Advice and Opinion

Are golf courses suitable for development?

Media Business

A joint statement by The City of Cape Town’s Mayoral Committee Member for Economic Opportunities and Asset Management, Alderman James Vos and Councillor Zahid Badroodien, Mayoral Committee Member for Community Services and Health:

Rapid urbanisation is leading to an acute need for accommodation that is close to economic opportunities, amenities and public transport. However, one needs to be mindful that not every tract of City-owned land is suitable for this purpose. 

The viability of certain golf courses can be considerably challenging due to the exorbitant maintenance expenses associated with the extent of the site. This in turn raises the question; can the site footprint of certain golf courses not be reduced? The City, through the Recreation and Parks department, is currently assessing each golf course that is situated on City-owned land according to its individual merits, challenges and future potential. 

Some of the options under consideration are to potentially reduce the size of a golf course and incorporate income generating compatible uses, which may include in-fill housing opportunities. These suggestions are but a few of the options under consideration. 

The Rondebosch Golf Club, located on 45,99 hectares of City-owned land has been the subject of scrutiny for housing opportunities. The property is zoned Community Facility Use and Public Open Space. But zoning aside, the reality is that approximately half of the land (23,2 ha) is below the 1:50 year flood line, which creates limitations in terms of the development potential of the property and lease potential. 

The golf course was designed to prevent neighbouring properties from flooding. Additionally, the elongated rectangular-like shape of the open space with the Black River running through the north-east section limit the proportion of the site available for development. The access point to the property is situated in the south-east corner of the property, which is approximately 1.5 km from the north-west corner of the property, a considerable distance with no access points in between, which further reduces the area available for development.

This in turn results in access limitations both in terms of vehicular access as well as public transport thereby reducing the trip generation capacity of the site. Therefore, the Rondebosch Golf Club will always have the above constraints that will prevent any proposed development. Due to these limitations, its current use as a golf course is considered consistent with metropolitan spatial policy. 

The current lease renewal is under consideration. The City intends seeking Council approval to conduct a public participation process with respect to the proposed granting of a further 10-year lease agreement to the Rondebosch Golf Club. The City therefore wants to ensure that after Council has given due consideration, members of the public are aware of and encouraged to submit their comments and or objections to the proposed transaction. 

The development and occupancy of the site dates back to 1911 and has been formalised by way of a lease agreement which will expire on 31 December 2020. The historical and current use is a golf course, operated by a registered NPO. The site is currently not required for municipal purposes from a spatial planning perspective. There are also no apparent conflicts of this application with the provisions of applicable City’s spatial planning policy, and including the transit oriented development policy.

The key motivating factors informing the City’s intent to consider a further 10-year lease agreement are essentially as follows:

  • The course is situated within a high flood-line/wetland. The golf course was designed to provide a holding area for the on-site storage of floodwaters, to prevent flooding of properties.
  • Rondebosch Golf Club is at the forefront of the Cape Town golfing community in driving transformation and development in golf. Over 50% of their membership are from the previously disadvantaged groups and they pride themselves on being racially and culturally diverse. They have a very active and successful development programme for the youth.
  • Accessible local parkland and public open space is retained.
  • Ensure the continued contribution to employment.
  • Ensure and increase the use of existing facilities to support cultural activities and events.
  • Respecting the diverse heritage of different communities and events.
  • Attracting a diverse pool of South African talent and creating an institutional culture where all talent can thrive.

Security of tenure will result in significant improvement to our municipal infrastructure and up keep of public open space.

The continued existence of the golf club would be of substantial benefit to the local community as it provides a secure gathering point and multi-use facility while ensuring the preservation of a well maintained, accessible local parkland area and contributes to employment, all at no cost to the City.

The lessee has indicated their interest to continue leasing the property and would be responsible for maintenance and up-keep of the property to the tune of about R6 million plus per year.

Future upgrading of the property entails re-surfacing the parking lot, replacing the roof of the workshop, replacing the clubhouse’s roof (historical building), re-painting of all the buildings, re-surfacing the forecourt, upgrading the entrance and lobby area, upgrading the perimeter fence, upgrading security (including possible perimeter lighting).

This transaction will be beneficial and have exceptional cost advantages for the City if you consider the operational burden associated therewith.

The City of Cape Town hosts a number of Sunshine Tour tournaments recognising that the golf industry and its economic and tourism contribution goes much further than the social game:

  • The golf industry’s national contribution is estimated at R1,5 billion with the total estimated player contribution for Cape Town clubs estimated at R226 million for 2015. (Source: Weser’s 2015 Analysis).
  • Golf Clubs also play an important role within the sporting industry such as driving transformation and development within the sport as well as developing training programmes for the youth.
  • Western Cape continues to hold a firm share of the domestic and overseas golf tourism market. Western Cape received over 50.1% of the visitors from the overseas market combined with 46.5% from the domestic market and 3.4% from Africa.
  • Weser cited the Western Cape as the driver of 50,8% of the domestic golf market followed by Gauteng and KwaZulu-Natal.
  • Golf Clubs play an important and meaningful role in the community. The City is however mindful of the need to improve accessibility and affordability in all its sporting facilities and encourages a multi-use more intensive utilisation.

The City in partnership with the lease holders, club management and the Western Cape Golf Club Managers Association are committed to improving affordability and accessibility and ensuring that the golfing opportunities convert to a meaningful  environmental, social, sporting, tourism and economic contribution.

Due to the specialized sporting nature of golf courses, diverse streams of income, low margins, cost of maintaining City land, and differing membership numbers, the City has recommended that it would be more appropriate to apply a consistent tariff to such properties as opposed to a market rental. That being said, the City recognises that the historic one size fits all social tariff approach needs to be reviewed.

Therefore, the City is reviewing tariff mechanisms applicable to sporting precincts, recognising their unique nature and has proposed that a monthly tariff be applied, subject to the following:

  • The club shall provide annual audited financial statements.
  • The club shall provide copies of commercial sub-lease agreements.
  • Any commercial activity, excluding the pro-shop, functions/events, tea room/ restaurant and bar will be subject to a rental review.
  • Rental will exclude rates.
  • Rental will exclude utilities.

The proposed tariffs for 2020/21 will be submitted to the Economic Opportunities and Asset Management Portfolio Committee and the Executive Mayor together with the Mayoral Committee for consideration and recommendation to Council.

It is important to bear in mind that the rental income is the smallest of the financial contributions the City receives from golf clubs. The clubs have historically entered into lease agreements, which permit the use of the land for sporting purposes, upon condition that the course is fully maintained by the respective club. The economic, operational, environmental and development contributions of this amateur and professional sport are significant. 

The golf courses situated on City-owned land are administered in terms of full maintenance lease agreements. In other words, the respective Golf Club, established as a not for profit entity, are required to raise funds to cover the entire operating costs of the leased footprint including utilities provided by the City.