Sherman Oaks : Profit Rate Slows at Miniature Golf Park

A municipal miniature golf and recreation center continues to make money for the city, although profits grew at a markedly slower rate this past year than in the previous year, a parks official said Friday.

Sherman Oaks Castle Park, on Sepulveda Boulevard near the San Diego and Ventura freeways, made about $2,664,000 in the 1994-95 fiscal year, a 2% increase over its 1993-94 profits, said Joe McElvogue, a parks administrator. The park made about $2,622,000 in 1993-94, a 22% increase over its 1992-93 profits.

Profits began to soar in May, 1993, when the city took back the attraction from Malibu Grand Prix, the private firm that had leased it from the city. Officials at the city’s Recreation and Parks Department said the operator had not conscientiously maintained the facility and had tolerated loitering youths.

One explanation for the slower growth rate is that the snack bar, one of the park’s four attractions, has been losing money. The snack bar operator, Julian Montoya, has asked the city to reduce his rent from 21.5% of his sales to 15%. Parks department staff support his request, which will be considered by the Board of Recreation and Park Commissioners on Wednesday.

McElvogue blamed the snack bar’s losses on park users who bring their own food, competition from nearby fast-food restaurants and the food prices, which are keyed to adult-size portions. He said the prices have not been popular with families.

As a result, the city’s rental income from the snack bar declined 2% this past year to about $82,000. McElvogue said the department decided to support Montoya’s bid for a rent break after learning that comparable businesses pay a rent of 11% of their gross sales and because it did not want to take over management of the snack bar at the height of the busy season. Within the next year, the city plans to advertise for bids on new contracts for operating the video arcade, batting cages and snack bar concessions.

The city spent $100,000 in 1993 to renovate the facility, installing new artificial grass on the golf fairways, repainting interiors and making other improvements. Montoya has sunk $200,000 in new kitchen equipment, according to a city staff report.