Top Golf going forward with two new high-tech driving range venues in San Diego

Trendy golf entertainment outfit Topgolf is pushing ahead with plans to build two new high-tech driving range venues in San Diego — one on waterfront land across from San Diego International Airport and a second at an existing driving range in Sorrento Valley.

The company, an arm of what was formerly Callaway Golf, officially announced the two proposed projects on Thursday — though Topgolf’s efforts to expand into San Diego have been widely reported previously by the Union-Tribune.

The best-known proposal calls for a 68,000-square-foot, three-level driving range on East Harbor Island. The Port of San Diego, which controls the land, gave informal support for the development in July. That kicked off real estate negotiations over the 8.5-acre site that’s currently a parking lot for rental cars. But additional land-use hurdles remain, including an environmental review and permitting.

Less known is Topgolf’s efforts to redevelop the Sorrento Canyon Golf Center, a traditional driving range on an 18-acre parcel along Carroll Canyon Road. Topgolf seeks to replace the aging facility with a new three-level, 57,000-square-foot venue equipped with its latest technology and more than 80 hitting bays. The land-use application for the project is under review, according to the San Diego Planning Department.

“We’ve wanted to bring the Topgolf venue experience to San Diego for a long time, and it’s encouraging to see us making progress toward that goal,” said Topgolf Chief Development Officer Chris Callaway. “While still in the early stages, we’re excited by the potential to bring even more play to the San Diego community.”

In March 2021, Dallas-based Topgolf International was acquired by Callaway Golf of Carlsbad in a deal valued at $3 billion. Shortly afterward, Callaway changed its name to Topgolf Callaway Brands.

The move highlights the importance of Topgolf to Callaway’s “modern golf” strategy to attract younger, more diverse players to the game.

It also changed Callaway’s financial foundation. In the third quarter, Topgolf venues accounted for $414 million of the company’s overall revenue. That beat golf clubs and balls—$297 million —and Callaway’s apparel brands such as TravisMathew and OGIO — $278 million. Topgolf same-store sales rose 11 percent in the quarter.

“Topgolf is growing exponentially and continues to bring modern golf to cities across the country and the globe,” said Chip Brewer, chief executive of Topgolf Callaway Brands. “The San Diego area has been the proud home of Topgolf Callaway Brands for more than 40 years, and we’re thrilled Topgolf is coming to the neighborhood.”

Topgolf is a mash-up of a golf driving range, video arcade and restaurant/sports bar. Players score points hitting balls from bays equipped with the company’s Toptracer ball-tracking technology, which measures distance, height, speed and other variables. Players compete against others in their group or across the venue.

The company opened new Topgolf locations in Knoxville, Tenn. and Renton, Wash. during the third quarter, as well as one international franchise venue in Thailand. It expects to open six more before year end, bringing its total company-owned facilities to 81.

“And we have a clear road map for the growth ahead of us, as we plan to successfully open 11 new venues a year,” said Brewer in a recent conference call with analysts.

Timing for the San Diego facilities remains uncertain. Efforts to reach Topgolf Callaway Brands headquarters were unsuccessful, and Topgolf officials declined further comment. The landowner for the Sorrento Canyon Golf Center was unavailable.

But it could be a while for construction to begin --- at least at the East Harbor Island location. Real estate talks with the Port are ongoing, but any development would require additional regulatory scrutiny that likely would take more than a .year.

“The timeline is dependent on various approvals by the Port of San Diego Board of Port Commissioners, real estate negotiations, environmental review, drafting and issuing a Coastal Development Permit,” said Port Spokesperson Brianne Mundy Page.

Topgolf Callaway Brands shares ended trading Thursday up nearly 7 percent at $20.04 on an overall strong day for stocks on a better-than-expected inflation report.