16 Market Area Overview ........................................................................................................18

Defining the Market ..................................................................................................................... 18 Demographic Overview ............................................................................................................... 18 Key Economic Factors................................................................................................................. 20

GOLF MARKET OVERVIEW .............................. .......................................................... 22

National Trends ..................................................................................................................22

Predicted Golf Demand in New York City/New York City Market ........................................23 Estimated New York City Area Golf Demand 2005-2010 ........................................................... 23 NGF Golf Demand Indices .......................................................................................................... 24 Corporate Market Demand .......................................................................................................... 25 Visitor Golf Demand .................................................................................................................... 25

Supply Indicators ...............................................................................................................26 Golf Course Supply ..................................................................................................................... 26 New York City Regulation Length Golf Course Supply ............................................................... 27 Significant Findings – Golf Course Supply .................................................................................. 28

New York City Municipal Golf Operations ...........................................................................29 Fees ............................................................................................................................................. 30 Activity Levels and Trends .......................................................................................................... 31

National Premier Municipal Golf Course Analysis ..............................................................32 Comparative Operating Data ....................................................................................................... 33 Significant Findings – National Premier Municipal Golf Courses ................................................ 35

MARKET OPPORTUNITY CONCLUSIONS .................... ............................................. 36

Positive Factors .................................................................................................................36 Negative Factors ................................................................................................................37 Market Opportunity Conclusions and Projected Play Levels ...............................................38

FINANCIAL OVERVIEW ................................ ............................................................... 40

High-End Option ................................................................................................................40 Activity Levels/Departmental Revenues ...................................................................................... 40 Proposed Fee Schedule .............................................................................................................. 41 Cash Flow Statement .................................................................................................................. 42 Results ......................................................................................................................................... 43

Mid-Tier Option ..................................................................................................................44 Activity Levels/Departmental Revenues ...................................................................................... 44 Proposed Fee Schedule .............................................................................................................. 45 Cash Flow Statement .................................................................................................................. 45 Results ......................................................................................................................................... 47

APPENDICES ............................................................................................................... 48

Appendix A: Range Pro Forma ..........................................................................................49 Appendix B: Financing Options ..........................................................................................50

Equity Funding ............................................................................................................................. 50 Debt Funding ............................................................................................................................... 51 Terms........................................................................................................................................... 52

Appendix C: Demographic Detail .......................................................................................54 Appendix D: Explanation of National Price Points ..............................................................65 Appendix E: Proposed License Fee Schedule ....................................................................66

Appendix F: Projected Cash Flow Analyses .......................................................................67 High-End Developer Builds ......................................................................................................... 67 High-End City Builds .................................................................................................................... 68 Mid-Tier Developer Builds ........................................................................................................... 69 Mid-Tier City Builds ..................................................................................................................... 70

National Golf Foundation Consulting, Inc. – New York City Ferry Point Park Golf Course – 1

Introduction

National Golf Foundation Consulting, Inc., (NGF Consulting) a subsidiary of the National Golf Foundation, was retained by Nugent Golf, Inc. of Vernon Hills, Illinois to assist in determining the feasibility of the City of New York constructing a new golf course at the City’s Ferry Point Park in the Bronx, New York. The overall project, to be completed on a remediated landfill site near the northern base of the Whitestone Bridge, is to be anchored by a World-Class 18-hole, 7,000+ yard links-style golf course, and will also include a waterfront park and a community park. NGF Consulting will refer to the golf course as “Ferry Point Golf Club” throughout this report.

Under consideration for this market study is the projected financial performance of Ferry Point Park Golf Club if it were to be developed in conjunction with the Ferry Point Park development. Central to the financial feasibility of the project are the:

• Size and strength of the public access golf market across various price points, and the market’s ability to support additional public golf

• Appropriateness of the price points for golf fees

• Historical performance of other NYC golf facilities, as well as national high-end municipal comparables

• Recent changes to the local golf market dynamics

• Expected operating condition of the Ferry Point Golf Club

• Expense to operate and maintain the facility

• Expected financial operating performance of the proposed facility

To examine the market, NGF Consulting Project Director Ed Getherall spent the period of October 2nd through October 4th in the New York City area. The consultant’s activities included an extensive tour of the selected Ferry Point Park site, visits to other NYC golf courses in the market area, and meetings with City representatives and Tim Nugent of Nugent Golf, Inc.


Executive Summary

The following is a summary list of significant findings made by National Golf Foundation Consulting, Inc. The supporting text and tables are found in the body and appendices of the attached report. NGF Consulting has studied the golf market in the south Bronx and greater New York City area, with special focus on the market and financial potential of building and operating a new high-end municipal golf course at the Ferry Point Park site. NGF Consulting has weighed the factors presented in the following report and concluded that there is a strong market opportunity for Ferry Point Golf Club, as proposed. Our national comparable analysis illustrates activity levels that are achievable at premier municipal facilities – especially those in proximity to large population bases. Of the two potential operating scenarios we analyzed, it appears that the new golf facility would produce significantly higher net revenues if positioned as a high-end club, as opposed to a golf course at the mid-tier quality level. Of course, the projected operating results must be considered in context with the construction cost estimates that are the other component of this feasibility study.

PROJECT DESCRIPTION

The City of New York is currently considering the development of a new 18-hole regulation-length golf facility to serve as the centerpiece amenity for the proposed Ferry Point Park Development. The golf club would be built on a 200+ acre remediated landfill site adjacent to the existing Community Park and the East River The overall development will include an expansion and renovation of existing facilities to include a new waterfront park and community park. The golf club itself is expected to comprise the following features:

• A par 72, 18-hole World-Class links-style golf course in excess of 7,000 yards

• A full service clubhouse (15,000 to 24,000 square feet, depending on how club is positioned in market), to include: pro shop; bar/grille; commercial kitchen; banquet facilities/break-out rooms; locker rooms/bag storage; and, cart storage at ground level

• A comprehensive practice facility to include a double-sided driving range (approximately 45 tee stations), chipping/ putting/sand areas, and a teaching area/golf academy on the non-commercial end of the range

• Maintenance facility

The final design of the golf course, which is currently being graded in accordance to a plan developed by Nicklaus Design by the current licensee, is expected to be one of high quality that accentuates the vistas of the Bridges, Long Island Sound/East River and the New York City skyline. Although the golf course design has not been finalized, it is expected that the facility will feature four to five sets of tee boxes on each hole, with the shortest layout playing to around 5,000+ yards and the championship tees of more than 7,000 yards.


DEVELOPMENT SCENARIOS

At this writing, it is uncertain whether the City itself or a private licensee will ultimately build the golf course. The results of this study, in terms of both expected development costs and the projected net cash flows from operations, will help determine the terms of the Request for Proposals (RFP) issued for the development and operation of Ferry Point Golf Club.

Several possible scenarios exist, including:

1. Private entity (possibly current licensee) pays for entire cost of development of the golf course and support amenities, and pays license fees based on gross revenues from operations.

2. Private entity (possibly current licensee) pays for part of the cost of development of the golf course and support amenities, with City funding the remainder. Private operator then pays license fees based on gross revenues from operations.

3. City of New York builds the golf course and issues RFP only for operation of the golf course; private operator pays license fees to City based on gross revenues.

OPERATIONAL SCENARIOS

Two basic operating scenarios were evaluated in this study:

1. Ferry Point GC positioned as a premier high-end municipal facility with green fees at or above $100 and a large clubhouse with extensive banquet/meeting capabilities.

2. Ferry Point GC positioned as a high quality municipal golf course, but with fees closer to, but moderately higher than, those at the City’s existing golf facilities and a clubhouse on a smaller scale.

Option 1 will offer a higher quality facility that can be marketed as a destination golf course, able to draw golfers from a wider geographic area than just the five boroughs. It will clearly be the best public golf course within the City, and should offer broad appeal to area visitors, as well as the local corporate market. Tournament/outing business would be a strong staple of activity at the high-end club.

Under Option 2, Ferry Point Golf Club, though still of a very high quality, would be positioned for significantly higher utilization and market penetration, with much lower green fees than Option 1, but moderately higher than those at the City’s other golf courses. The golf course would be of similar quality under either option, but the clubhouse would be on a smaller scale, so development costs will be less.

NGF Consulting expects that Ferry Point Park Golf Club will be able to attract golfers from several market segments: residents of the five boroughs; out-of-area visitors to New York City; regional residents; and, area corporations and other organizations in the form of outing play.

1. New York City Residents – Residents of the Bronx and the other four boroughs are expected to form the core market of frequent users due to the proximity to the site and the local transportation infrastructure. It is not necessarily expected that play from the Bronx will be larger in volume than play from the rest of the City, especially at the higher fee structure.


2. Visitors to the Area - About 42 million people visited New York City in 2005. Tourists have the potential to have a significant impact on demand at area golf courses.

3. Other Regional Residents – Golfers who live in Rockland and Westchester Counties, the rest of the Lower Hudson Valley, and on Long Island (especially Nassau County) will represent a secondary resident market for the new facility. Additionally, occasional play can be expected from New Jersey and southeast Connecticut.

4. New York City Corporate Market – The greater New York City metro area is home to many large corporations. These organizations are prime candidates for tournaments and outings, which are crucial to filling off-peak tee times and are typically sold at the highest green fees. Additionally, NGF Consulting expects that the new facility will draw individual golfers and foursomes that work in Manhattan and the other boroughs, particularly if ferry service is resumed between the Wall Street are and Ferry Point Park.

FACTORS THAT MAY AFFECT GOLF DEMAND

Overall Site Attractiveness

NGF Consulting envisions a links style golf course, designed by a world-renowned golf architect such as Jack Nicklaus, to be extremely visually pleasing. The views of the Long Island Sound/ East River, as well as the Whitestone and Throgs Neck Bridges and the New York City skyline, will greatly enhance the aesthetic value of the course. Assuming there are no negative affects, such as unexpected settling or the smell of methane gas, due to the nature of the site (former landfill), the overall site attractiveness is a positive.

The most significant potential negatives regarding the site are the possibility of trouble accessing the club due to traffic issues, the tolls in each direction to Queens (as well as one way from New Jersey on the GW Bridge), and the somewhat negative perception that some out-of-towners have about the Bronx.

Accessibility

Under good traffic conditions, the Ferry Point site is very accessible via automobile to much of the New York metro area. The park sits at the northern base of the Whitestone Bridge, and is accessible directly via the service road the Hutchinson River Parkway. It is also proximate to the Throgs Neck Bridge (I-295) which, like the Whitestone, connects the Bronx to Queens, Brooklyn and Long Island. Several other highways and bridges across the Harlem River connect the west Bronx with Manhattan. Though there is currently no mass transit available directly to the site, NGF Consulting has been told that the possibility of resumed ferry service between Ferry Point Park and Manhattan is possible in the future should it prove viable.

Demographic Issues

NGF Consulting has made the following observations regarding the local demographics.

• With more than 1.37 million residents, Bronx County offers a large permanent population in immediate proximity to the Ferry Point Park site. There are about 6 million people living within 10 miles of the site, and approximately 8.15 million living within the five boroughs of New York City.


• The median household income in Bronx County is considerably lower than the New York metro region and the State of New York, and about 33% lower than the U.S. figure. However, the overall New York DMA has household incomes 24.5% higher than the nation overall, and incomes in York City are 9.7% higher the U.S. figure. In general, higher income residents are more likely to participate in golf, and also play more frequently than lower income golfers.

• Nearly 69% of Bronx County households are below $50,000 in income, compared to the U.S. number of 54.3%. However, New York’s five boroughs include more than 509,000 households that are $100,000 or higher in median household income. Applying the national golf participation rate of 12.6% to this figure, we can identify about 64,200 golfing households in New York City with relatively high household incomes; these households are likely to be prime candidates to play at Ferry Point Golf Club. This statistic is mitigated somewhat by the relatively high cost of living in the region.

• Despite a high overall number of relatively upper incomes households, NGF Consulting believes that, in order to sustain sufficient play at Ferry Point Golf Club, penetration into secondary and even tertiary markets will likely be necessary to supplement resident and corporate play from New York City. This is especially true if the club is positioned at the higher price points. These other geographic markets include Rockland and Westchester Counties, Long Island, New Jersey, and Connecticut.

Key Economic Factors

There are a few aspects of the greater New York City economy that have the potential to have impact on the success of the proposed Ferry Point Golf Club.

• The greater New York City area is home to many large corporations, including many headquarters. A full-time staff person devoted to direct selling of tournaments/outings to these groups could have a huge impact on filling tee sheets at the new club, especially during off-peak periods such as weekdays.

• NYC & Company - the City's official tourism marketing organization - reported 42.6 million visitors to New York City in 2005: Visitor spending was estimated at $22.8 billion. These visitors have the potential to have a significant impact on area golf operations.

• NGF Consulting has noted a nationwide dynamic of declining rounds played, caused by several factors, including an increasing supply of public golf courses fighting for shares of stagnant markets, an uneven economy, the aftereffects of the September 11 tragedies, and increasing constraints regarding discretionary time and money for many people, especially working families.

• One of the economic trends that seems to have affected play at higher price points in just the last few years has been the rapid increase in the cost of living, especially as it relates to housing, homeowners insurance, property taxes, medical care, and fuel. There simply is not as much discretionary income for many households. In New York City, this problem is exacerbated, as the cost of living was already very high compared to nearly every market in the country. This is a potential concern for Ferry


Point Golf Club, especially since the proposed green fees are unprecedented at municipal golf courses in this market.

GOLF MARKET OVERVIEW

Golf Demand

NGF Consulting uses predictive models as benchmarks for estimating potential market strength. These benchmarks are then compared to the actual performance of golf courses in and around the New York City area in an effort to establish reasonable parameters, within which the proposed new Ferry Point Golf Club will be expected to operate.

• While the New York City DMA is the largest golf market in the United States in terms of total demand, actual golf participation rates and rounds demanded per household are very low relative to national benchmarks. This is due largely to a demographic profile that is not conducive to high golf demand. However, due to the sheer size of the population, estimated rounds demanded in the market is a very large number.

• NGF Consulting has estimated approximately 235,000+ permanent resident golfing households within 10 miles of Ferry Point Park, capable of demanding 2.3 million rounds of golf annually. Locally, we estimate 31,000+ golfing households demanding about 338,000 rounds annually in Bronx County.

• The New York City area is home to a very large number of major corporate and public employers. Although potential corporate demand for public golf rounds and/or memberships is difficult to quantify, it is clear that the operators of the Ferry Point Park Golf Course should target this market by emphasizing the ease of access from Manhattan. This corporate/organizational tournament play can augment the daily fee rounds expected from the primary and secondary resident markets, especially during off peak periods. Some corporations may also want to pre-pay for certain blocks of times, in order to offer perks to employees or to entertain clients.

• About 42 million people visited New York City in 2005. These visitors have the potential to have a significant impact on demand at area golf courses. NGF research shows that roughly one-third of all golfers participate in the activity while traveling, playing .557 rounds per day of travel. Using very conservative estimates for annual visitors, the potential demand for golf from New York City area tourists is more than 700,000 rounds annually. These visiting golfers could be especially important for a high-end golf course such as is proposed at Ferry Point, as traveling golfers often exhibit high incomes and are typically much less price sensitive than resident golfers.

Golf Supply

Below are NGF Consulting’s findings regarding overall golf course supply in the greater New York City area:

• The New York DMA is home to 536 golf facilities, nearly evenly split between public and private. As noted earlier, the New York DMA ranks first in the nation for number of golf courses.

• There are three golf facilities located in the Bronx – the City’s 36-hole Pelham/Split Rock, 18-hole Van Cortlandt Park, and 9-hole Mosholu Golf Course. New York’s five


boroughs have 15 total golf facilities (13 public); all of the regulation length public golf courses within the five boroughs are owned by the City.

• Other than the other NYC municipal golf courses, the closest potential competitors to Ferry Point Golf Club include several municipal golf courses located in Westchester County: Dunwoodie, Sprain Lake, Lake Isle Town Park, Saxon Woods, and Maple Moor. Of these, Sprain Lake is probably the closest to Ferry Point in terms of price point, with peak season green fees, cart inclusive, of about $85.

• The population base of New York City supports 279 total holes of golf, resulting in a household supply ratio that is 2700% higher than we see in the nation as a whole. In other words there are nearly 30 times as many households available to support each 18 holes of golf than there are in the overall U.S.

• NGF Consulting notes that there are no golf courses at a premium price point within the City’s five boroughs (please see Appendix D for explanation of NGF Price Point Index), indicating a possible niche for the Ferry Point Golf Club, as proposed.

• The overall DMA does have some premium municipal golf courses, though, with the exception of Lake Isle, they are all a significant drive time from Ferry Point Park. They include: Passaic County Golf Course and Paramus Golf Club in northern New Jersey; Spook Rock Golf Course in Rockland County, NY; Harbor Links Golf Course in North Hempstead, Long Island; and Sterling Farms Golf Course in Fairfield, CT. Of these, Harbor Links is the closest to Ferry Point in terms of fees, with peak season weekend non-resident rates of $106 (cart is mandatory and included on weekends); the corresponding resident green fee is $71.

NEW YORK CITY MUNICIPAL GOLF OPERATIONS

The New York City municipal golf system comprises twelve facilities – all 18-hole regulation courses with the exception of 36-hole Pelham/Split Rock, 18-hole executive length Kissena Park, and 9-hole regulation course Mosholu Golf Course in the Bronx. All of the City’s golf facilities are privatized, with concessionaires paying license fees to the City based on gross receipts. American Golf Corporation manages eight of these facilities, including Pelham/Split Rock and Van Cortlandt Park in the Bronx.

Rounds played system-wide peaked at about 917,000 in 1998, with Pelham/Split Rock accounting for 122,000 by itself – an incredible number, even for 36 holes, in this climate. Beginning in 1999, rounds played began a precipitous decline, bottoming out at about 597,000 in 2003 – a decrease of 35% over that time period. Activity has rebounded somewhat the last two years. Gross receipts and license fees to the City were up marginally in 2005, despite a moderate decrease in rounds between 2004 and 2005. Overall, license fees, as a percentage of gross revenue, averaged about 26.7% in 2004 and 2005.

NATIONAL PREMIER MUNICIPAL GOLF COURSE ANALYSIS

Because Ferry Point Golf Club may very well be positioned at price points that are unprecedented for municipal golf courses in the New York City market, NGF Consulting felt it would be very instructive to analyze comparative operating data from some of the nation’s top municipal facilities. The golf courses analyzed comprise a representative subset of facilities that are considered to be among the best municipal courses in the nation. Criteria used to pick them


include quality of golf course, national reputation, current or previous affiliation with professional tournaments, and fee levels. NGF Consulting’s relevant observations regarding the national premier municipal golf courses are summarized below.

• Average peak season resident green fees at the national courses we profiled were $49 weekdays and $53 weekends, cart included. Average peak season non-resident rates were $122 and $132, respectively. Cart fees are included in green fees at the majority of the profiled courses. The fee disparity between residents and non-residents is reflective of the typical operating model at very high-end municipal courses: non-residents pay much higher fees so that residents can still enjoy affordable golf at a premium facility.

• Among our sampling of high-end national municipal golf courses, residents paid an average of only 41% to 42% of the corresponding fees for non-residents. Black Gold Golf Course in Yorba Linda, California offered the smallest discount to residents, at about 20% on average. Peak season resident rates at Long Island’s Bethpage Black were 50% of non-resident green fees.

• Average rounds played among the subject premium municipal courses were about 49,000 per 18 holes – numbers that are more typical of premium daily fee courses. However, the number is skewed upward because many of these courses are located in the Sunbelt. Rounds played at Bethpage ‘Black’ were only 33,000 in 2005, as play is capped on this very difficult course.

• Resident play accounted for an average of about 50% of total play at the national comparables. At both Torrey Pines and Harding Park, it is mandated by City Council that residents must account for 65% of total rounds played.

MARKET OPPORTUNITY CONCLUSIONS

NGF Consulting’s market opportunity conclusions for Ferry Point Golf Club were based on the expected quality and market positioning of the proposed golf club, our analysis of the local golf supply and demand dynamic for public golf, and local and regional demographic and economic factors. The analysis revealed a number of positive and negative factors that have the potential to have the most bearing on the potential viability/success of Ferry Point Golf Club. These factors are covered in detail in the body of this report, and summarized below.

Positive Factors

• The product concept reveals a very high quality golf course that will feature beautiful views of the Long Island Sound, Whitestone and Throgs Neck Bridges, and New York City skyline. Even if the lower fee option is chosen, Ferry Point Golf Club will be the premier golf facility in New York City.

• The new course will have a huge population base from which to draw. With more than 1.37 million residents, Bronx County offers a large permanent population in immediate proximity to the Ferry Point Park site. There are about 6 million people living within 10 miles of the site, and approximately 8.15 million living within the five boroughs of New York City. Finally, there are nearly 21 million people living in the greater New York City metro area (DMA, or Designated Market Area).


• The population base of New York City is so large that there are nearly 30 times as many households available to support each 18 holes of golf in the five boroughs than there are in the overall U.S.

• There are no premium public golf courses located in New York City, indicating a possible niche for the Ferry Point Golf Club, as proposed. The overall DMA does have some premium public access golf courses, including several municipal facilities. However, with the exception of Lake Isle in Eastchester, they are all a significant drive time from Ferry Point Park and from many areas of New York City.

• Ferry Point Park benefits from excellent accessibility due to the strong transportation infrastructure. Under good traffic conditions, the Ferry Point site is very accessible via automobile to much of the New York metro area.

• There is a corporate presence in greater New York City that is unmatched anywhere in the country. A full-time staff person devoted to direct selling of tournaments /outings to these groups could have a huge impact on filling tee sheets at the new club, especially during off-peak periods such as weekdays. Also, resident and corporate play will be supplemented with significant visitor demand.

• There appears to be a notable shortage of high quality banquet facilities in the five boroughs, indicating an opportunity for the Ferry Point Golf Club to do a significant volume of this high margin business.

Negative Factors

• While a new golf course would obviously benefit from New York City’s very large population (the New York DMA is the largest golf market in the United States in terms of total demand), actual golf participation rates and rounds demanded per household are very low relative to national benchmarks. This is due largely to a demographic profile that is not conducive to high golf demand.

• The proposed green fees are unprecedented for municipal golf courses in this market, especially with regard to the resident rates. Though our analysis of premier national municipal golf courses revealed that these facilities can generate high activity levels and sustain high non-resident rates, there is little precedent for resident green fees as high as proposed for Ferry Point Golf Club.

• Though we have no reason to expect anything out of the ordinary, the fact that the site for the golf club is a former landfill site may lead to potential issues, such as unexpected settling of the course, or the smell of methane gas.

• Traffic along some of the highways noted in this report can be a nightmare at times. A few bad experiences on the way to Ferry Point could make some golfers reluctant to return there to play, at least with any frequency. Also, tolls on local bridges (including $4.50 each way on Whitestone, Throgs Neck) will add to the cost of a round of golf and may preclude the more price sensitive golfer from patronizing Ferry Point Golf Club.

• As noted with the existing New York City golf courses, activity levels are down locally, regionally, and nationally since the late 1990s, with the biggest drop-offs occurring during off peak periods such as weekdays. Among the reasons for this are


an oversupply of public golf courses, an uneven economy, a spiraling cost of living, the aftereffects of the September 11 tragedies, and increasing constraints regarding discretionary time and money for many people, especially working families.

• These uncontrollable factors that can affect activity levels and revenues from year to year mean that money invested in a project such as Ferry Point Golf Club is money at risk. For instance, the after effects of another terrorist attack on New York City, or even elsewhere in the nation, could have a huge negative impact on play, especially if the club is positioned at green fees that are untested in the City.

• Though New York City is technically a 12-month golf market, there is extreme seasonality with regards to activity levels. In other words, the cold weather months effectively constrain maximum capacity.

NGF Consulting weighed the factors discussed above and concluded that there is a strong market opportunity for Ferry Point Golf Club, as proposed. Our national comparable analysis illustrates activity levels that are achievable at premier municipal facilities – especially those in proximity to large population bases. The projected financial performance of the club under both development scenarios is summarized below. Of course, the projected operating results must be considered in context with the construction cost estimates that are the other component of this feasibility study.

FINANCIAL OVERVIEW

For the financial analysis for Ferry Point Golf Club, NGF Consulting prepared two cash flow models, based on the following operating models (the general assumptions that were used in the development of NGF Consulting’s cash flow model are contained in the body of the report):

1. The development and operation of a high-quality 18-hole links-style golf facility, featuring a large clubhouse of about 24,000 square feet) with practice facility, learning center, and appropriate support amenities, and maintained and operated to the standards of the upper tier of municipal golf courses across the nation. The club would be positioned as one of the premier municipal facilities in the U.S., with non-resident green fees in excess of $100.

2. The development and operation of an 18-hole golf course of similar quality, but with clubhouse on a smaller scale (approximately 15,000 square feet) and price points closer to, but moderately higher than, the existing inventory of courses in the NYC municipal golf system.

Results – High-End Option

The results of NGF Consulting’s preliminary cash flow projection show that the Ferry Point Golf Club, positioned as a premium municipal golf course, can expect to generate approximately $5.875 million in total operating revenues in the first full year of operation, growing to approximately $11.01 million by the fifth year of operation. Considering all preliminary expense estimates prepared by NGF Consulting for this study, earnings before interest, taxes, depreciation, and amortization will be about $768,000 in the first year of operation, while total annual operations profit available for capital investment reduction will be about $3.69 million by the fifth year of operation. These results assume that the licensee builds the golf course, thus reducing the projected license fees to the City.


Based on NGF Consulting’s analysis of the local golf market and the resulting net cash flow projections, we estimate the warranted level of investment (estimated supportable debt) for this project to be roughly $40.4 million. Supportable debt level is based upon fifth year net operating income with a debt coverage ratio of 1.25, over a 35-year amortization schedule and with an interest rate of 6.5 percent.

The estimated supportable debt level is based on the use of operating cash flows toward the reduction of debt associated with the golf course and clubhouse construction and other initial capital costs such as purchase/lease of equipment. The level of supportable debt is highly sensitive to fluctuations in financing terms, and NGF Consulting makes no assertions as to the potential borrower’s ability to obtain financing.

Results – Mid-Tier Option

The results of NGF Consulting’s preliminary cash flow projection show that the Ferry Point Golf Club, positioned as a mid-tier municipal golf course, can expect to generate approximately $4.35 million in total operating revenues in the first full year of operation, growing to approximately $6.55 million by the fifth year of operation. Considering all preliminary expense estimates prepared by NGF Consulting for this study, earnings before interest, taxes, depreciation, and amortization will be about $479,000 in the first year of operation, growing to about $1.6 million by the fifth year of operation. These results assume that the licensee builds the golf course, thus reducing the projected license fees to the City.

Based on NGF Consulting’s analysis of the local golf market and the resulting net cash flow projections, we estimate the warranted level of investment (estimated supportable debt) for this project to be roughly $17.5 million, assuming the licensee builds the golf course. Supportable debt level is based upon fifth year net operating income with a debt coverage ratio of 1.25, over a 35-year amortization schedule and with an interest rate of 6.5 percent.


The Ferry Point Park Golf Club Project Description

The City of New York is currently considering the development of a new 18-hole regulation-length golf facility to serve as the centerpiece amenity for the proposed Ferry Point Park Development. The golf club would be built on a 200+ acre remediated landfill site adjacent to the existing park. The overall development will include an expansion and renovation of existing facilities to include a new waterfront park and community park. The golf club itself is expected to comprise the following features:

• A par 72, 18-hole World-Class, links-style golf course of approximately 7,000 yards

• A full service clubhouse (15,000 to 24,000 square feet, depending on how club is positioned in market), to include: pro shop; bar/grille; commercial kitchen; banquet facilities/break-out rooms; locker rooms/bag storage; and, cart storage at ground level

• A comprehensive practice facility to include a double-sided driving range (approximately 45 tee stations), chipping/ putting/sand areas, and a teaching area/golf academy on the non-commercial end of the range

• Maintenance facility

The final design of the golf course, which is currently being graded and shaped, is expected to be one of high quality that accentuates the vistas of the Bridges, Long Island Sound/East River and the New York City skyline. Although the golf course design has not been finalized, it is expected that the facility will feature four to five sets of tee boxes on each hole, with the shortest layout playing to around 5,000+ yards and the championship tees of more than 7,000 yards. Some photos of the selected site are shown below:

Selected views of the Ferry Point Park site.


SITE LOCATION

The subject property is located at the southeast corner of Bronx County, New York, directly across Long Island Sound from the Whitestone/College Point area of northern Queens.

Site Location Local Context

Site Location – Regional Context


DEVELOPMENT AND MANAGEMENT SCENARIOS

At this writing, it is uncertain whether the City itself or a private licensee will ultimately build the golf course. The results of this study, in terms of both expected development costs and the projected net cash flows from operations, will help determine the terms of the Request for Proposals (RFP) issued for the development and operation of Ferry Point Golf Club.

Several possible scenarios exist, including:

1. Private entity (possibly current licensee) pays for entire cost of development of the golf course and support amenities, and pays license fees based on gross revenues from operations.

2. Private entity (possibly current licensee) pays for part of the cost of development of the golf course and support amenities, with City funding the remainder. Private operator then pays license fees based on gross revenues from operations.

3. City of New York builds the golf course and issues RFP only for operation of the golf course; private operator pays license fees to City based on gross revenues.

OPERATIONAL CONSIDERATIONS

As noted, NGF Consulting has assumed that the facility will be operated privately under a license agreement, as are the City’s twelve existing golf courses (but likely under different terms). Regardless of who ultimately operates the golf course, two basic operating scenarios will be evaluated:

1. Ferry Point GC positioned as a premier high-end municipal facility with green fees at or above $100 and a large clubhouse with extensive banquet/meeting capabilities.

2. Ferry Point GC positioned as a high quality municipal golf course, but with fees closer to, but moderately higher than, those at the City’s existing golf facilities and a clubhouse on a smaller scale.

Option 1 will offer a higher quality facility that can be marketed as a destination golf course, able to draw golfers from a wider geographic area than just the five boroughs. It will clearly be the best public golf course within the City, and should offer broad appeal to area visitors, as well as the local corporate market. Tournament/outing business would be a strong staple of activity at the high-end club. The biggest advantage to this operating structure is likely to be higher revenues. The disadvantage is that the scale and quality of the support amenities (e.g., clubhouse) will increase the cost of the facility and consequently the risk of the project. Additionally, at the proposed price points, a large segment of the resident market will be unable to afford the green fees.

Under Option 2, Ferry Point Golf Club, though still of a very high quality, would be positioned for significantly higher utilization and market penetration, with much lower green fees than Option 1, but moderately higher than those at the City’s other golf courses. The golf course would be of similar quality under either option, but the clubhouse would be on a smaller scale, so development costs will be less. Additionally, expectations of maintenance standards would be more commensurate with the lower fees, so operating expenses would likely be lower. The results of NGF Consulting’s cash flow model will help determine if the higher rounds played activity will compensate for significantly lower golf fees. Under either scenario, from the


standpoint of New York City and/or the licensee, the proposed golf facility must be capable of retiring development costs and supporting itself operationally.

Target Markets

NGF Consulting expects that Ferry Point Park Golf Club will be able to attract golfers from several market segments: residents of the five boroughs; out-of-area visitors to New York City; regional residents; and, area corporations and other organizations in the form of outing play.

1. New York City Residents – Residents of the Bronx and the other four boroughs are expected to form the core market of frequent users due to the proximity to the site and the local transportation infrastructure. It is not necessarily expected that play from the Bronx will be larger in volume than play from the rest of the City, especially at the higher fee structure. The lack of mass transit at the Ferry Point site may prove a detriment to activity levels, especially if the club is positioned at lower price points. Additionally, Bronx golfers can reach the site by auto without tolls, but many other residents will have tolls with auto transportation (e.g., $4.50 both ways on Whitestone and Throgs Neck Bridges for people coming from Queens, Brooklyn, or Long Island).

2. Visitors to the Area - About 42 million people visited New York City in 2005. Tourists have the potential to have a significant impact on demand at area golf courses.

3. Other Regional Residents – Golfers who live in Rockland and Westchester Counties, the rest of the Lower Hudson Valley, and on Long Island (especially Nassau County) will represent a secondary resident market for the new facility. Additionally, occasional play can be expected from New Jersey and southeast Connecticut. Factors that will suppress the volume of play from these markets include the fact that there are more opportunities in these areas to play high-end public golf than in the City itself, and that traffic conditions may often make the commute to Ferry Point Park unattractive from these markets, despite the relative geographic proximity.

4. New York City Corporate Market – The greater New York City metro area is home to many large corporations. These organizations are prime candidates for tournaments and outings, which are crucial to filling off-peak tee times and are typically sold at the highest green fees. Additionally, NGF Consulting expects that the new facility will draw individual golfers and foursomes that work in Manhattan and the other boroughs, particularly if ferry service is resumed between the Wall Street are and Ferry Point Park.

Once the design and development plan is finalized, NGF expects that a significant marketing effort will be undertaken by New York City to maximize the new course’s exposure and increase awareness in the local and regional market. NGF Consulting suggests the following for Ferry Point Park Golf Club:

1. Preparing a thorough Pre-Opening Plan including details of every activity required through opening.


2. Establishing and publicize Rates and Fees to include all categories of user fees and any corporate/group/hotel guest information, and/or membership information (if applicable).

3. Coordinating Publicity and Media Relations to supplement an early advertising campaign.

4. Developing a detailed Advertising Plan to target the market categories identified above.


Factors That May Affect Golf Demand

The objective of this section is to identify and assess those local factors that may affect the greater New York City’s ability to support the operation of a new public access golf facility at the Ferry Point Park location.

OVERALL SITE ATTRACTIVENESS

NGF Consulting envisions a links style golf course, designed by a world-renowned golf architect such as Jack Nicklaus, to be extremely visually pleasing. The views of the Long Island Sound/ East River, as well as the Whitestone and Throgs Neck Bridges and the New York City skyline, will greatly enhance the aesthetic value of the course. Assuming there are no negative affects, such as unexpected settling or the smell of methane gas, due to the nature of the site (former landfill), the overall site attractiveness is a positive.

The most significant potential negatives regarding the site are the possibility of trouble accessing the club due to traffic issues, the tolls in each direction to Queens (as well as one way from New Jersey on the GW Bridge), and the somewhat negative perception that some out-of-towners have about the Bronx. Additionally, as mentioned previously, the lack of public transportation to the site may affect play levels somewhat, particularly if the club is positioned at the lower price points. (For instance, the general manager at Van Cortlandt Park GC reports that Manhattanites arriving via the One Train and storing clubs at the course is one of his primary markets).

Finally, there will likely be a contingent of golfers who feel that the overall setting is still a highly urban environment – and one not conducive to paying premium green fees. However, it is assumed that the Ferry Point Golf Club, in terms of both the golf course and support amenities, will be of such a high quality in comparison to even the City’s best existing facilities that these types of objections will quickly go by the wayside.

ACCESSIBILITY

Under good traffic conditions, the Ferry Point site is very accessible via automobile to much of the New York metro area. The park sits at the northern base of the Whitestone Bridge, and is accessible directly via the service road the Hutchinson River Parkway. It is also proximate to the Throgs Neck Bridge (I-295) which, like the Whitestone, connects the Bronx to Queens, Brooklyn and Long Island. Several other highways and bridges across the Harlem River connect the west Bronx with Manhattan. Within one mile of the Ferry Point Park site is a major intersection of highways coming from several directions, including the Cross Bronx Expressway (I-95), the Hutchinson River Parkway (I-678), Overview Expressway, and the Bruckner Expressway (I-278).

Though there is currently no mass transit available directly to the site, NGF Consulting has been told that the possibility of resumed ferry service between Ferry Point Park and Manhattan is possible in the future should it prove viable. Below, we note some of the major roadways into the site from other parts of the greater NYC metro area.


• From northern Queens, Nassau/Suffolk Counties � Cross Island Parkway � Long Island Expressway (I-495) � Northern State/Grand Central Parkway

• From southern Queens, Nassau County � Van Wyck/Whitestone Expressway � Cross Island Parkway

• From Brooklyn � BQE (I-278) to LIE to Van Wyck/Whitestone (I-678) � Belt Parkway to I-678

• From upper Manhattan � Triborough, 3rd Avenue, Willis Avenue, Macombs Dam, 145th street, Madison Avenue

Bridges � Henry Hudson Parkway (west side)

• From midtown Manhattan � Queensboro Bridge � Queens Midtown Tunnel

• From lower Manhattan � Brooklyn Battery Tunnel � Williamsburg, Manhattan, Brooklyn Bridges

• From Westchester � New York State Throughway (I-87), New England Throughway � Saw Mill Parkway � Hutchinson River Parkway

• From Rockland County � New York State Throughway/Major Deegan (via Tappan Zee Bridge) � NY State Throughway to I-287 (Cross Westchester) to Hutchinson River Parkway

• From northern New Jersey � Route 80 to GW Bridge to Cross Bronx Expressway (I-95) � Lincoln, Holland Tunnels

• From Connecticut � Hutchinson River Parkway (I-678)


� New England Thruway (I-95) � Merritt Parkway (SR 15) to Hutchinson River Parkway

MARKET AREA OVERVIEW

To appropriately assess the viability of the proposed Ferry Point Golf Club, the environment in which the project will exist must be understood. Specifically, it is helpful to examine local socio-economic and demographic trends that have the potential to impact the success of the new facility. In this section of this report, NGF Consulting will provide an overview of important factors that characterize the primary market area for the proposed facility, including a presentation of the area’s demographics.

Defining the Market

The Golf Consumer Profile, a research document developed by the National Golf Foundation (NGF) in cooperation with Market Facts, Inc., determined that “on the average nationally, golfers travel about 12 miles one way to play their most frequently played golf course. That translates into a 19-minute trip to the average golfer’s most often played course.” The survey also determined that golfers travel a considerable distance farther to regularly play a high quality course. (Average golfers report a willingness to travel just over 26 miles, estimated to be a trip of 36 minutes.) Further, it was determined in the national survey that golfers are willing to travel as far as 48 miles or 60 minutes to occasionally play a good quality golf course; this willingness to travel will be an important element to the potential success of Ferry Point Golf Club, as play from residents of northern New Jersey, Long Island, Rockland/Westchester, and even southeast Connecticut would be priced at the highest green fees.

Based on our knowledge of this market and input from the City’s current golf licensees, NGF expects that the majority of play will come from residents of the five boroughs. However, we also expect up to 40% of play to come from a combination of out-of-area visitors and regional residents (areas noted above) within an hour’s drive time, many of whom work in the City.

Demographic Overview

Utilizing research materials provided by Applied Geographic Solutions, Inc, NGF Consulting has examined relevant characteristics of the local population. In the following table, NGF Consulting indicates basic population, age and income demographic for Bronx County, a 10-mile ring, the New York DMA, the State of New York and the total United States. More detailed Demographics appear in Appendix C to this report.


Population Trends

Bronx County 10 Miles Ferry

Point Park New York City (5 Boroughs)

New Yor k City DMA New York Entire US

Population 1990 1,203,791 5,335,786 7,322,590 18,555,092 17,990,458 248,709,429 2000 1,332,650 5,837,355 8,008,278 20,168,911 18,976,457 281,421,211 CAGR 1990-2000 1.02% 0.90% 0.90% 0.84% 0.54% 1.24% 2006 1,376,377 5,957,302 8,148,734 20,909,666 19,351,094 296,459,203 CAGR 2006-2011 0.65% 0.41% 0.35% 0.72% 0.39% 1.05% 2011 1,410,997 6,067,327 8,279,364 21,493,293 19,644,598 310,728,811 CAGR 2006-2011 0.50% 0.37% 0.32% 0.55% 0.30% 0.94% Median HH Income 2006 $31,271 $43,699 $42,086 $58,016 $49,863 $46,615 Median Age 2006 32.3 36.2 36.0 37.6 37.5 36.2 *CAGR – Compound Annual Growth Rate Source: U.S. Census Bureau, AGS, Inc. and NGF Consulting.

Further data indicates the following general breakdown of households by income classification for 2005.

Bronx

County

10 Miles Ferry Point

Park

New York City (5

Boroughs) New York Entire US

Household Income - 2005

Less than $50,000 68.5% 55.6% 57.1% 52.0% 54.3%

$50,000 - $99,999 22.6% 26.1% 26.1% 29.0% 30.9%

$100,000 - $124,999 4.1% 6.2% 6.2% 7.2% 6.4%

$125,000 - $149,999 1.9% 3.4% 3.4% 3.9% 3.1%

$150,000 Plus 2.9% 8.7% 7.2% 7.9% 5.3%

From the data presented above, NGF Consulting has made the following observations regarding the local demographics.

• With more than 1.37 million residents, Bronx County offers a large permanent population in immediate proximity to the Ferry Point Park site. There are about 6 million people living within 10 miles of the site, and approximately 8.15 million living within the five boroughs of New York City. Finally, there are nearly 21 million people living in the greater New York City metro area (DMA, or Designated Market Area). Projected population growth rates through 2011 in the overall metro area are moderate. Later in this report, we will put this very large population base in context with existing golf course supply in the market.

• The median age in the immediate Bronx County area is considerably younger than that of the State of New York and the nation. The median age for the five boroughs overall is very close to the U.S. median. Generally speaking, a comparatively older


population in a market area tends to increase golf frequency, as older golfers tend to play more often than younger age segments. As a result, lower-than-average rounds played are generally expected in younger markets.

• The median household income in Bronx County is considerably lower than the New York metro region and the State of New York, and about 33% lower than the U.S. figure. However, the overall New York DMA has household incomes 24.5% higher than the nation overall, and incomes in York City are 9.7% higher the U.S. figure. In general, higher income residents are more likely to participate in golf, and also play more frequently than lower income golfers.

• Nearly 69% of Bronx County households are below $50,000 in income, compared to the U.S. number of 54.3%. However, New York’s five boroughs include more than 509,000 households that are $100,000 or higher in median household income. Applying the national golf participation rate of 12.6% to this figure, we can identify about 64,200 golfing households in New York City with relatively high household incomes; these households are likely to be prime candidates to play at Ferry Point Golf Club. This statistic is mitigated somewhat by the relatively high cost of living in the region.

• Despite a high overall number of relatively upper incomes households, NGF Consulting believes that, in order to sustain sufficient play at Ferry Point Golf Club, penetration into secondary and even tertiary markets will likely be necessary to supplement resident and corporate play from New York City. This is especially true if the club is positioned at the higher price points. As discussed earlier, these other geographic markets include Rockland and Westchester Counties, Long Island, New Jersey, and Connecticut.

• New York City has significant minority populations, with African-Americans and Hispanics representing an estimated 25.9% and 28.8%, respectively, of the City’s population. This compares to corresponding national figures of 12.2% and 14.4%, respectively. In 2003, the National Golf Foundation conducted a research study as part of Golf 20/20’s Diversity Task Force, which is developing strategies for player development programs and other initiatives focused on women and minorities. The study found that the golf participation rate is 4.3% for Hispanic Americans aged 18 and older, and 5.1% among African Americans aged 18 and older and, compared to the overall U.S. golf participation rate of 12.6%. The implication for the City’s golf operations is that it is imperative that the municipal golf courses emphasize player development programs aimed at stimulating latent golf demand among minorities in order to create opportunity for all potential golfers and to maximize play at the City’s golf courses.

Key Economic Factors

There are a few aspects of the greater New York City economy that have the potential to have impact on the success of the proposed Ferry Point Golf Club. Some of these factors are also being experienced by golf operators in many other markets nationwide.

Corporate Presence The greater New York City area is home to many large corporations, including many headquarters. A full-time staff person devoted to direct selling of tournaments/outings to these


groups could have a huge impact on filling tee sheets at the new club, especially during off-peak periods such as weekdays.

Tourism NYC & Company (formerly known as the New York Convention & Visitors Bureau) — the City's official tourism marketing organization - reported 42.6 million visitors to New York City in 2005: Visitor spending was estimated at $22.8 billion. These visitors have the potential to have a significant impact on area golf operations.

Climate The New York City area climate is generally temperate. The moderating influence of the Atlantic Ocean reduces the severity of winters and snow accumulation to 25 to 35 inches annually. It is not unusual for entire winters to pass with less than ten inches of snow. Daytime highs at the height of winter in January are typically in the 30s. Still, though this is a year-round golf market, activity levels are highly seasonal, with play falling off dramatically from November through March.

Cost of Living/Socio-Economic Trends Most market golf operators that we spoke to report a drop-off in rounds played since the late 1990s, some with a decrease of 25% or more. Tee sheets remain full during peak demand periods (e.g., summer weekend mornings), but operators are struggling to fill tee sheets during off peak periods. This dynamic is consistent with a nationwide trend caused by several factors, including an increasing supply of public golf courses fighting for shares of stagnant markets, an uneven economy, the aftereffects of the September 11 tragedies, and increasing constraints regarding discretionary time and money for many people, especially working families.

One of the economic trends that seems to have affected play at higher price points in just the last few years has been the rapid increase in the cost of living, especially as it relates to housing, homeowners insurance, property taxes, medical care, and fuel. There simply is not as much discretionary income for many households. In New York City, this problem is exacerbated, as the cost of living was already very high compared to nearly every market in the country. This is a potential concern for Ferry Point Golf Club, especially since the proposed green fees are unprecedented at municipal golf courses in this market.


Golf Market Overview

In this section of our report NGF Consulting has attempted to estimate the size and scope of the local Bronx County and New York City area golf market. Having identified key demographic and economic factors that may affect the performance of area golf facilities, we now turn our attention to the current golf demand climate in this market and the actual performance of the area’s golf facilities. NGF Consulting uses predictive models as benchmarks for estimating potential market strength. These benchmarks are then compared to the actual performance of golf courses in and around the New York City area in an effort to establish reasonable parameters, within which the proposed new Ferry Point Golf Club will be expected to operate.

NATIONAL TRENDS

Golf participation in the U.S. has grown from 3.5% of the population in the early 1960s to about 12.6% of the population today. NGF estimates that 36 million golfers reside in the U.S., with growth slowed to about 1.0% per year. Other surveys completed outside the golf industry show the number of people who “identify themselves as golfers” is as high as 45 million, indicating a large potential “latent” demand from very inactive golfers.

As rapidly as the demand for golf has grown, the supply has grown even faster, with an average increase of about 2.1% per year. With the increase in supply, we are seeing a marked increase in competition, and the supply is greater than the demand in some markets.

In addition to increased competition, four other factors have contributed to a decline in the number of rounds per course during the 2002 to 2005 period. These include: 1) a worsening economy; 2) the aftereffects of 9-11, which greatly reduced the traveling golfer market; 3) the increasing time pressure on individuals and families; and 4) abnormally poor weather conditions over the past few years in much of the U.S., including the northeast. The combination of these factors has caused many golf facilities to become distressed, particularly those that have a high debt load because of higher construction costs and the perceived need to build high-end courses.

The number of golf course closings has doubled from an annual average of 24 courses per year in 1993 – 2001 to 48 courses in both 2002 and 2003 and 63 courses in 2004. Closures have outpaced openings in the first six months of 2006, with a net decrease of 7.5 18-hole equivalent courses. NGF expects 130 to 140 eighteen-hole equivalents to open in 2006. And, although it’s difficult to predict, it’s possible that we will see upwards of 130 closures, or double the number year-to-date.

In terms of the total number of rounds produced, NGF estimates that rounds fell about 1.5% in 2003, after a 3% drop in 2002. End-year NGF research indicates a rebound of about 0.7 percent in 2004, and a very slight decline of 0.1% in 2005. The Northeast Region, which includes New York, saw rounds decrease by about 0.1 percent in 2005, after a 4.9 percent increase from 2003 to 2004.

On the positive side, the growth in golf course development has slowed considerably nationally and in the majority of local markets, a trend that should help ease some of the competitive pressure. Another positive trend is the aging of America. Baby boomers are rapidly approaching


retirement age when golf activity flourishes. The baby boomers represent not only the largest single demographic in the US, but they also approach retirement age with more disposable income than any previous generation.

PREDICTED GOLF DEMAND IN NEW YORK CITY/NEW YORK CIT Y MARKET

The objective of this section is to provide an overview of golf demand potential in the subject market. The predictive demand models are based on historical golfer participation characteristics, and incorporate existing and emerging demographic trends in the subject market area.

In January of each year, Market Facts mails golf participation surveys to 50,000 households nationwide to determine the previous years' golf participation characteristics. In order to be representative of the U.S. population, the observations are weighted to match total U.S. demographics. The NGF Golf Demand Model includes the critical combination of age and income, regional seasonality, and available golf course supply, as well as existing and emerging demographic trends in a particular market area. The model can be used as a benchmark for estimating potential market strength in a particular area. Because the sample is so large, NGF is extremely confident of its accuracy. In statistical terms, the national participation rate is estimated to be 12.6 percent, plus or minus 0.2 percent at the 90 percent confidence level.

Estimated New York City Area Golf Demand 2005-2010

The table below illustrates how the New York City, NY DMA ranks in relation to the other 209 DMAs nationwide on some key golf demand and supply measures. As we can see, New York represents the largest golf market in the United States in terms of number of golfers and potential rounds demanded, despite a relatively low overall golf participation rate. The New York DMA also has the most golf courses of any market in the country.

Characteristic Rank (of 210

DMAs) Predicted Household Participation Rate 141

Predicted Golfing Households 1

Predicted Golf Rounds Demanded 1

Total Number of Facilities 1 Public Facilities 3 Private Facilities 1 Resort Facilities 1 Premium Facilities 3 Standard Facilities T26 Value Facilities 1 T indicates tied with at least one other DMA for this rank


DMA Golf Demand Rankings

Predicted Household Participation Rate 15% Rank (of 210 DMAs) 141Predicted Number of Golfing Households 1,151,026 Rank (of 210 DMAs) 1Predicted Number of Rounds Demanded - 2005 19,825,125 Rank (of 210 DMAs) 1

NGF Golf Demand Indices

The Golfing Household Index is based on Predicted Number of Golfing Households, and compares golfing household participation in a particular geography to the national base index of 100. The Rounds Index is based on Predicted Number of Rounds, and compares the propensity of rounds played per household in a particular geography to the national average rounds index of 100.

The predictive indices for golfing households and rounds demanded were developed in order to determine the relative strength of a particular golf market area in comparison to other golf markets and the nation as a whole. These predictive demand indices help identify where golfing households and rounds activity are concentrated by comparing various geographies with one another and the national average, which is 100. For example, if a market has a Golfing Household Index of 120, that area is estimated to have 20 percent higher golf participation rate as compared to the U.S. average. And, if a market has a Rounds Index of 120, that area is estimated to have 20 percent higher average rounds per household as compared to the U.S. average.

Although both the golfing household index and the rounds index help to predict golf demand in a particular market, each index is derived independently and does not necessarily relate to the other. It is possible for an area with a low golfing household demand index to have a high rounds demand index and vice versa. In other words, some markets may have fewer golfing households, but those households play more rounds of golf; other markets may contain a large number of golfing households but the households play less frequently. A market area with a higher than average golfing household index in conjunction with a higher than average rounds index would be considered a prime area in terms of overall predicted golf demand.

Predicted Golf Demand

SITE Bronx

County

10 Miles Ferry Point

Park

New York City (5

Boroughs) New York City DMA New York Entire US

Golf Demand Indicators # of Golfing Households 31,637 235,124 300,043 1,151,026 1,111,553 20,392,712 Number of Rounds Played 338,228 2,308,510 2,509,990 19,825,136 20,217,860 495,441,760 Golfing Household Index 36 57 54 84 84 100 Rounds Played Index 16 23 18 59 63 100

Source: National Golf Foundation – 2006.


Predictive Demand Model Key Findings • While the New York City DMA is the largest golf market in the United States in terms

of total demand, actual golf participation rates and rounds demanded per household are very low relative to national benchmarks. This is due largely to a demographic profile that is not conducive to high golf demand. However, due to the sheer size of the population, estimated rounds demanded in the market is a very large number. Additionally, as we will see, the corresponding supply to service this demand, relative to national benchmarks, is extremely low – a positive for potential new market entrants.

• NGF Consulting has estimated approximately 235,000+ permanent resident golfing households within 10 miles of Ferry Point Park, capable of demanding 2.3 million rounds of golf annually. Locally, we estimate 31,000+ golfing households demanding about 338,000 rounds annually in Bronx County.

Corporate Market Demand

As we noted in the Market Area Overview section of this report, the New York City area is home to a very large number of major corporate and public employers. Although potential corporate demand for public golf rounds and/or memberships is difficult to quantify, it is clear that the operators of the Ferry Point Park Golf Course should target this market by emphasizing the ease of access from Manhattan. This corporate/organizational tournament play can augment the daily fee rounds expected from the primary and secondary resident markets, especially during off peak periods. Some corporations may also want to pre-pay for certain blocks of times, in order to offer perks to employees or to entertain clients.

Visitor Golf Demand

As noted previously, about 42 million people visited New York City in 2005. These visitors have the potential to have a significant impact on demand at area golf courses. NGF research shows that roughly one-third of all golfers participate in the activity while traveling, playing .557 rounds per day of travel. To illustrate the potential demand from visitors, we have used a very conservative estimate of 10,000,000 visitors (rather than the reported 42 million) annually to craft the estimate for tourist demand below.

Area Visitors 2005

Estimated Visitors to New York City 10,000,000

X Estimated National Golf Participation Rate 12.6%

= Estimated Visiting Golfers to NYC 1,260,000

Estimated Golf Frequency Rate (Traveling Golfers) .557 Rounds/trip

Estimated Potential Visitor Rounds Demanded 701,820

As we can see, even using very conservative estimates for annual visitors, the potential demand for golf from New York City area tourists is more than 700,000 rounds annually. These visiting golfers could be especially important for a high-end golf course such as is proposed at Ferry


Point, as traveling golfers often exhibit high incomes and are typically much less price sensitive than resident golfers.

SUPPLY INDICATORS

The tables below summarize the basic parameters of golf course supply in the subject markets. Household/Supply Ratios, which are derived by dividing the total number of households by the number of 18-hole equivalent courses in a market, are used by NGF Consulting as a benchmark to establish the support (households) that is available for existing golf courses. The Household/Supply Ratio is derived by dividing the total number of households by the number of 18-hole equivalent golf courses. Household/Supply indices are derived from these ratios, and then compared with the base national figure of 100.

Golf Course Supply

SITE Bronx County

10 Miles Ferry Point Park

New York City (5

Boroughs)

New York City DMA New York Entire US

Golf Supply Summary Total Golf Facilities 3 24 15 536 823 16,057 Public Golf Facilities 3 12 13 259 587 11,702 Private Golf Facilities 0 12 2 277 236 4,355 Total Golf Holes 63 441 279 9,459 13,788 270,207 Public Golf Holes 63 225 243 4,536 9,684 191,979 Private Golf Holes 0 216 36 4,923 4,104 78,228 Household/Golf Supply Ratios Households per 18 Holes: Total 136,510 91,096 195,147 14,408 9,272 7,343 Households per 18 Holes: Public 136,510 178,548 224,058 30,046 13,201 10,335 Households per 18 Holes: Private NA 185,988 1,512,392 27,684 31,149 25,363 Households Supply Index: Total 1,859 1,241 2,658 196 126 100 Households Supply Index: Public 1,321 1,728 2,168 291 128 100 Households Supply Index: Private 0 733 5,963 109 123 100

HH Supply Index: Premium 0 1,801 0 136 195 100

HH Supply Index: Standard 519 808 821 181 139 100

HH Supply Index: Value 0 5,811 10,501 813 113 100

Source: National Golf Foundation - 2006.


New York City Regulation Length Golf Course Supply

The following table lists all regulation length, 18-hole or greater golf facilities. Aside from the two private clubs, all 18-hole public golf courses in the City are the municipal facilities.

Regulation Length Golf Facilities in the Five Borou ghs

Facility Borough Type Year Open

Price Point

Number of Tee

Stations Yardage Par Slope Rating Clearview Park Golf Course Queens 18H-MU 1925 B 0 6,473 70 121 70.5

Douglaston Park Golf Course Queens 18H-MU 1926 B 0 5,585 67 104 65.2

Dyker Beach Golf Course Brooklyn 18H-MU 1920 B 0 6,504 71 121 70.8

Forest Park Golf Course Queens 18H-MU 1896 B 0 6,053 70 120 69.3

La Tourette Golf Course Staten Island 18H-MU 1928 B 60 6,692 72 121 71.3

Marine Park Golf Course Brooklyn 18H-MU 1962 B 0 6,866 72 119 72.2

Pelham/Split Rock (Pelham Bay) Bronx 18H-MU 1898 B 0 6,480 71 117 70.3

Pelham/Split Rock (Split Rock) Bronx 18H-MU 1898 B 0 6,714 71 129 72.0

Richmond County Country Club Staten Island 18H-PR 1888 N/A 15 6,636 71 128 72.1

Silver Lake Golf Course Staten Island 18H-MU 1929 B 0 6,138 69 119 68.8

South Shore Golf Club Staten Island 18H-MU 1933 B 10 6,366 72 117 69.9

Towers Country Club Queens 18H-PR 1925 N/A 0 5,650 70 111 67.5

Van Cortlandt Park Golf Course Bronx 18H-MU 1895 B 0 5,918 70 122 68.3

MU – Municipal PR - Private


Significant Findings – Golf Course Supply

Below are NGF Consulting’s findings regarding overall golf course supply in the subject markets:

• There are three golf facilities located in the Bronx – the City’s 36-hole Pelham/Split Rock, 18-hole Van Cortlandt Park, and 9-hole Mosholu Golf Course. New York’s five boroughs have 15 total golf facilities (13 public); all of the regulation length public golf courses within the five boroughs are owned by the City. The New York DMA is home to 536 golf facilities, nearly evenly split between public and private. As noted earlier, the New York DMA ranks first in the nation for number of golf courses.

• Other than the other NYC municipal golf courses, the closest potential competitors to Ferry Point Golf Club include several municipal golf courses located in Westchester County: Dunwoodie, Sprain Lake, Lake Isle Town Park, Saxon Woods, and Maple Moor. Of these, Sprain Lake is probably the closest to Ferry Point in terms of price point, with peak season green fees, cart inclusive, of about $85.

• The population base of New York City supports 279 total holes of golf, resulting in a household supply ratio that is 2700% higher than we see in the nation as a whole. In other words there are nearly 30 times as many households available to support each 18 holes of golf than there are in the overall U.S. While this statistic on its own would seem to indicate that there is considerable room for additional golf course inventory, it must be evaluated in context with other variables, such as the likely net out-migration of rounds played to the suburbs and the demographic/socio-economic structure of many of the City’s neighborhoods.

• In the overall DMA, there are about two times more households to support each golf facility, indicating a large concentration of golf facilities just outside the City in New Jersey, Connecticut, lower New York State, and Long Island. Still, the ratio is very favorable for golf operators, compared to national benchmarks.

• NGF Consulting notes that there are no golf courses at a premium price point within the City’s five boroughs (please see Appendix D for explanation of NGF Price Point Index), indicating a possible niche for the Ferry Point Golf Club, as proposed.

• The overall DMA does have some premium municipal golf courses, though, with the exception of Lake Isle, they are all a significant drive time from Ferry Point Park. They include: Passaic County Golf Course and Paramus Golf Club in northern New Jersey; Spook Rock Golf Course in Rockland County, NY; Harbor Links Golf Course in North Hempstead, Long Island; and Sterling Farms Golf Course in Fairfield, CT. Of these, Harbor Links is the closest to Ferry Point in terms of fees, with peak season weekend non-resident rates of $106 (cart is mandatory and included on weekends); the corresponding resident green fee is $71.

• ‘Premium’ priced 18-hole+ daily fee golf courses in the DMA include: Colonial Springs Golf Course in Nassau County; Meadows Golf Club, High Mountain Golf Course, Emerson Golf Club, and Bergen Hills Country Club in northern New Jersey; and, New York Country Club in Rockland County.


• Other than Ferry Point Golf Club, the NGF facility database indicates only one new golf course project with the potential to have impact on the New York City public golf market – the 54-hole Meadowlands project in northern New Jersey. At this time it is uncertain if all 54 holes will be built and, if so, how many will be public access. Price points are also uncertain at this time. This project should only have an affect on New Jersey residents who might otherwise consider playing Ferry Point Park.

NEW YORK CITY MUNICIPAL GOLF OPERATIONS

The New York City municipal golf system comprises twelve facilities – all 18-hole regulation courses with the exception of 36-hole Pelham/Split Rock, 18-hole executive length Kissena Park, and 9-hole regulation course Mosholu Golf Course in the Bronx. All of the City’s golf facilities are privatized, with concessionaires paying license fees to the City based on gross receipts. American Golf Corporation manages eight of these facilities, including Pelham/Split Rock and Van Cortlandt Park in the Bronx. The tables on the following pages provide some general operating information regarding these golf facilities.


Fees

The table below reflects the uniform fee structure for the City’s 18-hole golf courses. Increases by the operator are restricted to cost-of-living adjustments each year. Residents receive a $7 discount for 18-hole prime time rounds, with larger discounts for off peak periods.

Fees

Green Fees

Weekend and Holidays

Early morning (9 holes) $17.00

18 holes (before 12:00 p.m.) $38.00

18 holes (at or after 12:00 p.m.) $38.00

Twilight $17.00

Weekdays

Early morning (9 holes) $16.00

18 holes (before 12:00 p.m.) $31.00

18 holes (at or after 12:00 p.m.) $27.00

Twilight $16.00

Seniors (Permits on weekdays only)** $15.50

Juniors (Permits on weekdays only) $7.50

Miscellaneous

Full Power Cart (2 riders) $32.00

Half Power Cart (1 rider) $16.00

Power Cart (Twilight) $21.50

Pull (Hand) Cart $4.75

Season Locker $45.00

Parking $2.00

Reservation Fee $3.00

* Rates are for NYC residents with valid NYC Reside nt Golfer's Permits. Permits cost $6.00 for adults and $2.00 for juniors and seniors. A photo ID and proof of residency (utility bill, etc.) are required. Seniors and juniors who provide their own photographs along with the required ID’s will be issued a permit free of charge. Non-resident fees of $8.00 per 18-holes & $6.00 on twilight apply for all others. ** Senior Restrictions A senior may reserve at Clearview and Dyker on Monday, Thursday and Friday before 8 a.m. and after 11 a.m. in order to receive the senior rate. On Tuesday and Wednesday a senior may reserve all day to receive the senior rate. Pelham, Split Rock, Van Cortlandt, Silver Lake, South Shore and La Tourette have no senior restrictions.


Activity Levels and Trends

Below are operating results for the City’s municipal golf system for the years 2004 and 2005, including license fees paid to the City by the concessionaires.

NYC Golf Courses-Gross Receipts, Fees Paid & Number Of Rounds Played

GROSS RECEIPTS LICENSE FEES PAID ROUNDS PLAYED REV/ROUND

GOLF COURSE 2004 2005 %

CHANGE 2004 2005 %

CHANGE 2004 2005 %

CHANGE 2004 2005 %

CHANGE

Clearview $2,509,240 $2,631,895 4.89% $830,173 $868,712 4.64% 75,976 77,680 2.24% $33.03 $33.88 2.59%

Dyker Beach $2,261,221 $2,269,681 0.37% $465,248 $459,200 -1.30% 66,685 59,663 -10.53% $33.91 $38.04 12.19%

La Tourette $2,437,623 $2,450,710 0.54% $573,963 $568,265 -0.99% 53,845 51,306 -4.72% $45.27 $47.77 5.51%

Pelham / Split Rock $3,138,347 $3,391,254 8.06% $952,147 $1,005,777 5.63% 77,784 83,675 7.57% $40.35 $40.53 0.45%

South Shore $1,487,394 $1,586,723 6.68% $555,000 $573,821 3.39% 44,469 48,055 8.06% $33.45 $33.02 -1.28%

Silver Lake $1,575,332 $1,429,139 -9.28% $335,145 $300,361 -10.38% 42,965 38,929 -9.39% $36.67 $36.71 0.13%

Van Cortlandt $2,268,885 $2,383,570 5.05% $411,265 $429,644 4.47% 51,332 49,061 -4.42% $44.20 $48.58 9.92%

Mosholu $731,532 $149,216 -79.60% $187,994 $159,454 -15.18% 21,079 8,315 -60.55% $34.70 $17.95 -48.29%

Forest Park $2,082,137 $2,060,647 -1.03% $488,984 $473,041 -3.26% 59,400 54,808 -7.73% $35.05 $37.60 7.26%

Kissena $1,118,800 $1,159,059 3.60% $472,150 $469,495 -0.56% 38,059 36,867 -3.13% $29.40 $31.44 6.95%

Douglaston $1,938,731 $2,552,239 31.64% $569,288 $660,198 15.97% 61,785 67,767 9.68% $31.38 $37.66 20.02%

Marine Park $1,458,575 $1,254,180 -14.01% $303,952 $263,360 -13.35% 40,898 36,332 -11.16% $35.66 $34.52 -3.21%

TOTAL $23,007,818 $23,318,313 1.35% $6,145,310 $6,231,327 1.40% 634,277 612,458 -3.44% $36.09 $36.48

Though not illustrated above, rounds played system-wide peaked at about 917,000 in 1998, with Pelham/Split Rock accounting for 122,000 by itself – an incredible number, even for 36 holes, in this climate. Beginning in 1999, rounds played began a precipitous decline, bottoming out at about 597,000 in 2003 – a decrease of 35% over that time period. Activity has rebounded somewhat the last two years. Gross receipts and license fees to the City were up marginally in 2005, despite a moderate decrease in rounds between 2004 and 2005. Overall, license fees, as a percentage of gross revenue, averaged about 26.7% in 2004 and 2005.


NATIONAL PREMIER MUNICIPAL GOLF COURSE ANALYSIS

Because Ferry Point Golf Club may very well be positioned at price points that are unprecedented for municipal golf courses in the New York City market, NGF Consulting felt it would be very instructive to analyze comparative operating data from a sampling of the nation’s top municipal facilities. The golf courses listed in the table below comprise a representative subset of facilities that are considered to be among the best municipal courses in the nation. Criteria used to pick them include quality of golf course, national reputation, current or previous affiliation with professional tournaments, and fee levels. The chart on the following page illustrates basic operating data for these facilities.

National Premium Municipal Comparables

Facility Name Location # Holes Par

Bethpage State Park (Black) Farmingdale, NY 18 71

Black Gold Golf Course Yorba Linda, CA 18 72

Brown Deer Park Golf Course Milwaukee, WI 18 71

Crandon Golf Course Key Biscayne, FL 18 72

Desert Willow Golf Resort Palm Desert, CA 36 72

Golf Resort at Indian Wells Indian Wells, CA 36 72

Harding Park Golf Course San Francisco, CA 18R/9E 72

Incline Village Golf Courses Incline Village, NV 18R/18E 72

Miami Beach Golf Club Miami Beach, FL 18 72

SilverRock Resort La Quinta, CA 18 72

Torrey Pines Golf Course La Jolla, CA 36 72

R – Regulation E – Executive


Comparative Operating Data

National Premium Municipal Comparables

Peak Season Res. Rates Peak Season Non-Res. Rates Res as % of Non-Res

WD/WE 18 WD/WE Twi WD/WE 18 WD/WE Twi

18-Hole Cart Fee

WD/WE 18

WD/WE Twi

Senior WD/WE 18

Senior % (of

regular N/R rate)

Res ID

Card Cost

Reserv. Policy

(Res/NR days)

Advance Res Fee1

Rounds Played 2005

% Resident

Play

# of Ann. Events/Ave. Field Size

Bethpage Black $39/$492 $21/$262 $78/$982 $42/$522 $163 50%/50% 50%/50% $24/DNA 31%/DNA DNA 7/2 DNA 33,0004 82% DNA

Black Gold Golf Course

$65/$75/$855 $40/$52/$72 $84/$94/$104 $52/$62/$72 Included 77%/82% 77%/100% $406/DNA 48%/DNA DNA 8/7 $5 75,000 40% 12/20

Brown Deer Park GC

$35/$39 DNA $77.5/$84 DNA $13.75 45%/46% DNA $22.50/$39 29%/46% $17 5/5 DNA 30,000 N/A 25/90

Crandon Golf Course

$73.5/$73.5 $36/$36 $138.5/$138.5 $36/$36 Included 53%/53% 100%/100% DNA DNA DNA 5/5 $10 55,036 51% 12/100+

Desert Willow Golf Resort

$45/$45 $45/$45 $165/$165 $65/$65 Included 27%/27% 69%/69% DNA DNA $8 3/60 DNA 89,700 28% 48/80

Golf Resort at Indian Wells

$35/$35 $35/$35 $125/$135 $40/$40 Included 28%/26% 88%/88% DNA DNA $5 14/3 DNA 90,000 8% DNA

Harding Park Golf Course

$35/$487 $25/$347 $125/$138 $80/$92 $133 28%/35% 31%/37% $21/$48 17%/35% $40 7/6 $10 70,000 65%8 N/A

Incline Village Golf Courses

$46/$46 $35/$35 $155/$155 $100/$100 Included 30%/30% 35%/35% DNA DNA $0 7/14 $15 46,2009 67% N/A

Miami Beach Golf Club

$85/$8510 DNA $185/$185 DNA Included 46%/46% DNA DNA DNA DNA 5/5 DNA 44,000 42% DNA


SilverRock Resort $55/$55 $55/$55 $145/$160 $85/$95 Included 38%/34% 65%/58% DNA DNA $15 3/90 DNA 30,000 30% DNA

Torrey Pines (North)

$29/$34 $17/$19 $75/$85 $40/$45 $163 39%/40% 43%/42% $15/DNA 20% $12 7 days DNA 91,394

67%* 60/90

Torrey Pines (South)

$40/$45 $25/$30 $115/$135 $60/$70 $163 35%/33% 33%/43% $25/DNA 22% $12 7 days DNA 64,589 67%* 60/90

Averages (per 18 holes)

$49/$53 $33/$39 $122/$132 $60/$67 $15 41%/42% 59%/62% $25/$44 28%/41% $14 $10 49,20811 50% 36/78+

* NGF Consulting Estimate Note: Where three fees listed, represents Mon-Thu/Fri/Weekend DNA - Does not apply N/A - Information not available 1 Per player 2 Does not include $4 reservation fee 3 Represents per person shared cart fee, though single riders pay double this amount for entire cart 4 Activity for all five Bethpage courses totaled is 263,000 rounds 5 Lower fees sometimes available with 3-day advance 6 Non-resident senior is $49 7 City/County of Sand Francisco rates; there are also resident discounts for 9-county Bay Area residents 8 Percentage mandated by City Council 9 Includes 19,200 rounds at executive 'Mountain' course 10 City of Miami Beach rates; smaller discounts also available for South Florida residents 11 Rounds played for SilverRock not included in calculation of average as it was open only for a partial year in 2005


Significant Findings – National Premier Municipal G olf Courses

Below are NGF Consulting’s relevant observations regarding the national premier municipal golf courses profiled above. Several of the operating characteristics are directly relatable to the proposed operating structure at Ferry Point Golf Club.

• Average peak season resident green fees at the national courses we profiled were $49 weekdays and $53 weekends, cart included. Average peak season non-resident rates were $122 and $132, respectively. Cart fees are included in green fees at the majority of the profiled courses.

• This fee disparity between residents and non-residents is reflective of the typical operating model at very high-end municipal courses: non-residents pay much higher fees so that residents can still enjoy affordable golf at a premium facility. It is sometimes the case that residents are playing at fees that do not cover the cost to the operator to produce the round.

• Among our sampling of high-end national municipal golf courses, residents paid an average of only 41% to 42% of the corresponding fees for non-residents. Black Gold Golf Course in Yorba Linda, California offered the smallest discount to residents, at about 20% on average. Peak season resident rates at Long Island’s Bethpage Black were 50% of non-resident green fees.

• Average rounds played among the subject premium municipal courses were about 49,000 per 18 holes – numbers that are more typical of premium daily fee courses. However, the number is skewed upward because many of these courses are located in the Sunbelt. Rounds played at Bethpage ‘Black’ were only 33,000 in 2005, as play is capped on this very difficult course.

• Resident play accounted for an average of about 50% of total play at the national comparables. At both Torrey Pines and Harding Park, it is mandated by City Council that residents must account for 65% of total rounds played.

• Several of these national premier muni courses have hosted professional events. Most prominent among these is Bethpage ‘Black’, which in 2002 became the first municipal golf course to host the U.S. Open. Brown Deer Park annually hosts the U.S. Bank Championship (formerly Greater Milwaukee Open), and SilverRock Resort will soon become home to the Bob Hope Chrysler Classic. Harding Park hosted an American Express Championship in 2005, and Torrey Pines will host the U.S. Open in 2008. Crandon Park has been a long-time host to a Senior PGA Tour event.

• Most facilities allowed residents between 3 and 8 days advance to make tee times. Three destination market facilities that give residents deep discounts off of regular rack rates – Desert Willow, Incline Village, and SilverRock – give non-residents preferential access to tee times.


Market Opportunity Conclusions

From the market analysis delineated in previous sections, it is possible to highlight any market opportunity that may exist for the proposed Ferry Point Golf Club. These conclusions were based on the expected quality and market positioning of the proposed golf club, NGF Consulting’s analysis of the local golf supply and demand dynamic for public golf, and local and regional demographic and economic factors.

Our analysis has revealed a number of positive and negative factors that have the potential to have the most bearing on the potential viability/success of Ferry Point Golf Club. These factors are covered in detail in the body of this report, and summarized below.

POSITIVE FACTORS

• The product concept reveals a very high quality golf course that will feature beautiful views of the Long Island Sound, Whitestone and Throgs Neck Bridges, and New York City skyline. Even if the lower fee option is chosen, Ferry Point Golf Club will be the premier golf facility in New York City.

• The new course will have a huge population base from which to draw. With more than 1.37 million residents, Bronx County offers a large permanent population in immediate proximity to the Ferry Point Park site. There are about 6 million people living within 10 miles of the site, and approximately 8.15 million living within the five boroughs of New York City. Finally, there are nearly 21 million people living in the greater New York City metro area (DMA, or Designated Market Area).

• The population base of New York City is so large that there are nearly 30 times as many households available to support each 18 holes of golf in the five boroughs than there are in the overall U.S.

• There are no premium public golf courses located in New York City, indicating a possible niche for the Ferry Point Golf Club, as proposed. The overall DMA does have some premium public access golf courses, including several municipal facilities. However, with the exception of Lake Isle in Eastchester, they are all a significant drive time from Ferry Point Park and from many areas of New York City.

• Ferry Point Park benefits from excellent accessibility due to the strong transportation infrastructure. Under good traffic conditions, the Ferry Point site is very accessible via automobile to much of the New York metro area. The park sits at the northern base of the Whitestone Bridge, and is accessible directly via the service road the Hutchinson River Parkway. It is also proximate to the Throgs Neck Bridge (I-295) which, like the Whitestone, connects the Bronx to Queens, Brooklyn and Long Island. Several other highways, tunnels, and bridges connect the west Bronx with Manhattan. Within one mile of the Ferry Point Park site is a major intersection of highways coming from several directions, including the Cross Bronx Expressway (I-95), the Hutchinson River Parkway (I-678), Overview Expressway, and the Bruckner Expressway (I-278).


• There is a corporate presence in greater New York City that is unmatched anywhere in the country. A full-time staff person devoted to direct selling of tournaments/outings to these groups could have a huge impact on filling tee sheets at the new club, especially during off-peak periods such as weekdays. Some corporations may also want to pre-pay for certain blocks of times, in order to offer perks to employees or to entertain clients.

• Resident and corporate play will also be supplemented with significant visitor demand. Based on visitation figures from NYC & Company and NGF research on traveling golfers (and applying a very conservative methodology), we have estimated that New York City visitors have the potential to demand more than 700,000 rounds annually. These visiting golfers could be especially important for a high-end golf course, as traveling golfers often exhibit high incomes and are typically much less price sensitive than resident golfers.

• There appears to be a notable shortage of high quality banquet facilities in the five boroughs, indicating an opportunity for the Ferry Point Golf Club to do a significant volume of this high margin business. The expected views from the banquet facility, as well as the accessibility of the site from the other boroughs, should make this a very popular venue. Another benefit of a strong banquet business is that it exposes the golf course itself to more potential customers.

• Our analysis of premier national municipal golf courses illustrates that these facilities commonly generate high activity levels, despite high price points.

NEGATIVE FACTORS

• While a new golf course would obviously benefit from New York City’s very large population (the New York DMA is the largest golf market in the United States in terms of total demand), actual golf participation rates and rounds demanded per household are very low relative to national benchmarks. This is due largely to a demographic profile that is not conducive to high golf demand.

• The proposed green fees are unprecedented for municipal golf courses in this market, especially with regard to the resident rates. Though our analysis of premier national municipal golf courses revealed that these facilities can generate high activity levels and sustain high non-resident rates, there is little precedent for resident green fees as high as proposed for Ferry Point Golf Club.

• Though we have no reason to expect anything out of the ordinary, the fact that the site for the golf club is a former landfill site may lead to potential issues, such as unexpected settling of the course, or the smell of methane gas.

• Though there is, as noted, an excellent major road infrastructure to serve the Ferry Point site, there is a lack of pubic transportation directly to Ferry Point. As noted at Van Cortlandt Park, golfers arriving via public transit (and storing clubs) can be a strong market segment in NYC. This should be much less of an issue if Ferry Point is positioned at the higher green fees, but it could act to suppress play from tourists who do not have rental cars.


• As any New Yorker knows, traffic along some of the highways noted in this report can be a nightmare at times. A few bad experiences on the way to Ferry Point could make some golfers reluctant to return there to play, at least with any frequency. (Golfers in northern New Jersey may find the prospect of the approach to the GW Bridge along Route 80, followed by a ride on the Cross Bronx Expressway, very daunting). Also, tolls on local bridges (including $4.50 each way on Whitestone, Throgs Neck) will add to the cost of a round of golf and may preclude the more price sensitive golfer from patronizing Ferry Point Golf Club.

• As noted with the existing New York City golf courses (rounds down 35% since 1998), activity levels are down locally, regionally, and nationally since the late 1990s. Though golfers camping out at 4:00 a.m. for tee times is still a common occurrence in New York, play during off peak periods has fallen considerably. Though yearly weather variations can account for some of the decline, other factors that are outside the control of golf operators have also contributed greatly to this phenomenon. These include an oversupply of public golf courses, an uneven economy, a spiraling cost of living, the aftereffects of the September 11 tragedies, and increasing constraints regarding discretionary time and money for many people, especially working families.

• These uncontrollable factors that can affect activity levels and revenues from year to year mean that money invested in a project such as Ferry Point Golf Club is money at risk. For instance, the after effects of another terrorist attack on New York City, or even elsewhere in the nation, could have a huge negative impact on play, especially if the club is positioned at green fees that are untested in the City.

• Though New York City is technically a 12-month golf market, there is extreme seasonality with regards to activity levels. In other words, the cold weather months effectively constrain maximum capacity.

MARKET OPPORTUNITY CONCLUSIONS AND PROJECTED PLAY L EVELS

NGF Consulting has weighed the factors discussed above and concluded that there is a strong market opportunity for Ferry Point Golf Club, as proposed. Our national comparable analysis illustrates activity levels that are achievable at premier municipal facilities – especially those in proximity to large population bases. Our projection for activity levels for the first five years of operation at Ferry Point Golf Club, for both the mid-tier and high-end operating structures, is summarized in the table below. In the Financial Overview section that follows, we will address the potential financial viability of each operating structure. Of course, the projected operating results must be considered in context with the construction cost estimates that are the other component of this feasibility study.

Projected Rounds for Ferry Point Golf Club

2009 2010 2011 2012 2013

Mid-Tier Price Structure 41,000 45,000 49,500 52,000 52,000

High-End Price Structure 25,000 30,000 35,000 37,500 40,000


When considering the total market share of a new facility, it is important to realize that the total rounds actually played at the new course during the first few years may be lower than the market opportunity appears to suggest. However, a new facility, even in the best of conditions, should expect only a portion of its total potential to be realized in the initial years of operation. Our estimates of performance for the proposed Ferry Point Park Golf Club could change should the following conditions occur:

Stronger Performance Weaker Performance

Future club closings New course openings

Faster population growth than projected Incorrect price levels

Positive regional/ national publicity Poor customer service

Lack of loyalty to existing courses Low quality facility

Unforeseen surge in golf interest Poor yearly weather conditions

Excellent yearly weather conditions Regional economic recession

These estimates shown for probable activity levels are presented in a conservative manner. It is important to measure a new course’s likely performance in such a way as to help the client make financial decisions based on realistic expectations. It is obviously possible that either more or fewer rounds and members will be realized. However, given the possibilities that the market has shown, we believe that our estimates are appropriate for the New York City market area.


Financial Overview

The following are the general assumptions that have been used in the development of NGF Consulting’s cash flow model for the proposed Ferry Point Golf Club in the Bronx, New York. NGF Consulting has prepared two cash flow models, based on two different operating models:

1. The development and operation of a high-quality 18-hole links-style golf facility, featuring a large clubhouse of about 24,000 square feet) with practice facility, learning center, and appropriate support amenities, and maintained and operated to the standards of the upper tier of municipal golf courses across the nation. The club would be positioned as one of the premier municipal facilities in the U.S., with non-resident green fees in excess of $100.

2. The development and operation of an 18-hole golf course of similar quality, but with clubhouse on a smaller scale (approximately 15,000 square feet) and price points closer to, but moderately higher than, the existing inventory of courses in the NYC municipal golf system.

The warranted level of investment, as presented in the cash flow model, is not intended to be an estimate of the actual cost to develop the golf course and related amenities. Rather, it is an estimate of the level of debt that these cash flows could support, based on the projected stabilized activity levels of the golf course and the financing assumptions noted in the model. (All figures are expressed in 2006 dollars).

HIGH-END OPTION

Activity Levels/Departmental Revenues

• All projections assume a golf course designed, constructed, and operated in a manner consistent with the upper tier of municipal golf courses nationally. This includes a golf course design consistent with the considerations noted earlier in this report. The Ferry Point Golf Club will have attractive and challenging features and a very high standard of maintenance.

• This golf facility is expected to generate approximately 40,000 annual rounds of golf at stabilization, which is projected to occur by the fourth or fifth year of operation. These projections are predicated on a year-round golf season.

• It is estimated that cart utilization will be 75 percent of all golf rounds.

• Activity levels have been estimated based on current market characteristics and NGF Consulting market projections. It is expected that the new Ferry Point Golf Club would ultimately have play divided into weekday/weekend, resident/non-resident, prime/off-prime, and discount (i.e., junior, senior, promotional, twilight, etc.) categories. We also expect play to be generated from other special events such as organized outings and tournaments.


• It is not anticipated that unlimited play seasonal or annual memberships will be offered. These pre-paid green fee arrangements tend to lower average green fee revenue per round and can have a negative effect on profitability.

• Average departmental revenues per round are estimated as follows, all growing at 2% annually for the first five years, and at 3% annually thereafter:

� Golf shop merchandise - $7.00

� Driving range - $3.50

� Food & Beverage (non-banquet) - $7.00

� Other (rentals, etc.) - $3.00

• In addition to driving range activity associated with pre-round warm up, NGF Consulting expects that there will be considerable driving range-only patronage of the facility, based on the relatively few choices for golfers simply wanting to hit balls in this highly populated market. We have therefore included a separate revenue line item for this traffic (please see Appendix A for range pro forma).

• The pro forma also includes separate revenue center line items for the banquet facility and the golf learning center. Banquet revenues were based largely on local comparable information supplied to NGF Consulting by the City of New York.

Proposed Fee Schedule

• The fee schedule assumed by NGF Consulting for the first five years of operation reflect the variations between round types expected at this facility, including resident/non-resident, prime/off-prime and some types of discount rounds. Fee levels presented are intended to represent an average of fees for each type (for example, the ‘prime non-resident’ is an average of weekday and weekend rounds).

• Green and cart fees used to develop the cash flow estimates were established based on input from New York City, as well as on comparisons to the representative sample of high-end municipal golf courses profiled in this report. The rate structure utilized in the financial projections is quoted in 2006 dollars, and may require some modification based upon market conditions in the area and other factors at the point the proposed course is ready to open.

• Eighteen-hole prime time resident and non-resident green fees are projected at $90 and $125, respectively in years one and two, increasing to $95/$130 for years three and four, and to $100/$135 for year five.

• Eighteen-hole golf carts are projected at $20.00 per player for the first two years, increasing to $22 for years three and four, and to $24 for year five.

• Tournament/outing rates are assumed to be priced at the corresponding green fee for the time of day/day of the week that the event is held. Any premiums for food & beverage, etc. are assumed to be included in the corresponding revenue center.


• NGF Consulting has crafted its estimates for income in this cash flow model under the assumption that a permanent golf clubhouse will be operated at the Ferry Point Golf Club from inception. This building will include a full-service golf pro shop, bar/grille, full-service kitchen, and banquet facilities capable of seating about 350 to 400 patrons for large events. There are also expected to be several smaller break-out rooms to accommodate corporate luncheons, etc. On-course beverage service is also assumed.

Cash Flow Statement

NGF Consulting has utilized the previously mentioned assumptions to create the cash flow statements in the following exhibits. Each category of revenue has been listed separately, and all figures have been rounded to the nearest $100 for simplicity.

Fixed Expenses NGF Consulting has assumed that a golf facility can be physically constructed on the site and that such facility would have excellent drainage characteristics. For this preliminary financial analysis, NGF Consulting has also made some basic assumptions for operational and maintenance expenses based on NGF Consulting experience, regional averages, and actual expense histories from other high-end municipal golf courses nationally. Golf course maintenance expenses have been estimated to be $1.1 million, payroll inclusive, in the first year of operation, growing at 2.5% per year to $1.2 million by the fifth year of operation. For years 6 through 35, maintenance expenses are assumed to grow at 3% per year.

General and administrative expenses have been estimated to be about $550,000, payroll inclusive, in the first year of operation, growing at 2.5% percent per year to about $607,000 by the fifth year of operation. The general and administrative expenses have been estimated based on the operation of a high-quality golf course, and are assumed to be the same whether the owner opts for self-operation or retention of a management company. A significant advertising budget has been assumed for the Ferry Point Golf Club based on the need to build awareness and market share. For years 6 through 35, G&A expenses are assumed to grow at 3% per year.

Departmental / Variable Expenses • Under the development scenario where the licensee builds the golf course, license

fees paid to the City of New York have been estimated based on schedule proposed to the City by Ferry Point Partners (please see Appendix E for schedule). Under the proposed schedule, in any given year the licensee will pay the City the higher of the “Guaranteed Minimum Annual Fee” or the payout resulting from applying the “Percentage of Gross Receipts” formula.

• Under the development scenario where the City builds the golf course, license fees paid to the City of New York have been estimated to be 26.7% of total gross revenues, which is equivalent to the system-wide actual payout percentage in 2004 and 2005, as reported to NGF Consulting.

• Expenses associated with operating a fleet of 80 golf carts have been estimated to be $1,500 per cart. This estimate was intended to apply regardless of whether carts are purchased or leased by the golf course.


• Direct expenses associated with operating the pro shop have been estimated to be 75% of total pro shop revenue. The estimate assumes self-operation and excludes payroll expenses (included previously). The largest expense item would be cost of goods sold.

• Direct expenses associated with the food & beverage operation have been estimated to be 60% of total revenue, including banquet. The estimate assumes self-operation and excludes payroll expenses related to the bar & grill, but includes labor expenses related to banquets. The largest expense item would be cost of goods sold.

• Expenses to operate the practice facility are included in the overall maintenance budget.

• Maintenance and repair expenses in addition to the aforementioned normal maintenance may be necessary during the course of operating a top-quality golf facility. Based on current City policy, NGF Consulting has included a schedule for capital improvements for Ferry Point Golf Club equivalent to 2% of total gross revenues, beginning in year 3 of operation. This money can be spent each year, or saved as a reserve for major repairs in the future.

• In keeping with the conservative posture taken for this feasibility study, NGF Consulting has assumed a contingency expense to account for any possible unforeseen expenses. This contingency has been estimated to be 5% percent of total operating expenses, excluding cost of goods sold and capital improvements.

• Fixed expenses associated with operating the golf clubhouse have been estimated to be $250,000, growing at 2.5% per year for years two through five, and at 3% annually thereafter. The estimate assumes self-operation and excludes payroll expenses (included previously). The largest expense item would be building maintenance and upkeep.

NGF Consulting has utilized the previous assumptions to create the cash flow models that follow:

Results

The results of NGF Consulting’s preliminary cash flow projection show that the Ferry Point Golf Club, positioned as a premium municipal golf course, can expect to generate approximately $5.875 million in total operating revenues in the first full year of operation, growing to approximately $11.01 million by the fifth year of operation. Considering all preliminary expense estimates prepared by NGF Consulting for this study, earnings before interest, taxes, depreciation, and amortization will be about $768,000 in the first year of operation, while total annual operations profit available for capital investment reduction will be about $3.69 million by the fifth year of operation. These results assume that the licensee builds the golf course, thus reducing the projected license fees to the City.

Based on NGF Consulting’s analysis of the local golf market and the resulting net cash flow projections, we estimate the warranted level of investment (estimated supportable debt) for this project to be roughly $40.4 million. Supportable debt level is based upon fifth year net operating income with a debt coverage ratio of 1.25, over a 35-year amortization schedule and with an interest rate of 6.5 percent.


The estimated supportable debt level is based on the use of operating cash flows toward the reduction of debt associated with the golf course and clubhouse construction and other initial capital costs such as purchase/lease of equipment. The level of supportable debt is highly sensitive to fluctuations in financing terms, and NGF Consulting makes no assertions as to the potential borrower’s ability to obtain financing.

NGF Consulting's financial projections for the proposed facility are projections that reflect current and projected future golf market conditions and assume a top quality public golf course and related amenities. We have also assumed that the new Ferry Point Golf Club will feature excellent maintenance conditions and offer a high level of customer service.

MID-TIER OPTION

Activity Levels/Departmental Revenues

• All projections assume a golf course designed, constructed, and operated in a manner consistent with a high quality municipal golf course. This includes a golf course design consistent with the considerations noted earlier in this report. The Ferry Point Golf Club will have attractive and challenging features and a high standard of maintenance.

• This golf facility is expected to generate approximately 52,000 annual rounds of golf at stabilization, which is projected to occur by the fourth or fifth year of operation. These projections are predicated on a year-round golf season.

• It is estimated that cart utilization will be 65 percent of all golf rounds.

• Activity levels have been estimated based on current market characteristics and NGF Consulting market projections. It is expected that the new Ferry Point Golf Club would ultimately have play divided into weekday/weekend, resident/non-resident, prime/off-prime, and discount (i.e., junior, senior, promotional, twilight, etc.) categories. We also expect play to be generated from other special events such as organized outings and tournaments.

• It is not anticipated that unlimited play seasonal or annual memberships will be offered. These pre-paid green fee arrangements tend to lower average green fee revenue per round and can have a negative effect on profitability.

• Average departmental revenues per round are estimated as follows, all growing at 2% annually for the first five years, and at 3% annually thereafter:

� Golf shop merchandise - $3.00

� Driving range - $2.50

� Food & Beverage (non-banquet) - $5.00

� Other (rentals, etc.) - $3.00

• In addition to driving range activity associated with pre-round warm up, NGF Consulting expects that there will be considerable driving range-only patronage of the facility, based on the relatively few choices for golfers simply wanting to hit balls


in this highly populated market. We have therefore included a separate revenue line item for this traffic.

• The pro forma also includes separate revenue center line items for the banquet facility and the golf learning center. Banquet revenues were based largely on local comparable information supplied to NGF Consulting by the City of New York.

Proposed Fee Schedule

• The fee schedule assumed by NGF Consulting for the first five years of operation reflect the variations between round types expected at this facility, including resident/non-resident, prime/off-prime and some types of discount rounds. Fee levels presented are intended to represent an average of fees for each type (for example, the ‘prime non-resident’ is an average of weekday and weekend rounds).

• Green and cart fees used to develop the cash flow estimates were established based on input from New York City, and the current price structure at the other City golf courses.

• Eighteen-hole prime time resident and non-resident green fees are projected at $46 and $54, respectively in years one and two, increasing to $49/$57 for years three and four, and to $52/$60 for year five.

• Eighteen-hole golf carts are projected at $16.00 per player for the first two years, increasing to $17 for years three and four, and to $18 for year five.

• NGF Consulting has crafted its estimates for income in this cash flow model under the assumption that a permanent golf clubhouse will be operated at the Ferry Point Golf Club from inception. This building will include a full-service golf pro shop, bar/grille, full-service kitchen, and banquet facilities capable of seating about 300 to 350 patrons for large events. On-course beverage service is also assumed.

Cash Flow Statement

NGF Consulting has utilized the previously mentioned assumptions to create the cash flow statements in the following exhibits. Each category of revenue has been listed separately, and all figures have been rounded to the nearest $100 for simplicity.

Fixed Expenses Golf course maintenance expenses have been estimated to be $1,000,000, payroll inclusive, in the first year of operation, growing at 2.5% per year to about $1.1 million by the fifth year of operation. For years 6 through 35, maintenance expenses are assumed to grow at 3% per year.

General and administrative expenses have been estimated to be about $525,000, payroll inclusive, in the first year of operation, growing at 2.5% percent per year to about $580,000 by the fifth year of operation. The general and administrative expenses have been estimated based on the operation of a high-quality golf course, and are assumed to be the same whether the owner opts for self-operation or retention of a management company. A significant advertising budget has been assumed for the Ferry Point Golf Club based on the need to build awareness and market share. For years 6 through 35, G&A expenses are assumed to grow at 3% per year.


Departmental / Variable Expenses • Under the development scenario where the licensee builds the golf course, license

fees paid to the City of New York have been estimated based on schedule proposed to the City by Ferry Point Partners (please see Appendix E for schedule). For the mid-tier golf course option, the proposed guaranteed minimum annual fees are equivalent to 70% of the guaranteed minimums for the high-end option.

• Under the development scenario where the City builds the golf course, license fees paid to the City of New York have been estimated to be 26.7% of total gross revenues, which is equivalent to the system-wide actual payout percentage in 2004 and 2005, as reported to NGF Consulting.

• Expenses associated with operating a fleet of 80 golf carts have been estimated to be $1,500 per cart. This estimate was intended to apply regardless of whether carts are purchased or leased by the golf course.

• Direct expenses associated with operating the pro shop have been estimated to be 75% of total pro shop revenue. The estimate assumes self-operation and excludes payroll expenses (included previously). The largest expense item would be cost of goods sold.

• Direct expenses associated with the food & beverage operation have been estimated to be 60% of total revenue, including banquet. The estimate assumes self-operation and excludes payroll expenses related to the bar & grill, but includes labor expenses related to banquets. The largest expense item would be cost of goods sold.

• Expenses to operate the practice facility are included in the overall maintenance budget.

• Maintenance and repair expenses in addition to the aforementioned normal maintenance may be necessary during the course of operating a top-quality golf facility. Based on current City policy, NGF Consulting has included a schedule for capital improvements for Ferry Point Golf Club equivalent to 2% of total gross revenues, beginning in year 3 of operation. This money can be spent each year, or saved as a reserve for major repairs in the future.

• In keeping with the conservative posture taken for this feasibility study, NGF Consulting has assumed a contingency expense to account for any possible unforeseen expenses. This contingency has been estimated to be 5% percent of total operating expenses, excluding cost of goods sold and capital improvements.

• Fixed expenses associated with operating the golf clubhouse have been estimated to be $150,000, growing at 2.5% per year for years two through five, and at 3% annually thereafter. The estimate assumes self-operation and excludes payroll expenses (included previously). The largest expense item would be building maintenance and upkeep.

NGF Consulting has utilized the previous assumptions to create the cash flow models that follow.


Results

The results of NGF Consulting’s preliminary cash flow projection show that the Ferry Point Golf Club, positioned as a mid-tier municipal golf course, can expect to generate approximately $4.35 million in total operating revenues in the first full year of operation, growing to approximately $6.55 million by the fifth year of operation. Considering all preliminary expense estimates prepared by NGF Consulting for this study, earnings before interest, taxes, depreciation, and amortization will be about $479,000 in the first year of operation, growing to about $1.6 million by the fifth year of operation. These results assume that the licensee builds the golf course, thus reducing the projected license fees to the City.

Based on NGF Consulting’s analysis of the local golf market and the resulting net cash flow projections, we estimate the warranted level of investment (estimated supportable debt) for this project to be roughly $17.5 million, assuming the licensee builds the golf course. Supportable debt level is based upon fifth year net operating income with a debt coverage ratio of 1.25, over a 35-year amortization schedule and with an interest rate of 6.5 percent.


Appendices

Appendix A: Range Pro Forma

Appendix B: Financing Options

Appendix C: Demographic Detail

Appendix D: Explanation of National Price Points

Appendix E: Proposed License Fee Schedule

Appendix F: Projected Cash Flow Analyses


APPENDIX A: RANGE PRO FORMA

(insert range_proforma(1).xls)


APPENDIX B: FINANCING OPTIONS

The vast majority of golf-related projects are funded using a combination of debt and equity financing. Obtaining equity funding from an outside source entails giving up an ownership stake in the project to that party. Debt financing, which typically comes from banks or other institutional lenders, allows the borrower to retain the maximum ownership stake in the golf project. This section discusses both forms of financing.

Equity Funding

Because few golf projects are all-cash deals, all lenders require a golf facility to have a significant equity stake in the development project. A developer can generate equity funding from a number of sources, including:

• Retained earnings or personal funds.

• Sale of partnership/ownership interests to individuals, corporations, pension funds, etc. The developer receives a cash infusion in return for an equity stake in the project.

• Joint ventures with a local municipality. In this public-private development scenario, the municipality contributes funding for the golf course project in exchange for partial ownership and discounted playing privileges for residents. This can be advantageous in that the issuance of tax-free bonds lowers the cost of borrowing.

• Mezzanine financing: this usually is a hybrid type of funding combining both equity and debt characteristics. Situations often arise where a borrower needs additional capital yet is unable to secure more funds from its current lenders. It could sell an equity stake yet may be unwilling to part with ownership. Mezzanine financing provides funds to the borrower who, in return, pays an above market interest rate and gives the lender a small equity stake. The borrower agrees to the above-market rate in order to retain as much equity in the project as possible. The size of the equity stake granted can vary greatly.

• REITs (Real estate investment trusts): REITs are essentially publicly-traded limited partnerships that invest in real estate projects, including golf courses. REITs usually take over 100% ownership of the golf facility. This also brings state and federal securities laws into play.

• Golf Course Architect Fees: some golf course architects will take equity in a project in exchange for some, or all, of their design fee. Thus, while not a standard equity infusion, this method can reduce the aggregate indebtedness.

• Membership sales: the presale of equity golf memberships provides seed money for equity.

• Real estate sales: the sale of golf course frontage and/or surrounding properties for residential or commercial real estate development can be lucrative. Golf course frontage, on average, typically commands a 30-35% premium.

Because equity entails ownership, which carries with it additional risk, potential equity investors typically require larger returns on investment. This is opposed to the requirements of debt


holders, who are either secured or unsecured creditors. Either way, their claims to the assets underlying the loan/debt are superior to those of the equity owners. For that reason, rates of return on debt funding are usually less than returns required on equity.

Debt Funding

Debt financing in the golf industry typically comes from banks (e.g., Wells Fargo), insurance companies (e.g., Pacific Life), and finance companies (e.g., Textron Financial). Debt financing usually is of the conventional types, though some finance companies will make participating loans. There are two main differences between a conventional and participating loan: participating loans usually carry lower interest rates and they allow the lender to “participate” in the profits of the golf facility. This differs from a conventional loan, which features standard interest rates and amortization schedules. Conventional loans are the more common of the two.

There typically are three stages of financing, as discussed below.

• Construction Loans : As the name implies, this loan finances construction of the course. As such, the term is shorter, usually between 1-2 years. Construction loans carry the greatest amount of risk to a lender and for this reason are the most difficult to obtain.

Many of the large golf lending institutions do not participate in this early stage of financing. Local and regional banks are probably the best source for construction loans as many of these institutions are more likely to loan money based upon existing relationships. Most lenders will require a sizable equity commitment from the borrower, probably in the vicinity of 40-45% and borrowers will be required to use their equity funds first before any draws against the loan occur. It will be possible to obtain a forward commitment from a lending company (e.g., Textron) to take out the construction lender when the course is open, as described below.

• Take-out Loans : A take-out loan is a loan that occurs after construction of the course is completed. The take-out lender, who usually is unwilling to accept the added risk that accompanies construction loans, agrees to lend money to the borrower, but only when the course is ready for play. Thus, this could necessitate two separate loans: the construction loan and then the take-out loan. Many lenders will issue a “forward commitment letter,” which signifies their intention to grant the borrower financing upon completion of the construction phase. Forward commitment letters may be obtained when the borrower applies for a construction loan.

• Permanent Loans: This type of financing comes into play when the course is fully operational and has reached “stabilization” in terms of activity levels. When stabilization occurs is different for each course, but typically lenders in this phase arrive on the scene two or more years after the course has been open and generating cash flow. Some lenders may ask for equity in the project. Many lenders will “roll” a construction loan into a permanent loan, for an additional fee.


Terms

This section discusses common lending terminology and provides estimates of current financing terms.

• Loan Amounts: Loan amounts can range from as low as $100,000 to over $50 million, with the typical range falling between $2.5 - 6 million. The loan amount usually is a function of either the debt service coverage ratio or loan-to-value percentages (as defined below). Most, if not all, lenders require borrowers to exercise their equity before the loan may be drawn upon.

• Earn-outs: Earn-outs increase the absolute loan amount upon the occurrence of certain pre-specified conditions (e.g., increased NOI or revenue). For example, a lender may commit to lend $5 million, of which $3 million is available immediately. The remaining $2 million would be funded as an earn-out and only available if, for instance, net operating income increased beyond a specified dollar amount. Earn-outs reward positive performance.

• Interest Rates: Interest rates usually are variable and are based on the Prime Rate or 30-day LIBOR1. Given the added risk, rates on construction loans usually are higher than they are for other types of loans. Rates can range from LIBOR + 375-450 basis points, depending upon duration and the extent of the preexisting relationship. Local or regional banks with whom the borrower has an established relationship might loan money at a small premium to the Prime Rate, with greater equity contributions typically lowering the rate.

Interest rates on take-outs and permanent loans may be at LIBOR + 300-400 basis points. Take-outs or permanent loans based on the Prime Rate may range from Prime + 1% to Prime + 2.5%, depending upon whether the rate is fixed or variable. Fixed rate loans feature higher interest rates than do variable rate loans.

• Terms: As discussed above, construction loans are typically for 1-2 years. Take-outs and permanent loans almost always last 5 or 7 years, but may extend to 10 years.

• Amortization Period: Although typical loans last 5 or 7 years, payments are based on a 20 or 25-year amortization period, with a balloon payment due upon maturity. Thus, a 5-year loan with a 20-year amortization schedule would require payments (annual or monthly) based on a 20-year loan and a balloon payment upon maturity. The longer the amortization schedule, the higher the interest rate.

• Call Dates: Given the short terms (5-7 years) of most loans, call dates usually do not appear.

• Loan-to-Value (LTV) Ratio: The LTV ratio refers to the maximum percentage amount of the full value of the project the lender is willing to lend. The LTV can range from 50-70%; however, 55-60% is most typical. This is exclusive of land acquisition

1 LIBOR (London Interbank Offered Rate) is the most widely used measure for setting short-term interest rates in the U.S. It is the British Banker’s Association average of Interbank offered rates for dollar deposits in the London market based on quotations at 16 major banks.


costs. Thus, if a preliminary construction budget calls for $8 million and a lender offers 60% LTV, it is willing to lend $4.8 million.

• Debt Service Coverage (DSC) Ratio: Refers to the amount of NOI a facility must earn at stabilization in order to be able to safely pay debt requirements. The typical ratio ranges from 1.25 to 1.4 times debt service, depending upon the financial strength of the borrower. For example, if a facility borrows $6 million at 10.5% fixed with a 25-year amortization schedule, it will have annual payments of approximately $687,000. Assuming a DSC ratio of 1.25, the facility would need to have NOI of almost $859,000 ($687,000 x 1.25) to satisfy DSC requirements.

For construction loans, the loan amount may be a function of the DSC ratio. In this instance, the lender looks to the projected NOI (from the pro forma) at stabilization and, using a predetermined DSC ratio (e.g., 1.25), calculates the maximum indebtedness. In commercial lending, the DSC ration may be a loan covenant and lack of compliance could put the loan in “default.” Depending on the profitability of the relationship to the bank, this could result in anything from a “friendly reminder” notice to calling the loan due immediately.

• Prepayment Penalties: Many lenders assess penalties for early payment of the outstanding loan balance. An example of a prepayment penalty might be 4% if prepaid during first two years, 2% during year three, and 1% thereafter.

• Recourse Requirements: These are guarantees of the borrower’s additional assets. Recourse requirements vary considerably. Lenders typically take into account previous or existing loan relationships, the financial strength of the guarantor, the degree of risk associated with the loan, and the lending institution’s experience with this type of loan.

• Fees: Commitment fees and application fees usually range from 1 to 2.5% of the loan amount. The average rate is typically between 1.5 to 2%.

• Collateral and Secondary Financing: Lender usually takes a first mortgage lien on the course, a primary security interest in the leases and capital equipment, and a perfected security interest in all partnership interests or other equity in the borrower and all of the borrower’s assets. Secondary financing often is prohibited.

• Property Taxes/Insurance: Lenders usually require escrow of these funds on a monthly basis.

• Capital Improvements: Lender may require borrower to obtain lender’s approval prior to major construction expenditures (i.e., over $25,000).

It is important to remember that the above estimates will vary between lenders and types of loans. These estimates also will vary based upon how much the borrower “brings to the table.” In other words, the more protections given to the lender, the lower will be the borrowing rate. These protections can range from borrowing less money to giving equity or participating stakes in the golf project. Most important, realize that the lender’s terms are negotiable. Typically, a lender is forced to quote higher rates and ask for more protective covenants when initially discussing loan terms. As its familiarity with the project increases, the lender may be more willing to reduce interest rates, extend terms, reduce fees, etc.


APPENDIX C: DEMOGRAPHIC DETAIL

Summary Demographic Ferry Point Park

Population Change 10 miles 20 miles NYC

Number Percent Change Number

Percent Change Number

Percent Change

1980 Census 5,169,723 10,715,889 7,041,526

1990 Census 5,335,786 3.20% 10,862,480 1.40% 7,322,590 4.00%

2000 Census 5,837,355 9.40% 11,722,831 7.90% 8,008,278 9.40%

2005 Projection 5,957,302 2.10% 11,906,686 1.60% 8,148,734 1.80%

2010 Projection 6,067,327 1.80% 12,074,789 1.40% 8,279,364 1.60%

Households Change 10 miles 20 miles NYC

Number Percent Change Number

Percent Change Number

Percent Change

1980 Census 2,087,993 4,081,139 2,781,397

1990 Census 2,098,742 0.50% 4,101,406 0.50% 2,819,411 1.40%

2000 Census 2,232,189 6.40% 4,354,384 6.20% 3,021,588 7.20%

2005 Projection 2,230,541 -0.10% 4,323,948 -0.70% 3,024,784 0.10%

2010 Projection 2,230,674 0.00% 4,299,219 -0.60% 3,026,635 0.10%

Families (2005) 10 miles 20 miles NYC

Families 1,330,891 2,722,112 1,797,702

Average Household Size 2.61 2.69 2.63

Population by Race (2005) 10 miles 20 miles NYC Number Percent Number Percent Number Percent

White 2,724,078 45.70% 6,082,794 51.10% 3,660,064 44.90%

Black 1,260,343 21.20% 2,662,598 22.40% 2,100,528 25.80%

Asian 725,762 12.20% 1,288,374 10.80% 961,512 11.80%

Native American 21,220 0.40% 32,778 0.30% 25,865 0.30%

Hawaiian / Pacific Islander 5,485 0.10% 7,003 0.10% 6,108 0.10%

Two or More 281,532 4.70% 486,572 4.10% 358,665 4.40%

Other Race 938,092 15.70% 1,345,106 11.30% 1,034,697 12.70%

Total 5,956,512 100.00% 11,905,225 100.00% 8,147,439 100.00%


Hispanic Population (2005)

10 miles 20 miles NYC Number Percent Number Percent Number Percent

Hispanic 2,119,941 35.60% 3,257,966 27.40% 2,350,021 28.80%

Not Hispanic 3,837,361 64.40% 8,648,720 72.60% 5,798,713 71.20%

Total 5,957,302 100.00% 11,906,686 100.00% 8,148,734 100.00%

Income (2005)

10 miles 20 miles NYC Median Household Income $43,699 $47,074 $42,086

Average Household Income $65,776 $71,134 $61,367

Average Family Income $72,645 $81,251 $67,014

Households by Income (2005)


Less Than $10,000 334,446 15.00% 582,822 13.50% 476,470 15.80%

$10,000-$14,999 136,501 6.10% 250,412 5.80% 196,013 6.50%

$15,000-$19,999 119,840 5.40% 224,916 5.20% 166,672 5.50%

$20,000-$24,999 117,758 5.30% 217,587 5.00% 161,684 5.30%

$25,000-$29,999 109,362 4.90% 202,895 4.70% 150,156 5.00%

$30,000-$34,999 112,302 5.00% 208,484 4.80% 153,839 5.10%

$35,000-$39,999 111,349 5.00% 207,019 4.80% 151,172 5.00%

$40,000-$49,999 199,255 8.90% 378,638 8.80% 270,274 8.90%

$50,000-$59,999 157,940 7.10% 307,861 7.10% 216,901 7.20%

$60,000-$74,999 196,419 8.80% 390,512 9.00% 268,971 8.90%

$75,000-$99,999 223,329 10.00% 469,683 10.90% 303,140 10.00%

$100,000-$124,999 140,642 6.30% 309,644 7.20% 187,301 6.20%

$125,000-$149,999 78,752 3.50% 177,771 4.10% 102,642 3.40%

$150,000-$199,999 67,314 3.00% 149,992 3.50% 82,982 2.70%

$200,000-$249,999 28,276 1.30% 59,747 1.40% 32,611 1.10%

$250,000-$499,999 42,948 1.90% 85,383 2.00% 46,642 1.50%

$500,000+ 54,108 2.40% 100,583 2.30% 57,314 1.90%

Total 2,230,541 100.00% 4,323,949 100.00% 3,024,784 100.00%

Households by Tenure (2005)


Owner Occupied 710,782 29.40% 1,733,585 37.10% 999,491 30.50%

Renter Occupied 1,519,759 62.80% 2,590,363 55.50% 2,025,293 61.80%

Vacant 187,563 7.80% 347,411 7.40% 250,468 7.60%

Total 2,418,104 100.00% 4,671,359 100.00% 3,275,252 100.00%

Daytime Population (2004)

10 miles 20 miles NYC Establishments 203,799 422,031 260,744

Employees 2,262,222 4,445,525 2,822,191


Demographic Trend

10 miles

Summary Demographic

2000

CENSUS 2005

ESTIMATE 2010

FORECAST Population 5,837,355 5,957,302 6,067,327 Households 2,232,189 2,230,541 2,230,674 Families 1,345,903 1,330,891 1,315,602 Median Age 34.4 36.2 37.8 Median Household Income $40,083 $43,699 $47,946 Average Household Income $63,540 $65,776 $72,161 Average Household Size 2.62 2.67 2.72

Households by Income 2000 CENSUS 2005 ESTIMATE 2010 FORECAST Number Percent Number Percent Number Percent

Less Than $10,000 339,073 15.20% 334,446 15.00% 329,704 14.80%

$10,000 - $14,999 149,359 6.70% 136,501 6.10% 123,876 5.60%

$15,000 - $19,999 127,236 5.70% 119,840 5.40% 108,065 4.80%

$20,000 - $24,999 129,722 5.80% 117,758 5.30% 107,204 4.80%

$25,000 - $29,999 126,731 5.70% 109,362 4.90% 102,291 4.60%

$30,000 - $34,999 126,397 5.70% 112,302 5.00% 109,285 4.90%

$35,000 - $39,999 115,916 5.20% 111,349 5.00% 87,304 3.90%

$40,000 - $49,999 200,496 9.00% 199,255 8.90% 185,761 8.30%

$50,000 - $59,999 171,648 7.70% 157,940 7.10% 164,950 7.40%

$60,000 - $74,999 198,492 8.90% 196,419 8.80% 175,020 7.80%

$75,000 - $99,999 204,333 9.20% 223,329 10.00% 222,000 10.00%

$100,000 - $124,999 118,167 5.30% 140,642 6.30% 161,051 7.20%

$125,000 - $149,999 62,542 2.80% 78,752 3.50% 107,825 4.80%

$150,000 - $199,999 63,763 2.90% 67,314 3.00% 99,535 4.50%

$200,000+ 98,315 4.40% 125,332 5.60% 146,803 6.60%

Total 2,232,189 100.00% 2,230,541 100.00% 2,230,674 100.00%


Population by Age

2000 CENSUS 2005 ESTIMATE 2010 FORECAST Number Percent Number Percent Number Percent

Age 0-4 390,569 6.70% 420,404 7.10% 422,547 7.00%

Age 5-9 402,551 6.90% 386,141 6.50% 411,781 6.80%

Age 10-14 373,862 6.40% 378,868 6.40% 379,998 6.30%

Age 15-19 366,679 6.30% 364,203 6.10% 377,483 6.20%

Age 20-24 426,254 7.30% 379,859 6.40% 364,973 6.00%

Age 25-29 503,227 8.60% 437,500 7.30% 375,490 6.20%

Age 30-34 514,826 8.80% 492,361 8.30% 428,023 7.10%

Age 35-39 491,628 8.40% 498,854 8.40% 481,690 7.90%

Age 40-44 439,884 7.50% 471,373 7.90% 486,492 8.00%

Age 45-49 383,664 6.60% 427,384 7.20% 462,023 7.60%

Age 50-54 346,714 5.90% 378,116 6.30% 415,379 6.80%

Age 55-59 273,146 4.70% 324,953 5.50% 369,750 6.10%

Age 60-64 230,141 3.90% 265,788 4.50% 308,414 5.10%

Age 65-69 191,136 3.30% 207,828 3.50% 249,769 4.10%

Age 70-74 173,325 3.00% 169,301 2.80% 181,260 3.00%

Age 75-79 142,824 2.40% 140,236 2.40% 148,730 2.50%

Age 80-84 95,553 1.60% 106,809 1.80% 100,643 1.70%

Age 85+ 91,371 1.60% 107,325 1.80% 102,882 1.70%

Total 5,837,355 100.00% 5,957,302 100.00% 6,067,327 100.00%

Median 34.4 36.2 37.8

Population by Race Trends 2000 CENSUS 2005 ESTIMATE 2010 FORECAST Number Percent Number Percent Number Percent

White 2,661,550 45.60% 2,724,078 45.70% 2,747,144 45.30%

Black 1,270,346 21.80% 1,260,343 21.20% 1,220,742 20.10%

Native American 34,273 0.60% 21,220 0.40% 14,688 0.20%

Asian 585,960 10.00% 725,762 12.20% 849,688 14.00%


Two or More 316,806 5.40% 281,532 4.70% 269,788 4.40%

Other Race 964,104 16.50% 938,092 15.70% 958,591 15.80%

Total 5,837,355 100.00% 5,956,512 100.00% 6,066,201 100.00%

Hispanic Population Trends 2000 CENSUS 2005 ESTIMATE 2010 FORECAST Number Percent Number Percent Number Percent

Hispanic 1,937,450 33.20% 2,119,941 35.60% 2,283,672 37.60%

Not Hispanic 3,899,905 66.80% 3,837,361 64.40% 3,783,655 62.40%

Total 5,837,355 100.00% 5,957,302 100.00% 6,067,327 100.00%


Households by Occupancy Trends


Owner Occupied 683,221 28.90% 710,782 29.40% 739,672 29.90%

Renter Occupied 1,548,968 65.60% 1,519,759 62.80% 1,491,002 60.30%

Vacant 130,620 5.50% 187,563 7.80% 240,773 9.70%

Total 2,362,809 100.00% 2,418,104 100.00% 2,471,447 100.00%

Daytime Population

2000 CENSUS 2005 ESTIMATE 2010 FORECAST Establishments 0 203,799 0 Employees 0 2,262,222 0


20 miles

Summary Demographic

2000

CENSUS 2005

ESTIMATE 2010

FORECAST Population 11,722,831 11,906,686 12,074,789 Households 4,354,384 4,323,948 4,299,219 Families 2,781,454 2,722,112 2,666,708 Median Age 35 36.7 38.1 Median Household Income $43,325 $47,074 $51,873 Average Household Income $65,266 $71,134 $78,661 Average Household Size 2.69 2.75 2.81


Less Than $10,000 597,059 13.70% 582,822 13.50% 569,102 13.20%

$10,000 - $14,999 279,850 6.40% 250,412 5.80% 224,715 5.20%

$15,000 - $19,999 238,558 5.50% 224,916 5.20% 201,501 4.70%

$20,000 - $24,999 240,628 5.50% 217,587 5.00% 197,544 4.60%

$25,000 - $29,999 237,506 5.50% 202,895 4.70% 188,074 4.40%

$30,000 - $34,999 235,251 5.40% 208,484 4.80% 202,732 4.70%

$35,000 - $39,999 219,009 5.00% 207,019 4.80% 159,701 3.70%

$40,000 - $49,999 388,910 8.90% 378,638 8.80% 346,573 8.10%

$50,000 - $59,999 337,531 7.80% 307,861 7.10% 318,516 7.40%

$60,000 - $74,999 404,166 9.30% 390,512 9.00% 340,088 7.90%

$75,000 - $99,999 441,829 10.10% 469,683 10.90% 450,107 10.50%

$100,000 - $124,999 263,624 6.10% 309,644 7.20% 346,003 8.00%

$125,000 - $149,999 143,418 3.30% 177,771 4.10% 237,935 5.50%

$150,000 - $199,999 140,307 3.20% 149,992 3.50% 224,248 5.20%

$200,000+ 186,739 4.30% 245,714 5.70% 292,381 6.80%

Total 4,354,384 100.00% 4,323,948 100.00% 4,299,219 100.00%


Population by Age


Age 0-4 787,042 6.70% 823,481 6.90% 829,624 6.90%

Age 5-9 819,914 7.00% 776,093 6.50% 806,714 6.70%

Age 10-14 779,456 6.60% 781,635 6.60% 767,771 6.40%

Age 15-19 747,465 6.40% 753,128 6.30% 776,288 6.40%

Age 20-24 812,266 6.90% 758,462 6.40% 750,140 6.20%

Age 25-29 936,582 8.00% 828,643 7.00% 746,828 6.20%

Age 30-34 977,731 8.30% 915,304 7.70% 808,078 6.70%

Age 35-39 972,675 8.30% 949,978 8.00% 894,890 7.40%

Age 40-44 900,599 7.70% 937,061 7.90% 928,465 7.70%

Age 45-49 794,172 6.80% 875,086 7.30% 917,674 7.60%

Age 50-54 718,107 6.10% 780,744 6.60% 845,887 7.00%

Age 55-59 551,784 4.70% 666,501 5.60% 755,588 6.30%

Age 60-64 465,287 4.00% 540,660 4.50% 630,423 5.20%

Age 65-69 394,843 3.40% 423,626 3.60% 510,557 4.20%

Age 70-74 368,511 3.10% 350,963 2.90% 370,765 3.10%

Age 75-79 305,931 2.60% 296,122 2.50% 308,164 2.60%

Age 80-84 203,969 1.70% 227,027 1.90% 211,595 1.80%

Age 85+ 186,496 1.60% 222,173 1.90% 215,336 1.80%

Total 11,722,831 100.00% 11,906,686 100.00% 12,074,789 100.00%

Median 35 36.7 38.1


White 6,011,939 51.30% 6,082,794 51.10% 6,097,765 50.50%

Black 2,679,522 22.90% 2,662,598 22.40% 2,634,125 21.80%

Native American 51,152 0.40% 32,778 0.30% 22,920 0.20%

Asian 1,039,317 8.90% 1,288,374 10.80% 1,523,806 12.60%


Two or More 525,257 4.50% 486,572 4.10% 446,287 3.70%

Other Race 1,408,706 12.00% 1,345,106 11.30% 1,341,181 11.10%

Total 11,722,831 100.00% 11,905,224 100.00% 12,072,908 100.00%


Hispanic 2,945,132 25.10% 3,257,966 27.40% 3,541,661 29.30%

Not Hispanic 8,777,699 74.90% 8,648,720 72.60% 8,533,128 70.70%

Total 11,722,831 100.00% 11,906,686 100.00% 12,074,789 100.00%




Owner Occupied 1,660,922 36.30% 1,733,585 37.10% 1,806,938 38.00%

Renter Occupied 2,693,462 58.80% 2,590,363 55.50% 2,492,281 52.40%

Vacant 225,829 4.90% 347,411 7.40% 459,750 9.70%

Total 4,580,213 100.00% 4,671,360 100.00% 4,758,969 100.00%

Daytime Population



NYC

Summary Demographic

2000

CENSUS 2005

ESTIMATE 2010

FORECAST Population 8,008,278 8,148,734 8,279,364 Households 3,021,588 3,024,784 3,026,635 Families 1,853,223 1,797,702 1,742,929 Median Age 34.2 36 37.6 Median Household Income $38,519 $42,086 $46,384 Average Household Income $58,522 $61,367 $67,225 Average Household Size 2.65 2.69 2.74


Less Than $10,000 485,122 16.10% 476,470 15.80% 467,584 15.40%

$10,000 - $14,999 214,376 7.10% 196,013 6.50% 177,204 5.90%

$15,000 - $19,999 176,361 5.80% 166,672 5.50% 151,142 5.00%

$20,000 - $24,999 178,002 5.90% 161,684 5.30% 147,352 4.90%

$25,000 - $29,999 174,446 5.80% 150,156 5.00% 139,998 4.60%

$30,000 - $34,999 172,208 5.70% 153,839 5.10% 150,293 5.00%

$35,000 - $39,999 156,706 5.20% 151,172 5.00% 118,977 3.90%

$40,000 - $49,999 273,473 9.10% 270,274 8.90% 251,844 8.30%

$50,000 - $59,999 233,045 7.70% 216,901 7.20% 226,269 7.50%

$60,000 - $74,999 270,512 9.00% 268,971 8.90% 238,880 7.90%

$75,000 - $99,999 273,458 9.10% 303,140 10.00% 304,561 10.10%

$100,000 - $124,999 154,303 5.10% 187,301 6.20% 217,846 7.20%

$125,000 - $149,999 80,192 2.70% 102,642 3.40% 143,463 4.70%

$150,000 - $199,999 75,617 2.50% 82,982 2.70% 128,104 4.20%

$200,000+ 103,767 3.40% 136,567 4.50% 163,118 5.40%

Total 3,021,588 100.00% 3,024,784 100.00% 3,026,635 100.00%


Population by Age


Age 0-4 540,878 6.80% 578,751 7.10% 581,737 7.00%

Age 5-9 561,115 7.00% 532,688 6.50% 566,695 6.80%

Age 10-14 530,816 6.60% 527,434 6.50% 525,054 6.30%

Age 15-19 520,641 6.50% 505,607 6.20% 519,505 6.30%

Age 20-24 589,831 7.40% 526,047 6.50% 496,325 6.00%

Age 25-29 680,659 8.50% 600,844 7.40% 516,687 6.20%

Age 30-34 687,362 8.60% 666,551 8.20% 590,721 7.10%

Age 35-39 660,901 8.30% 670,825 8.20% 656,135 7.90%

Age 40-44 602,379 7.50% 637,626 7.80% 656,573 7.90%

Age 45-49 531,118 6.60% 583,755 7.20% 623,328 7.50%

Age 50-54 481,267 6.00% 521,215 6.40% 563,941 6.80%

Age 55-59 369,105 4.60% 444,824 5.50% 503,606 6.10%

Age 60-64 314,349 3.90% 359,893 4.40% 418,212 5.10%

Age 65-69 259,167 3.20% 283,497 3.50% 338,527 4.10%

Age 70-74 235,627 2.90% 231,265 2.80% 247,309 3.00%

Age 75-79 193,221 2.40% 190,251 2.30% 201,966 2.40%

Age 80-84 128,139 1.60% 143,835 1.80% 135,607 1.60%

Age 85+ 121,703 1.50% 143,826 1.80% 137,436 1.70%

Total 8,008,278 100.00% 8,148,734 100.00% 8,279,364 100.00%

Median 34.2 36 37.6


White 3,576,385 44.70% 3,660,064 44.90% 3,702,839 44.70%

Black 2,129,762 26.60% 2,100,528 25.80% 2,067,333 25.00%

Native American 41,289 0.50% 25,865 0.30% 17,427 0.20%

Asian 787,047 9.80% 961,512 11.80% 1,123,014 13.60%


Two or More 393,959 4.90% 358,665 4.40% 327,262 4.00%

Other Race 1,074,406 13.40% 1,034,697 12.70% 1,033,800 12.50%

Total 8,008,278 100.00% 8,147,439 100.00% 8,277,746 100.00%


Hispanic 2,160,554 27.00% 2,350,021 28.80% 2,524,695 30.50%

Not Hispanic 5,847,724 73.00% 5,798,713 71.20% 5,754,669 69.50%

Total 8,008,278 100.00% 8,148,734 100.00% 8,279,364 100.00%




Owner Occupied 912,296 28.50% 999,491 30.50% 1,081,836 32.30%

Renter Occupied 2,109,292 65.90% 2,025,293 61.80% 1,944,799 58.10%

Vacant 179,324 5.60% 250,468 7.60% 319,913 9.60%

Total 3,200,912 100.00% 3,275,252 100.00% 3,346,548 100.00%

Daytime Population



APPENDIX D: EXPLANATION OF NATIONAL PRICE POINTS

Price Point or NPI (National Price Index): NGF’s classification of a golf facility in terms of its type (public only) and peak season weekend full rate green fee with cart. (Note: Cart may not always be required; full rate rarely charged.) Based on national price points, the three NPI categories for a facility are as follows:

• Premium Facilities - A: Peak season weekend green fees (with cart) = $70.01 and above

• Standard Facilities - B: Peak season weekend green fees (with cart) = $40.00 to $70.00

• Value Facilities - C: Peak season weekend green fees (with cart) = $39.99 and below

• Private Facilities are listed as P in the price point column.


APPENDIX E: PROPOSED LICENSE FEE SCHEDULE

The table below summarizes Ferry Point Partners’ proposed license fee schedule to the City under the scenario where the licensee builds the golf course.

Minimum Annual Fee v. Percentage of Gross Receipts

Guaranteed Minimum Annual Fee

Years Minimum Fee

1 - 3 $1,250,000

4 - 8 $1,350,000

9 - 15 $1,500,000

16 - 20 $1,800,000

21 - 25 $2,300,000

26 - 30 $2,600,000

31 - 35 $3,000,000

Percentage of Gross Receipts

Years Golf Course Driving Range Restaurant

1 - 8 8.0 11.0 5.0

9 - 15 9.5 13.0 6.0

16 - 20 10.0 15.0 6.5

21 - 25 10.5 17.0 7.0

26 - 35 11.0 30.0 8.0


APPENDIX F: PROJECTED CASH FLOW ANALYSES

High-End Developer Builds

(insert Final NGF Speedsheets.xls High End)



High-End City Builds

(insert Final NGF Speedsheets.xls High End City Builds)



Mid-Tier Developer Builds

(insert Final NGF Speedsheets.xls Mid Tier)



Mid-Tier City Builds

(insert Final NGF Speedsheets.xls Mid Tier City Builds)

golf market and financial analysis for the proposed ferry point … · 2016. 5. 23. · golf market...

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