City Councilor Diane Gibson Outlines Her Support For TopGolf Project

Councilor Gibson has co-sponsored legislation for the project

What is TopGolf?

TopGolf is a privately held company operating 42 venues, which serves an estimated 13 million customers annually. The game consists of climate-controlled bays in a high tech driving range where microchipped balls give immediate scoring and performance feedback. It is a family-friendly sport suitable for all ages and skill levels.

As one of the co-sponsors of the legislation for the TopGolf project, I wanted to take a moment to outline why I am supporting this endeavor. Please know that if I didn’t believe in this project, there is no way that I would have agreed to be a sponsor.

First, let me start by saying that I believe TopGolf is a good, viable project that will bring new dollars to our City and add to our economic base. The TopGolf legislation (O-18-19 and R-18-28) was approved by the Council because it is a good project and a good deal for the City. The project expects annual revenues of $15,000,000, and will create 132 full-time jobs with benefits, along with additional part-time service jobs.

I understand the concerns that some constituents have expressed with regard to the perception that the City is supporting “an out-of-state company” over local, homegrown businesses. In fact, when I first came on as a City Councilor, my thinking was pretty much along these lines:  “big companies – especially out of town ones – should make their own way without subsidies.”

I learned very quickly that negotiating terms are a common, and often times necessary part of being a legislator and doing what’s best for our city. I believe that we do – and that we SHOULD continue to – assist local businesses, but NOT at the expense of bringing in viable, solid, invested employers. It is not an either/or question. We need both. 

Over the past four and a half years that I’ve been on the Council, the City has entered into similar arrangements with maybe a dozen businesses using IRBs (Industrial Revenue Bonds), LEDA funds (Local Economic Development Act), or Tax Increment Financing.

I am very protective of public dollars, so you can believe that we made sure clawbacks were in place for each project, and that each project underwent scrutiny from multiple departments — economic development, legal, council, sometimes others. Each of these projects had clawbacks where needed, and all have provided economic growth and much needed jobs for the long-term. Without City and/or County investments, these businesses would have gone elsewhere, and the jobs would have gone with them.

It’s everyone’s wish to find the perfect model – to build local wealth by manufacturing goods or providing services, using local resources and selling to customers outside of our state. We all want that, and the City of Albuquerque has very proudly supported many local startups that do just that.

However, the fact remains that if we wait and hold out for only the perfect, ideal projects, we are going to miss out on some very good opportunities. Opportunities like TopGolf.

Here is what TopGolf has agreed to:

  • The construction of the venue including impact fees, permitting, building, parking lots, landscaping, etc.
    • The estimated cost to developer: $38.8 million with $400,000 to be reimbursed by the City of Albuquerque.
  • The construction of Culture Dr NE from Montano Rd NE, to Desert Surf Cir NE – built to City specifications.
    • The estimated cost for this construction is $326,000 and will be reimbursed by the City.
  • Job commitment and performance clawbacks. TopGolf will hire at least 132 full-time employees (receiving benefits), with additional part-time service jobs. Clawbacks are included in the contract (Project Participation Agreement).
  • Provide marketing for the Albuquerque venue, as they do for their other locations.

Here is what the City of Albuquerque has agreed to:

  • Reimburse $400,000 towards construction of the venue after it is open for business.
    • If necessary, the City will execute the facility closure clawback within the first ten years of operation (this means that, should the business close during the first ten years of operation, the business will pay the City a percentage of the $400,000 – based on the period of time that the facility was open for business).
  • Reimburse $326,000 towards the construction costs of extending Culture Dr NE from Montano Rd NE, to Desert Surf Cir NE. This includes planning, studying, designing, constructing and equipping improvements; the developer will obtain all permits and approvals necessary for this construction and will follow the City’s requirements for the construction of public infrastructure.
    • Reimbursement will be made after the City has inspected and approved the road, and after the venue is open for business.
  • Reimburse, over time, $1.84 million for land and infrastructure costs, from the City’s gross receipts taxes (GRT) generated by TopGolf. This is paid out at a rate of 50% of the GRT received by the City, for the TopGolf operations only. Reimbursement payments are made until the $1.84 million is reached.
    • This reimbursement is not a “handout.” TopGolf will be generating revenue in order to reach this benchmark; they will also be paying taxes (GRT, property taxes, etc.), and would not be reimbursed if they do not perform. Right now, the vacant lot is not generating GRT, and property taxes are less than what they will be, once the venue is constructed.
  • Monitor performance for employment and execute claw backs according to the contract when necessary (annual average of 132 full-time jobs)

Overview of the benefits to the people of Albuquerque:

  • At least 132 full-time jobs will be added, and maintained annually, by a reputable employer; these jobs will include employer-provided benefits. Additional part-time service jobs will be available at this facility when it opens, and project based construction work will take place.
  • It is a good land-use, for an infill project utilizing a unique property that has been vacant for over 14 years.
  • Property taxes will increase. Over the next 30 years the City will collect an estimated $4.7 million in additional property taxes.
  • Albuquerque is included in the TopGolf marketing program. It becomes a desirable destination for visitors and aids the local tourism industry.
  • The project provides a high rate of return for a City investment.
  • Built-in insurance protects the City’s investment with clawbacks. Compensation would return to the City in the event TopGolf fails to maintain employees or closes business within the first ten years of operation.

TopGolf has shown, in the 16 states and four other countries where they are present, that it builds its own patronage and doesn't compete in the same way others do. To the extent that all entertainment venues are shared to meet market demands, there are differences between customers who spend their entertainment dollars on spectator events (like movies, plays, concerts, etc.), and those who would choose participatory events (like bowling, laser tag, paintball, etc.). About half of TopGolf’s patrons are non-golfers, so it also introduces golf to novices.