Harding Park’s PGA agreement revised to address criticism 

TPC Harding Park will host the World Golf Championships Cadillac Match Play in April. - ERIC RISBERG/2013 AP FILE PHOTO
  • Eric Risberg/2013 AP file photo
  • TPC Harding Park will host the World Golf Championships Cadillac Match Play in April.

There was much celebration across San Francisco when the PGA Tour announced that The City would host a championship golf event at TPC Harding Park in April, although the deal's financial arrangement faced a bit of a hazard last month.

Four weeks later, a renegotiated agreement returns for a vote today and it appears headed for approval, allowing event planners to proceed with the World Golf Championships Cadillac Match Play set to begin April 29. The sticking point for some members of the Board of Supervisors and board Budget Analyst Harvey Rose was that while San Francisco is fully reimbursed by the PGA Tour for the costs of putting on the event, The City was not expected to share in the tour's profits.

In fact, such a financial arrangement has long been the practice. Since 2005, the PGA Tour, in partnership with the Recreation and Park Department, has held five events at the golf course, generating $17.7 million in gross operating revenues but The City received no portion of those funds, according to Rose's report. Though these past agreements said The City would share in some of the revenues, they stipulated that the PGA Tour would have to reach a certain revenue threshold per event, which it never achieved.

"The threshold is too high," Rose said at the board's Dec. 10 Budget and Finance Committee meeting, when Rec and Park asked for approval of the agreement for the April event. The committee meets today to vote on the renegotiated deal.

Supervisor John Avalos, who sided with Rose last month, said Tuesday in a text message: "In the previous agreement, I believed a lot of money was left on the table and asked that Rec and Park renegotiate with PGA. I was glad to see a new agreement that gave the city a greater chance to get revenue and that budget analyst could recommend."

Part of the reason for the concern about revenues is that The City golf courses run at an operating deficit, estimated at $5 million for the current fiscal year, which includes $2.4 million for Harding Park.

"The PGA has very high standards for maintenance," Rose said. "That's one of the things that's driving the deficit up."

Rec and Park General Manager Phil Ginsburg said Tuesday that "the most important thing is our expenses are reimbursed." He added: "If we make a little bit more, that's great."

Under the new deal, The City would receive 6.66 percent of operating revenues greater than $4 million, not the previously proposed threshold of $8 million. This is expected to generate $79,920 for the department. The PGA Tour's total operating revenues for the match play championship are estimated to be $5.2 million.

The deal also impacts the agreement for hosting the 2025 Presidents Cup, where The City would receive 6.66 percent of the gross operating revenues greater than $9.5 million, which is expected to generate $1.03 million for Rec and Park. The 2020 PGA Championship will be at Harding Park, but that is run by the PGA of America, not the tour.

With the issues seemingly resolved with the PGA Tour deal, the shift in focus is readying the course for the big event. The PGA Tour will pay up to $1.3 million for work on the fairways and greens, and to cover the expected loss of $500,000 in revenue when the course is closed for the event and three weeks prior to it.

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