Once on life support, Myrtle Beach city-owned golf course now filling coffers

Golfers play at Whispering Pines Golf Course in 2014.
Golfers play at Whispering Pines Golf Course in 2014.

Whispering Pines Golf Course was once a financial burden to the city of Myrtle Beach.

In 2014, the city reported the municipal course had been operating at an average loss of about $250,000 annually over the previous four years.

“We had a great debate. We were going to shut that thing down,” Myrtle Beach City Councilman Phil Render said Tuesday.

This summer, Atlantic Golf Management owner Chip Smith has written the city four checks totaling $134,184 for his operation of the course over the past year through a concessionaire agreement.

Smith’s company began operating Whispering Pines on Nov. 1, 2014, and he gave what has become an annual update to the City Council on Tuesday.

He reported paid rounds played that are comparable to the heyday of Myrtle Beach golf in the 1990s and a profitable operation, and both sides are now moving forward on a five-year option for Smith’s company to continue operation through 2024.

“The parties can exercise another five-year option and I think council would be amenable to that now if there are no contractual mechanics involved that would prevent us from doing that,” Render said. “We’ve asked the city staff to explore how to proceed along those lines.”

Smith said the course played 50,149 rounds for the city’s 2016-17 fiscal year through June 30, which is an increase from the 45,753 rounds the course played in 2015-16, and far outpaces the Myrtle Beach area average of about 36,189, according to figures compiled by the Grand Strand Tee Time Network.

Smith said the course had $1.724 million in revenue compared to $1.538 million in 2015-16, and full-year revenue projections from the first fiscal year he operated the course in 2014-15 were about $1.1 to $1.2 million.

“We’re just impressed with a municipal golf course, a community asset playing 50,000 rounds in one year,” Render said. “Contrast that to when we had it four or five years ago. If we did 36,000 rounds we were tickled. The bottom line is we have been able to retain a community asset residents of Myrtle Beach and Horry County can enjoy for a moderate price.”

Whispering Pines, which is across Harrelson Blvd. from Myrtle Beach International Airport, has done it with quantity rather than high rates. Smith said the average price per round has been $32.86 over the past year, and locals pay $30 year round. “We’ve held our local rate at $30 plus tax because it is a municipal golf course owned by the city and we felt it was important to keep a good affordable rate for the locals and that has done well for us,” Smith said. “The locals have been very supportive of us.”

Smith said he played about 5,000 package rounds, but he plans to join marketing cooperative Myrtle Beach Golf Holiday on Jan. 1 so that number could increase.

“We wanted to get the golf course in very good shape before accepting package play,” Smith said. “I do have some room for improvement there.”

Per the concessionaire agreement, Atlantic Golf is paying the city 3.5 percent of gross revenue each year once the course surpasses $1.1 million. The company also covers the $22,800 city lease payment to Horry County for the practice facility land, adds 10 percent of practice facility net sales, and adds 3 percent of total sales that include golf, merchandise and food and beverage. The latter payment is earmarked for capital improvements at the course.

The check for 3.5 percent of gross sales was $58,764, the 3 percent check was $50,369, and the practice facility 10 percent check was $2,550.

“I knew it was a good location and a good layout,” Smith said. “It has done probably a little better than I expected, and it has been fun.”

Capital improvements planned by Smith over the next five years include upgraded irrigation, new on-course restrooms, new clubhouse carpeting, repaved cart paths, and a new clubhouse heating and air conditioning unit. The old restrooms have already been torn down and Smith expects the irrigation work to be done this winter.

Those may all be paid for through the 3 percent gross revenue funds set aside for capital improvements.

A five-year extension will make it more enticing for Smith to spend his own money at the course. “Me reinvesting in maintenance equipment and carts and things like that, having an extended agreement certainly helps,” Smith said. “It gives me a longer term outlook on how I handle things.”

Render said the city would also consider reinvesting the 3.5 percent of gross revenues it receives.

“I think we’ll give that strong consideration as we want to have a facility of which the city is proud,” Render said. “In order to maintain interest you have to reinvest in your assets.”

Smith and Whispering Pines were featured as a success story last month in an article in The Pellucid Perspective, a golf industry newsletter, as well as in a recent New York Times business section article on struggles and successes in the golf business.

Nine holes of Whispering Pines were built in 1962 as part of the Myrtle Beach Air Force Base and another nine of the 6,730-yard course were added in 1986.

The city took over the course from the U.S. Department of Defense shortly after the base closed in 1993, and Myrtle Beach had to receive approval from the U.S. National Park Service for the concessionaire agreement. The course must be used for golf or other recreation and cannot be leased to another entity.

Smith may not be done in the Grand Strand golf market.

He said he has made multiple offers to lease and manage courses in the Myrtle Beach area but nothing is pending.

Another one of his reclamation projects is doing well in Florida. He and partners purchased a struggling public course called Binks Forest Golf Club in Wellington, Fla., last year and have turned it into a private club with 300 members renamed Wellington National.

Smith said he is also involved with a hedge fund group that buys properties, and some have golf courses that his company would manage. He said the group is currently looking at properties in the Caribbean and Pinehurst, N.C.

Alan Blondin: 843-626-0284, @alanblondin