The Burlingame Voice

Topgolf: Is the cash cow running low on milk?

We noted the news that Callaway and Topgolf were looking to get a divorce here on the last Topgolf post.  I didn't fully catch that the financial struggles were on the Topgolf side instead of the equipment (Callaway) side, but a WSJ piece lays it all out.  The entertainment center business (i.e. the hi-tech driving range) is good--just not quite as good as it has been.  There are big hopes in City Hall that Topgolf will drive serious tax revenue allowing the city to shoot for the green with a smooth pitch and sink some long putts.  But.....

Serious golfers are reliably showing up on golf courses, spending money on their equipment and golf balls. But recreational players are no longer as keen on shelling out some $70 an hour on a driving range for fun these days.  Lately, the Topgolf business has been hit hard by slowing consumer spending. Same-venue sales fell 8% in the second quarter from a year earlier, the fourth consecutive quarter of declines. The sales drop was even worse for big-group events because of “corporate belt-tightening,” according to the company.  (Ed:  think Westin, Hyatt, Marriott).

The company initially thought that visitors to Topgolf would become newbie golfers who might seek out its products after trying them out at those venues, which carry Callaway equipment. As it turns out, hitting a few balls at a recreational driving range isn’t enough to convert people into Callaway faithful.

The steeper price tag might be one contributor: In its location in Edison, N.J., for example, it costs about $155 to reserve one bay for a two-hour session during peak hours. And that doesn’t include food or drinks. Topgolf is trying out different ways to lure customers, including variable pricing, tweaks to its promotions and adding concerts and live DJ nights.

Here's the bottom line

Topgolf itself isn’t a lousy business—it is profitable and generated a 15.5% margin on the basis of earnings before interest, taxes, depreciation and amortization last year. Its top line grew at a healthy 27% compound annual growth rate between 2021 and 2023 before the recent slowdown, and it still has a long runway of new locations. (Ed: especially our little B'game location).  It will, however, first need to prove that it can bring customers back after the first handful of visits.

Now, let's chat about those "DJ nights".  I never went to the movie nights at the old driving range during Covid, but I recall they did draw a bit of a crowd to Boringame.  What's the curfew policy these days on the Bayfront?

Do we need some AI at Broadway?

I get it.  It's a complicated intersection.  We've got a lot of traffic coming off 101.  We've got a lot of traffic headed to 101.  We've got three big intersections at Rollins, Carolan and California before cars squeeze into an historic retail district.  We've got Caltrains going in both directions and they stop occasionally on the weekends.  We've got the worst designed roadway in the mid-Peninsula at our new and "improved" California Dr. with a too-tight left turn from B'way to southbound California.  There's pedestrians and a few bikers.  There SamTrans busses and big trucks--really big trucks that carry the cars whose sales fund the city quite well.  Some of the drivers from somewhere else and are staying at our other revenue stream--a half dozen Bayfront hotels.  They get to figure out the maze in real time.

Almost everyone wants a grade separation that is a hundred million bucks or so short and losing ground as inflation grinds on.  All the local politicians want it--and some even get kudos from the press for "advocating" for more money.  I can "advocate" for SpaceX to get to Mars sooner, but that ain't gonna make it happen.

In the meantime, perhaps we could chip away at the easiest annoyance.  Coming into the Broadway district from the 101 off-ramps, it's not uncommon to sit through two or even three cycles of the light to turn left onto Carolan.  You think you are a savvy local and will head down towards the high school as a Caltrain rumbles through.  But no.  The light cycles from yellow to red.  Back to yellow, back to red.  No traffic coming towards you (the gates are down).  No northbound traffic turning left onto B'way (no room at the gates).  So you wait.  Informed sources tell me that it's because two old light controllers are joined at the hip when they should be separate.  No one wants to invest to fix it while we wait for the Big Dig.....

What's it going to take?  OpenAI and an awesome code jockey?  A plea to ChatGPT?  A grizzled old Caltrain electrician coming out of retirement to save the day?  How do we Grok this problem?  At the very minimum, let's not replicate the problem at Oak Grove, please!

Housing Maneuvers - Part 1 Pausing the land grab

We noted that the real action County-wide and State-wide in the Fall election is in the propositions and initiatives since the candidate voting is pretty much a given.  B'game will have a real race or two, but outside our little town there is a lot of fait accompli.  But one controversial move that will not be on the ballot is the County land grab for "affordable housing".  The DJ is noting that the Supes, in their wisdom, have decided to "pause" their land grab.

Despite a poll suggesting majority voter support, San Mateo County will not be placing a measure on November ballots allowing the development of low-income housing units without voter approval, in pursuant of Article 34 of the state Constitution.  The measure, initially presented at a special meeting of the board July 22, would have provided authorization for the county and other public agencies to construct or acquire affordable rental housing for low-income residents — up to 1% of total existing housing units — without voter consideration. 

Although Chief Executive Officer Mike Callagy maintained Article 34 “has no place in this county,” he did not ask the Board of Supervisors to consider approving such a measure placement this election cycle.

One has to wonder what other bits and pieces of the state Constitution have no place in San Mateo County?  Perhaps we could get a list?  The usual blather about "racism in homeownership" and "constituent confusion" and wanting to be "collaborative" with local cities and not "usurp their authority" ensued. The reality is the November ballot is already stuffed with pork.  So much so that voters are likely to Just Say No to the whole lot.  Half Moon Bay and Millbrae led the public charge against this land grab.  Here's hoping B'game electeds did so quietly but firmly.

Building more vacant office space?

Some dots are so obvious to connect that it's child's play.  Take for example all the office building going on up and down the mid-Peninsula.  One wonders what the developers are thinking.  A big dot was publicized last week in Mountain View per the Merc:

MOUNTAIN VIEW — A lender has seized through foreclosure a South Bay tech campus once touted as an “exquisite” property in fresh sign of the economic troubles facing the Bay Area office market.  The office campus, located at 350 and 380 Ellis Street in Mountain View, was seized by an affiliate of KKR Real Estate Finance Trust, which is managed by New York City-based investment behemoth KKR & Co. Inc.

The $120.6 million that KKR invested to buy the tech campus is a jaw-dropping 66% less than the $357.6 million that an alliance of investment behemoth Goldman Sachs and Bay Area real estate firm TMG Partners paid in 2021 to buy the office complex.  The Ellis Street tech campus is now worth just one-third of its value at the time Goldman Sachs and TMG bought the property almost exactly three years ago.

I did business with clients in those buildings for years.  They are nice spaces (probably "Class A" but I'm no expert).  I just know they have a great location compared to many others in Silicon Valley.  And they lost 2/3 of their value in three years. The dot begging to be connected is this building below on Old Bayshore in dear Old B'game.  It's just one of several in progress as materials and labor costs jump and interest rates stay sticky at about 7%.  It will be a nice space as well with a giant parking garage on the left.  But will it be vacant for a while...or longer?  There are more Bayfront spaces lined up for redevelopment--the Hyatt Cinema is looking ready to fall down by itself.  At least the Broadway-California intersection is getting fixed.....wait, what?

Top Golf: Rounding the turn?

I stopped by the Golf Center (aka the old city dump) to check on the progress of the Top Golf project.  My completely uneducated guess is they are about to round the turn.  In golf "the turn" is an expression used to denote the part of the golf course where the front nine turns into the back nine. When you've reached "the turn," you've reached the halfway point of an 18-hole golf course. So "making the turn" means leaving the front nine and moving on to the back nine.  It's been more than five years in the works as noted here.

It's an impressive build and the number of poles surprised me.  One can only hope it generates as much B'game revenue as some city elders are predicting.  The sooner the better!  Here's the view as of now.

Bayfront shenanigans: Where to put the seawall?

Sea level rise.  King tide flood control.  Airliner bird strikes.  A new lagoon with algae and sediment.  50 years of conflicting regulations.  Sinking runways. Shore-based or Bay-based.  Swing a cat--hit an environmental group:  Citizens Committee to Complete the Refuge, the Center for Biological Diversity, Sequoia Audubon Society, Green Foothills, Baykeeper and Sierra Club.  The Daily Journal's Holly Rusch did as good a job as could be done describing the circular firing squad of government agencies, politicians, environmental groups and the OneShoreline county entity that seeks to build a seawall in the Bay from SFO to Coyote Point.  The article didn't note what size budget OneShoreline has to gather public comment and attempt to get a draft EIR out by 2025, but we will $niff that out going forward.  In the meantime, the engineer in me is very curious about this:

The proposed barrier would remain open unless the Bay was hit by extreme storms or king tides, at which point the tidal gates would close to protect from flooding impacts.  One major concern regarding the project is the permitting and legal hurdles it could face when receiving approval due to its unprecedented scale and goals, said Save the Bay Executive Director David Lewis, a point his organization’s letter emphasized.  The “unprecedented” size of Bay fill required for the project, which includes a lagoon that could be as many as 670 acres, could require significant mitigation, BCDC warned in a letter to the agency.

For those keeping track at home, 670 acres is about 29.2 million square feet or exactly two-thirds the size of Golden Gate Park.  What could go wrong?  The County Supe contender (against Jackie Speier) notes:

Millbrae Councilmember Ann Schneider, who has been speaking out against the project since November when she was mayor, reiterated concerns that the community had not been given adequate time or space to provide feedback on the project.  “OneShoreline completely ignored me, me as the mayor of Millbrae, me who has been working on sea-level rise since they created the first vulnerability process,” she said.

I predict a lot of sound and fury ultimately signifying nothing--apologies to the Bard.  Here is our local jewel Coyote Point yesterday as an airliner descends through our December clouds.

"SFO is sinking fast" while expired legislation is reintroduced.

The Comicle front page headline blared out the news SFO’s runways are sinking, new research finds in the on-line version.  The print version (below) was even better.

San Francisco Internation airport is sinking, fast. That’s according to new research, being presented at the American Geophysical Union conference in San Francisco this week.   SFO’s runways are sinking approximately 0.4 inches per year, the fastest among 15 coastal U.S. airports surveyed in new research from Virginia Tech. The research, which utilized submillimeter satellite imagery, found that Los Angeles International Airport’s runways are sinking at roughly 0.1 inches per year, the slowest among the measured locations.

Subsidence, or sinking, can cause cracking and bulging on runways, a major hazard for aircraft while taking off and landing. SFO isn’t vulnerable to this cracking, but as the water level rises in nearby San Francisco Bay, the airport could be at risk in about 40 years, according to lead researcher Oluwaseyi Dasho, an environmental hazard specialist at Virginia Tech.

They don't mention why SFO runways are not vulnerable to cracking.  That would have been helpful since they are mostly landfill to begin with.  For those keeping track at home 0.4 inches per year for 40 years is 16 inches--that's some speed bump at 120 mph or more.  And then there is the "seawall" project.

Airport revenue will pay for the $590 million Shoreline Protection Program, a seawall that will shield the airport from some storm surge and future sea-level rise impacts. Project construction is scheduled to begin in 2025.

We have our very own Hans Brinker effort going on although it would probably be wiser to emulate Tokyo or Denver and just start working on an adjacent airport out in the East Bay--maybe the Silicon Valley investors hoping to build a new city in Solano County could spare a few hundred acres.  Back in real time, our Rep. Kevin Mullin has reintroduced some of the same legislation that Jackie Speier logged as noted here.  The specifics of the two most important pieces are:

Reps. Panetta, Eshoo, Mullin, Cárdenas, and Sherman introduced the following pieces of legislation to ensure quieter skies:

The “Restore Everyone’s Sleep Tonight Act” or the “REST Act” (Panetta)

Legislation which would authorize an airport to impose an access restriction between the hours of 10 p.m. and 7 a.m. for aircraft.

 

Reps. Panetta, Eshoo, and Mullin, all Bay Area members, introduced legislation specifically aimed at addressing issues with San Francisco International Airport (SFO):

The “Serious Noise Reduction Efforts Act” or the “SNORE Act” (Mullin)

Legislation that would address noise mitigation through soundproofing and other strategies in the communities surrounding San Francisco International Airport.

This acknowledgement about the noise from take-offs and landings in the press release shows a good understanding of our current situation

“This legislation requires the FAA to prioritize noise-related health impacts, enables communities to engage with the FAA, establishes standards related to ground-based noise".  We shall see if our local reps can muster any support in Congress.  I applaud the attempt.  Now put some juice behind it in DC.

High-Cost Rail - Part 161 The waste continues unabated

We noted in High-Cost Rail - Part 159 back in March that costs for our own little train-to-nowhere were spiraling out of control.  But would that cause the Fed and the Bidenflation team to reconsider giving more drugs to the addict?  Nope.  Here, have another hit, California--the largest one ever from the Feds.  Apologies to Quicksilver Messenger Service.

This week the Authority blared out the award of another $3.1 Billion of good money to pour after bad.  It will go to

• Fund six electric trains for testing and use
• Fund design of train facilities
• Fund design and construction of the Fresno station
• Fund final design and early works, including right-of-way acquisition and utility relocation on the extensions to Merced to Bakersfield
• Fund construction in the Central Valley

You read that right.  Fifteen years into this boondoggle, they are still acquiring right-of-way down near Merced.  That is reason #25 why costs are spiraling out of control.

Closer to home, a former mayor of Brisbane is defending his tiny town (pop. 4,850) regarding meeting the outrageous RHNA scam foisted on them by the state--1,588 units over the next eight years.  They are trying; even though doubling the size of their burg in eight years is ridiculous and likely to create numerous Unintended Consequences but are still being criticized in the Comicle.  Here is the response:

The city of Brisbane has worked well with the Baylands project developer, especially since the passage of the General Plan Amendment in 2018. 

Environmental impact reports are being prepared by a hired firm, not the city’s staff. The firm cannot complete its analysis until it has all the necessary information on the ongoing toxic remediation, the source and transmission route of the required water supply and the resolution of a conflict with the California High-Speed Rail Authority.

The real story is how the rail authority is undermining the Baylands project. The city and the developer have sued to persuade the authority to change the proposed configuration of a railyard maintenance facility at the site, which makes the Baylands plan financially unfeasible. 

The proposed railyard and maintenance facility requires a substantial proportion of the land area east of the Caltrain track. The developer’s plan for the west side of the Baylands is negatively impacted by a long flyover elevated track proposed by the authority to get southbound trains over to the railyard and maintenance facility.

It’s the state that needs to get its act together, not the city.

Raymond Miller, former mayor, Brisbane

Even towns that are trying to comply and "do their fair share" get chastised.  That is the nature of the beast and "it can't be bargained with, it can't be reasoned with, it doesn't feel pity or remorse or fear, and it absolutely will not stop".  Apologies to Kyle Reese (The Terminator).  Sometimes it seems like the California taxpayer is Linda Hamilton.  A regular reader sent this along

Fighting with firefighters

As one of the two or three most critical public services in town, the Fire Department merits our attention when things aren't going well--or at least don't appear to be going well--internally.  The Daily Journal above-the-fold headline 'No confidence' in Central County Fire Chief Bruce Barron certainly caught my eye.  I had been thinking about the Fire Department before this piece since there was an earlier piece about the condition of several stations and the admin building on Rollins Rd.  If you recall my fantasy post about keeping the horses in front of the carts regarding East side development of "thousands of new homes" here, I meant to include the idea of a new fire station somewhere on that side of the railroad tracks in the fantasy.  The DJ noted a report about the need a couple weeks ago

A consultant for the Central County Fire Department Chief wants to reopen station 36 on the eastside of Burlingame as the city plans for commercial and residential development, and concerns are growing over a staffing shortage that could eventually affect service.

Both Millbrae and Burlingame have planned to redevelop Rollins Road and the eastside into a mixed-use neighborhood, providing thousands of homes and commercial development but the rapid growth concerns Fire Chief Bruce Barron, who told the City Council of the recommendation to reopen station 36, which is being used as an administration building, during a meeting Wednesday, July 5.

It's hard to argue with the conclusion when you see the amount of over-development going on.  Now in the midst of this comes the firefighter union's lopsided vote of 'no confidence' in the chief

In June, 85% of the Teamsters 856 Central County Firefighters Union members voted no confidence in Barron’s ability to lead, asking for his immediate removal. The notice was delivered to Lisa Goldman, Burlingame’s city manager and the Central County Fire Department’s chief administrative officer. Shortly after, Barron announced his retirement in October. He has been chief since 2019. But the union members are saying it’s not good enough and want him out immediately.

Aside from the personnel issues now being aired in public, some of this has to do with the move to three-on-a-truck that happened more than a decade ago.  I had a front row seat to that move since my wife was in office and on the contract negotiating team at the time.  Memory is a little foggy now, but I seem to recall it wasn't as cut-and-dry as this note postulates.

The department staffs only three firefighters per fire engine when the National Fire Protection Association recommends four person staffing per engine as the standard practice, according to a presentation facilitated by Barron to the Burlingame City Council in July.

If you spend any time around town, you have seen the impact of the dual roles CCFD have when it comes to emergency medical care for what are now called "mental health crises".  You see the truck, the three firefighters, typically a police car and eventually an ambulance.  That is the three-is-enough scenario, unlike the full-blown fires when four-is-way-better kicks in.

The issue is whether this is a temporary tempest-in-a-teapot that will be resolved either way by October?  In my managerial experience, some people get wound up when their "open and honest" input is met with similarly open and direct responses.  As you can read in the articles, the next chief will have a lot on their operational and strategic planning/financing plate so the sooner we get on with it the better.

Cellblock 6 is almost done

I was driving down Rollins Rd. south of Broadway with a friend who remembers the Velvet Turtle days and the arrival and departure six years later of Fattoria e Mare restaurant after that.  As we approached the new building he said, "It looks like a prison".  And so it does.  I hope they didn't spend to much on architects for Cellblock 6.

This is the view from the bike trail along the channel at Bayside Park.  Doesn't feel like B'game does it.