During one of his first visits to Augusta, Georgia, British-born golfer Paul Casey found himself far from the red and pink azaleas and manicured fairways of Augusta National Golf Club.
Driving the streets in his white Cadillac outside the pristine greens, Casey would pass by strip malls, pawn shops, neighborhoods with dilapidated houses and other sights of a city the TV cameras never show. “I was shocked,” Casey said in an interview. “It’s not all the well-to-do, the big mansions and the old money.”
As the home of 81-year-old Augusta National and this week’s annual Masters Tournament, the city of Augusta represents a contrast of economies as wealthy golf fans flock to a place that is the birthplace of both soul singer James Brown and former Federal Reserve Chairman Ben S. Bernanke.
The tournament’s 30,000 daily attendees typically include top executives from the world’s largest companies such as sponsors IBM Corp. (IBM:US) and Daimler-Benz AG’s Mercedes-Benz. Michael Jordan, Julius Erving and Andy Roddick are among the sports celebrities that have watched golfers like Tiger Woods and Phil Mickelson don the winner’s green jacket. The price for a single ticket for the four days of competition averaged $4,007 last week on TiqIq, a secondary market ticket aggregator.
While Masters fans provide a temporary boost to restaurants, hotels and Augusta residents who rent their homes to golfers, tournament attendees and golf industry executives for as much as $10,000 a week, the city’s economy continues to lag behind the state and U.S. before and after golf’s first Grand Slam event of the year.
The club in February donated $6 million to help fund the creation of a cancer facility and children’s camp at a local university and is helping the city fund a road improvement project around the club.
“We’ve always been interested in the success of the community at large,” club Chairman Billy Payne said in a press conference today. “We are exceedingly grateful that we can hold this world-class event here in Augusta, Georgia.”
Augusta-Richmond County’s median household income of about $34,864 trails Georgia’s $49,604 by 30 percent, according to estimates by the U.S. Census Bureau. The U.S. median household income between the same 2008-12 period was $53,000. Almost 27 percent of all people in the Augusta region live below the poverty level, compared with 17 percent for Georgia and 15 percent for the U.S., according to the 2012 Census estimate. The city-county population of 198,000 grew 1 percent between 2010 and 2012, the census bureau reports, compared with 2.4 percent for Georgia and 1.7 percent for the U.S.
“Augusta’s economy has not performed well, even compared to Georgia,” said Rajeev Dwahan, director of the economic forecasting center at Georgia State University in Atlanta. “There has been practically no job growth in the past year.”
For many city residents who are looking for full-time work, the Masters doesn’t have much of an effect other than clogging the 1.2-mile stretch of Washington Road leading from Interstate 20 to the club’s Magnolia Lane entrance.
“It is tough to find a job,” said Christopher Burke, 32, whose job maintaining industrial equipment was eliminated by Austin Industrial last August when work slowed; he hasn’t found work other than a seasonal job delivering packages at Christmastime. While the city has a small-town atmosphere, a lack of growth has meant opportunities are tough to find, he said.
Burke, who was looking for a job at the state labor department’s unemployment office in Augusta, said he has never been to the Masters.
“What is the big deal of watching a bunch of rich folks play golf?” he said. “It has no interest to me. The rich stay rich, and the poor stay poor.”
As Augusta’s mayor since 2005, Deke Copenhaver said the city has long battled the contrast of the club’s image to city’s downtown, which is dotted with boarded-up storefronts and strip clubs.
“We’ve still got work to do,” Copenhaver said. “There is no city that is pristine everywhere you look. Yes, there are certain folks who think our entire city looks like the (Augusta) National. That’s wonderful that they would think that.”
In addition to the Masters, Augusta is home to several less-famous sporting events. The city hosted the 2011 and 2012 USA Cycling Road National Championships, is home to the annual Augusta Southern Nationals, the world’s richest drag boat race held on the Savannah River every July, and the Augusta 70.3 Ironman in September, the world’s largest half Ironman triathlon.
Over the past two years, sports events other than the Masters have contributed $43 million in direct visitor spending to the city of Augusta, according to the Augusta Sports Council. Augusta National doesn’t release economic impact data on the Masters tournament and the sports council says it hasn’t researched it.
“We know how to host events,” Copenhaver said. “We’re the only U.S. city that hosts a major tournament every year.”
Augusta National was founded by Atlanta native Bobby Jones, a golfer who so dominated the sport in the 1920s that he had two tickertape parades in his honor in New York, and Wall Street banker Clifford Roberts. The city was chosen because its mild weather allowed for golf in the winter, and the site, the former Fruitland Nursery, had hills, natural springs and a lake. Its membership rolls now include Bill Gates and Warren Buffett, who together are worth $143.8 billion, according to the Bloomberg Billionaires Index.
The Masters started in 1934 as the Augusta National Invitation Tournament as an effort to call attention to the new course. Jones, then 32, came out of retirement to play and finished 10 strokes behind winner Horton Smith.
More golf courses closed than opened in the U.S. in 2013 for the eighth straight year, according to the National Golf Foundation. A total of 14 18-hole courses opened last year, up from 13.5 in 2012, while 157.5 courses were closed during the year, three more than a year earlier, the Jupiter, Florida-based organization said. It counts every nine holes as half of a course. Since 2006, course closings have outnumbered openings after more than 4,500 courses had opened over the previous 15 years. Those courses, many of which were built as part of real estate projects, shut down as the U.S. recession led to a reduction in home sales needed to support the courses.
Most of today’s visitors to the Masters tournament spend their time inside the club’s green gates, snacking on traditional pimento-cheese sandwiches, or in corporate hospitality houses just outside. Those who go to downtown Augusta see the contrast firsthand.
“There’s a hard side to it,” said Casey, who has made eight appearances in the tournament. “But every town has a hard side or a darker underbelly. It just so happens, in Augusta, it’s very close to the golf course.”
Casey first played in the Masters in 2003. There has been scant improvement in the region’s economy in the past decade based on a comparison of census data between 2012 and 2000, when 18 percent of all families in the city/county area lived below the poverty level. The Augusta region’s median household income was 28 percent below the state’s in the 2000 Census.
Augusta had total debt of $698 million at the end of 2012 and its bonds were rated Aa2 by Moody’s and AA by Fitch.
Along with shops filled with Masters-related memorabilia, downtown Augusta’s Broad Street is lined with empty stores and strip clubs, such as the windowless Discotheque Lounge, with an entrance surrounded by a mural of human-sized martini glasses painted over whitewashed walls. The club is across the street from the Downtown Pawn Shop and Sidney’s Department Store, which advertises “GUNS AND AMMO” in its windows.
City leaders have a vision for transforming the center city area and created a Downtown Development Authority to recruit new retail businesses to the riverfront. In a partnership with local universities, the city is embarking on a plan to develop the city’s “urban core” to bring more residents and businesses to the area in coming years.
“In Augusta, change does not come quickly,” Copenhaver said. “We’ve been pushing the boulder up the hill for a long time, but I think we are finally close to going down the other side.”
While the city is far from its boom time in the 19th century when it was the second biggest inland cotton market in the world, there are signs of improvement.
O’Donovans, an Irish-themed pub, recently opened on the corner of 10th and Broad Streets. Sprint Food Stores Inc. is building a two-story, 11,000 square-foot “open market” convenience store on Broad Street with indoor and patio seating.
Copenhaver also points to a 180,000-square-foot $172 million Starbucks Corp. (SBUX:US) factory which opened in October on the city’s south side. Cabela’s Inc. (CAB:US), a Sidney, Nebraska-based hunting and fishing-focused retailer, opened a 42,000-square-foot store on March 20, the company’s first in Georgia.
Starbucks picked Augusta partly because of its workforce, access to transportation and proximity to advanced technology support and the eastern seaboard, according to company spokesman Zack Hutson.
“These leading retailers should be viewed as leading indicators,” Copenhaver said. “They’re not going to invest money building these facilities in places where they’re not going to make money.”
For downtown businesses, like O’Donovan’s, the city could do more, said Elaine D’Arcy, who spent 16 years in Dublin, Ireland, and sold her home in Florida to open the pub.
“I’m sort of disappointed,” D’Arcy said in an interview as about 20 people had lunch around her in her pub. “I’m hoping it’s going to get better.”
The mayor said it can be challenging for downtown businesses to thrive without residential support. “It’s sometimes difficult to get local investors to realize the potential our downtown really has,” Copenhaver said. “We should have a lot more residents downtown to help feed those businesses. You need more people and you need more venues creating that pedestrian activity downtown.”
The area’s largest employers include Fort Gordon, a U.S. Army installation, and the Savannah River Plant, which processes and stores nuclear materials and employs 10,000 people. Georgia Regents University, home of the Medical College of Georgia, employs about 6,000. The Army recently announced plans to open its new Cyber Command headquarters at Fort Gordon, a project that will add 2,600 military, 900 civilian and 200 contractor jobs to the Army post by 2019, Copenhaver said.
“It’s going to be a transformational moment for the city,” he said.
Dwahan, the Georgia State University economist, forecasts Augusta employment will increase 1 percent in 2014, compared with a 2.1 percent growth for Georgia and 2.4 percent for the Atlanta area. The jobless rate for the city was 8 percent in February, compared with 7.1 percent for the state. Unemployment for the Augusta metro area was 6.7 percent for the month, even with the U.S. rate.
“Augusta is heavily dependent on state and local as well as federal government spending, which has also been a severe handicap in the past several years as fiscal conditions have generally tightened,” said Arijit Dutta, senior economist for Moody’s Analytics Inc. in West Chester, Pennsylvania.
Augusta’s housing market continues to struggle. Single-family housing starts dropped 40 percent from 2006 to 2012, according to Moody’s Analytics. The metro area ranked among the bottom 10 percent in the U.S. in price gains last year, with a decline of 1.3 percent, according to the Federal Housing Finance Agency.
Zeb Ailstock, 28, started a homebuilding company with a partner in 2006, then closed the eight-employee business three years later as prices plummeted.
“The housing market went down very quick,” said Ailstock, who now works as a carpenter. “It got to be kind of a burden. Prices were too low for anyone to work. We had to seek work elsewhere.”
Augusta’s housing market has also been hurt by “demographic characteristics and prospects that are weaker” than Georgia, where Atlanta and coastal cities are drawing people from other states, Dutta said.
Some younger people are leaving because they can’t find work.
“There are not a lot of jobs out there,” said Kertray Mangual, 37, of Augusta, who enrolled at a community college to become a paralegal and may move to Atlanta. His 18-year-old son Demerea, the oldest of six children, is studying in St. Paul, Minnesota, and probably won’t come back to Augusta, he said.
“They will leave,” he said. “They are ready to leave now. They want to go anywhere but here. They see what the job market is and the economy here. There is not a lot of opportunity here.”
Mangual said he’s never attended the Masters and doesn’t think the tournament helps most people in the area.
“There is an influx of people and an influx of money for a week or two,” he said. “They have a few temporary jobs for a week and then they are gone and we are back to the same grind.”
To contact the reporters on this story: Michael Buteau in Atlanta at firstname.lastname@example.org; Steve Matthews in Atlanta at email@example.com
To contact the editors responsible for this story: Michael Sillup at firstname.lastname@example.org Anita Sharpe, Rob Gloster