Opinion ID: 1822350
Heading Depth: 3
Heading Rank: 2

Heading: Can a Municipally Owned Golf Course be a Business?

Text: The majority concludes that the mere fact that golf courses are a permitted use in a business district does not necessarily make a golf course a business area. The majority notes that a golf course may also be a permitted use in a residential district. But this example does not demonstrate that a golf course is not a business. If the golf course in this example were separately zoned PF, as in our case, the residential zoning of the surrounding area would be irrelevant to the question of whether it is a business area because, as the majority stresses, that question only focuses on the single zoning district. If, on the other hand, the example assumes that the golf course is not separately zoned, but is a permitted use in a residential zone, this does not mean that the golf course is not a business. The question would be whether the primary use of the zone is residential. If it is, the business use of a part of the zone for a golf course would not satisfy the federal or state criteria because it would only be incidental to the primary, residential use of the large zone. 23 C.F.R. § 750.708(d) (2003). Where a municipally owned golf course is separately zoned, the question whether it qualifies as a business area should turn on whether it has the characteristics of a business. If it is provided to the citizens at less than cost, as part of a park system that is subsidized by taxes for the general welfare of the community, one could conclude that it is not a business area. But if, as our undisputed facts show, it is operated for a profit and only serves fee-paying customers, similar to any privately owned golf course, I would conclude that it is a business area. Here, the City incurred bonded indebtedness of over $3 million to build The Bridges, installing over 20 miles of irrigation pipe, high maintenance turf, artificial ponds and a lighting system for the driving range. The Bridges generates revenue from the sale of the golf rounds and lessons, the sale of merchandise in the proshop and the sale of food and liquor in the clubhouse. The City's residents do not receive any discount for golf rounds. In fact, the rates are among the highest in the area for nine-hole golf courses. The City advertises the course and maintains loss-of-business insurance coverage. The Bridges generates annual revenue of about $800,000 and net income of $200,000 per year. These revenues are kept in an enterprise fund, separate from the general revenues of the City. In other words, The Bridges was created for business purposes, to generate revenue for the City; it is operated as a business, using the same business models as are used by privately owned, for-profit golf courses; it competes for customers with other golf-course businesses; and it charges customers at the high end of market rates. This satisfies the criteria for a business area.