The 36-hole, publicly owned Harborside International Golf Center is getting a face-lift as the company that manages it looks to cut maintenance costs and boosts revenue.
Northbrook-based KemperSports Management today announced it is beginning a $1.7 million renovation of the pair of courses between Lake Calumet and the Bishop Ford Freeway that will cut in half the acreage of bunkers on the links.
The project, which will be done in three phases, is designed to improve drainage on the course and lower the frequency of washouts after it rains. The 14 acres of bunkers on the course were difficult and costly to maintain for KemperSports, which leases the courses from the Illinois International Port District. At least 27 of the holes at Harborside will remain open during the renovation.
“We are confident that this renovation will set Harborside International on a path for continued success,” KemperSports CEO Steve Skinner said in a statement. “This project will solidify Harborside’s reputation as the finest-conditioned public golf course in the city.”
Putting money into the course renovation comes two years after KemperSports made a similar investment to upgrade its clubhouse and dining room.
Reducing maintenance costs and maximizing profit at the 22-year-old course is key for KemperSports, which pays the Port District a management fee of at least $100,000 per year to run the facility. That minimum fee is guaranteed even if KemperSports falls short of it in course profits.
REVENUE SHARING
The arrangement prevents the Port District from taking a loss on the course, but it can make more than the $100,000 fee if profit exceeds that figure.
If it does exceed $100,000, KemperSports gets a management fee of 3 percent of the course’s revenue. If the course’s profit exceeds $100,000 plus 3 percent of revenue, the next 3 percent of revenue beyond that goes into capital investments at the course.
KemperSports then gets another bonus equal to 1 percent of revenue if there are profits leftover after that. And the Port District and the company evenly split revenue beyond that.
KemperSports originally struck the 10-year deal in 2013 with the Port District, the city-state agency that oversees the Southeast Side complex used by companies that use Chicago’s waterway system to transport bulk commodities. Last year, the two sides extended the deal by 10 years, which means Kemper will run the course through 2033.
The company last year paid the Port District around $400,000 in profit and $164,000 for capital investments, according to a KemperSports spokesman. That’s a far cry from the annual losses the Port District endured running Harborside before privatizing its operations.
The agency lost $2.4 million on course operations between 2009 and 2011, according to its financial statements.
The spruce-up for Harborside also comes as a nearby public golf course that may compete with it for customers heads toward its own overhaul.
The Chicago Park District is pushing to transform its Jackson Park and South Shore golf courses along Lake Michigan into an 18-hole championship course designed by Tiger Woods with a $30 million renovation. The city even formed a new nonprofit organization, the Chicago Park Golf Alliance, to raise money for the effort to redo the links 7 miles north of Harborside.
