Editor’s note: This story was originally published in Golf Inc. magazine and authored by Katie Thisdell.
EL SEGUNDO, California (May 5, 2021) – Expanding on its widely successful driving range concept, the company is breathing new life into a 9-hole municipal course in Southern California.
In a first-of-its-kind project set to open next spring, Topgolf — the tech-driven firm that reinvented the driving range into a hip, high-energy experience — is going old school.
Well, sort of. . . When Topgolf ’s El Segundo, Calif., venue opens, the $40 million project will include an addition to the company’s uber successful model: a 9-hole municipal golf course.
“Innovation is at the core of our DNA as a company,” said Craig Kessler, Topgolf ’s chief operating officer. “This was an awesome opportunity to prove that yet again.”
Topgolf is renovating an existing 9-hole course to bring it in line with the company’s vibe, as well as developing the driving range into a three-level facility with a restaurant and entertainment venue. It was a package deal, Kessler said.
Should we expect to see more Topgolf courses? The company recently merged with Calloway Golf, creating a monster golf conglomerate that would seem able to experiment with all sorts of new concepts. “At this point, I think it’s hard to say,” Kessler said. “We’re really looking forward to seeing how this performs.”
The city of El Segundo has high hopes for the project, which has been in the works for nearly a decade.
“This is a rare moment in the city’s history,” said a staff report recommending the public-private partnership.
Opened in 1994, The Lakes at El Segundo had been run by a professional management group, but the public course was losing money — and lots of it. Recently it was being subsidized by the city to the tune of $275,000 a year. A nearly $5 million loan has never been repaid, said City Manager Scott Mitnick.
The green fees at the municipal course were based on the city council’s desires rather than on the market and therefore could become political, Mitnick said. The low rates hampered revenue potential and prevented any reinvestment in the course, he said.
Now the city of El Segundo expects at least $1.7 million a year to go into its general fund as a result of Topgolf ’s ground lease payments, 3% of gross beverage sales and additional tax revenue. The company says it will invest a minimum of $200,000 annually in property improvements.
Of course, this 26-acre piece of land could certainly be developed in other ways. Just to the north, there are skyscrapers. A shopping center or car dealership could bring in even higher revenue.
“Is that the best land use for us? No,” Mitnick said. “This is a special land use, a sense of pride for the community. We’re lucky to have it. Having this green space, getting $2 million a year, getting a beautifully maintained property that I don’t have to pay a dime to maintain, and I get a world class operator. For this property, it doesn’t get any better.”
Demand in the area for both golf and entertainment is high. With about 10 million residents in Los Angeles County, where El Segundo is located, there are plenty of existing golfers as well as potential new clients, including families and young professionals with disposable income, Mitnick said.
“Even if golf is decreasing in popularity in general, there’s a finite number of places to play golf in the area,” he said. “The number of places to play is lower than the demand. We’re not building new courses, so the demand for municipal courses is very, very strong.”
When the venue opens, possibly as early as May 2022, golfers can expect to see big changes to the existing 9-hole course and driving range. Topgolf plans to add lighting for night golf and expand the short game practice area for putting and chipping. The new three-level, climate- controlled driving range will offer 102 hitting bays equipped with the state-of-the-art Toptracer technology, which tracks the flight path of every shot.
“Our job is to protect and preserve the aspects of the course and the range that people who have been visiting for years enjoy the most,” Kessler said. “We’re going to layer on top of that the things that bring the Topgolf secret sauce to life.”
A new clubhouse, a banquet hall, two new restaurants and a pro shop round out the project. Topgolf expects to employ nearly 400 people at the facility.
To help with course management, Topgolf has partnered with Indigo Golf Partners, previously known as Billy Casper Golf which was recently purchased by Troon.
The golf industry has long hoped that Topgolf and other technology and entertainment driven golf enterprises could help grow the game by creating crossover customers who would become new golfers.
At El Segundo, Topgolf will guarantee access for local youth groups and schools to encourage the development of junior golf programs. It also plans to provide local resident discounts.
“This will hopefully be another proof point” that Topgolf ’s approachable model is actually helping grow the game, Kessler said.
National Golf Foundation research indicates that venues such as Topgolf ’s are having a positive impact on the growth of the sport.
The company plans to track the percentage of customers at Topgolf who also play on green grass courses and vice versa. “We’re very optimistic that it’s going to work,” Kessler said.
When he was younger, City Manager Mitnick worked at an old-money, male-dominated country club. It wasn’t until 2019 that he first visited a Topgolf site. What he saw was the antithesis of that traditional club environment.
“I think Topgolf brings an excitement to the game that wouldn’t be there otherwise,” he said.
So what’s next for Topgolf? More municipal courses? An expansion to 18 holes? The company is mum on future real estate transactions, so only time will tell.
“I think we’re open to exploring all sorts of possibilities,” Kessler said
Topgolf El Segundo is one of two new Topgolf venues coming to Southern California in early 2022.
The other, Topgolf Ontario, will be about 50 miles away in San Bernardino County on 14 acres of undeveloped, county-owned land adjacent to Cucamonga-Guasti Regional Park. Expected to employ about 400 people, the 600,000-square-foot, three-level venue will have 102 hitting bays, a restaurant and bar, and space for corporate and social events.
During the initial, 20-year ground lease, San Bernardino County expects to receive more than $625,000 in annual revenue, which is earmarked to benefit the county’s regional park system.
The county first pitched the site to Topgolf more than four years ago, and the ground lease was approved in April 2019.
“Topgolf chose the county of San Bernardino due to its convenient regional location to the Inland Empire, strong retail performance, and large and growing population base,” said Chris Callaway, Topgolf ’s chief development officer.
Topgolf also has two other California locations. Topgolf Roseville opened near Sacramento in 2016, and Topgolf San Jose is expected to open this year.
