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Andrew Cunningham

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What's an average fee for a golf course architect?
« on: June 18, 2005, 10:13:55 PM »
I was wondering what a licensed (I think they are licensed??) golf course architect would earn on an average project.  Does anyone know?  Stupid question given this site's membership, but I wonder what the range is between say a rookie and Tom Fazio.  Better yet, would the likes of Coore & Crenshaw and Tom Doak rake in the mega dollars of Pete Dye and aforementioned Fazio?  

I don't expect to receive exact figures (if any architects actually reply), but it would be interesting to understand what percentage of a total project’s cost – just the course that is – can be attributed to the architect.  On the professional golfer/architect side who would be the most expensive: Greg Norman or Jack Nicklaus?  And frankly, who’s better?  Do mega dollar architects necessarily guarantee you a great design?  Probably not, but I know when I spend $300 a night for a hotel room it is most likely to be superior to the $50 a night variety.

I assume when architects bid on a job they must submit at least a basic routing plan – please expound if qualified.  If this is correct, can or should the developer judge the submission based on the price vs. quality of the plan or is it just a gut feeling?  Or some combination of the two?  That said, how price competitive are golf course architects?  What margin do they expect for each project?  Can they really afford to get into bidding wars?

And lastly, are design associates and other staff strictly subcontractors who can leave at their will and who are hired/fired as the job(s) dictate?  Just curious.

Tom_Doak

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Re:What's an average fee for a golf course architect?
« Reply #1 on: June 18, 2005, 10:39:41 PM »
Andrew:

Depends on what you mean by "average".

The highest fee is $2 million per course.  The lowest is one dollar.  

I've never seen an official figure, but I would guess the median ASGCA member charges somewhere around $200K or $250K per course ... if the client pays in full.

As for me, all I will say is that I can charge a lot more now than I did five years ago, but I think I'm still well short of Tom Fazio's design fee ... my name doesn't sell real estate or memberships the way his does.

Now these are "design fees".  Don't forget to deduct all the expenses of running an office and paying associates and so forth.  A one-man operation is rare in this business, and most of them would not be able to charge nearly as much as the established firms.
« Last Edit: June 18, 2005, 10:41:32 PM by Tom_Doak »

Jeff_Brauer

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Re:What's an average fee for a golf course architect?
« Reply #2 on: June 18, 2005, 11:36:29 PM »
Andrew,

Fees of course, are all over the ballpark. The most recent Golf Inc. Magazine had its annual survey of the gca profession.  I was surprised to see how high each of the various architects were in quoting their fees, given the recent recession and my experience that competitors are really slashing fees.

Of course, the old saying "First Liar Doesn't Have a Chance" may not have been invented to describe golf architects self reporting of fees or numbers of projects, but it does apply!

Decades ago, the ASGCA (and most other professional socieities) had a minimum fee chart.  This is long since abandoned on the basis of price fixing.  However, in most design professions, a profit can be made at anywhere from 6-10% of design fee.  Given that new courses cost about $4Million, that should put most gca fees at $240K to 400K.  Big names charge more (or if Pete Dye, $1 for certain public courses)  Certain beginners may cut fees to a range of 3-4%.  Also, add ons and bigger budgets usually go for smaller amounts, percentage wise.

The percent is just a guide.  Most of us negotiate a lump sum, since a percentage may encourage us to "Gold Plate" the cart paths, knowing our fee will go up, while it doesn't take any longer to lay out any cart path, gold plated or not.  In other cases, the percent arrangement as a base works pretty well - if I am designing $500K of landscaping I don't normally do, then the extra $15-50 K comes in handy in covering my costs.

Even the big boys are probably in this range - at least for architectural services.  Placing a full time field rep is usually above that design percentage, and can easily also translate into 5-7% of construction costs.  And, the big boys usually require that they have a man on site full time.  So, of a million dollar design fee, about $400K may go to traditional design services, another $400 K to full time site reps, and the last $200K might be attributed to marketing pizazz, but its all rolled into one fee.

As Tom notes, a fee is not all profit.  A while back, I posted about how $32K per year apprentice architects bill out for about $75 an hour, about 5 times their nominal $16 per hour paycheck.  I won't type it again, but rent, utilities, marketing costs, errors and omissions, workmans comp, general liability, other employee benefits, etc, etc, etc. all contribute to the overhead of a design business.  As head of my own company, I have traditionally taken home about 15-20% of the total revenue in most years.  

Competing for jobs is a variable process as well.  Many owners expect that you will provide a routing, and some will actually pay a few architects to do one, knowing they will get a better effort if they at least cover expenses.  Others select only on qualification. Most cities don't negotiate on fee, and are happy if their selected architect falls in the ranges above.

That said, I will bet most fees are set by assuming what the competition might do.  As one gca told me, you get what you can get!  I usually run through the fee proposal based on percentages as above, a fee that would reflect the kind of money I should ideally be making, a few estimate of hours times hourly rate with overhead and profit that is high profit, low  profit and medium profit, and what the competition would do. I usually select one of the middle options, as I have found I can't often get the "dream fee."  Especially in the last few years, everyone seemingly scaled back fees to get jobs.

I suspect most architects have full time employees, who they try hard to keep employed through thick and thin - but not very thin!  As in any business, its tough to train someone and then find them gone, so we don't fire unless we really, really, have to.  (But, I have had too!)

In the good times of the late 90's, I always ran my office a "half man" long, to be sure I could provide timely service.  Now, I am running a half man short, and have used several sources on occaision to fill in as contract labor.  The layoffs in the industry have certainly produced some independent drafting contractors and I am sure others look at it the same way I do.  However, the IRS takes a dim view of contract laborers in general, and if they work anywhere near full time, they can cause tax problems.  Plus, I worry that they won't be there when I need them.

I do contract out some of my office stuff to my accountant, figuring why not leave that to professionals, and having had a chance to get better on may computer programs, and a bad run of secretaries, the office manager was the first posittion to go. Having said all that, I am in the office on a Saturday night processing my own invoices for the month.  I don't want to work fathers day, and the Rangers are playing just down the street - I need to wait until the crowd goes home to miss traffic.

Hope that answers your questions.

Jeff Brauer, ASGCA Director of Outreach

Mark_F

Re:What's an average fee for a golf course architect?
« Reply #3 on: June 19, 2005, 02:03:52 AM »
Tom Doak,

I find it interesting that you might be well short of Fazio's fee because your name doesn't sell memberships or real estate.

What about a project like Cape Kidnappers?  Presumably the owner chose you because he thought you were the best person (s) for the job, so why shouldn't you get what the going rate for the best is?

Especially since Fazio doesn't like to travel?

Andrew Cunningham

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Re:What's an average fee for a golf course architect?
« Reply #4 on: June 19, 2005, 07:23:26 AM »
Jeff and Tom,

Thanks for the detailed info!  Just curious but I hope to someday put a plan together for an awesome (in my layman's opinion) piece of property just down the road from me.  As you guys indicated it's unfortunate that GCA’s frankly net as little as they do at year's end, especially if you added up all the hours you put in over the course of a year.  Thanks again!

Tom_Doak

  • Total Karma: 5
Re:What's an average fee for a golf course architect?
« Reply #5 on: June 19, 2005, 08:02:39 AM »
Mark:

There are probably some jobs where I could get as much as Fazio or Nicklaus to design a course, because the client really wants me.  But I think there is an assumption in the business that some portion of their fees is attributable to marketing costs for real estate, rather than for golf course architecture.

Cape Kidnappers was a golf resort with no housing component, so I doubt Mr. Robertson would have wanted to pay a $1.5 million fee for us to watch a $5 million construction project.  [If he did, then I left a LOT of money on the table.]

On the other hand, I am starting to see the bigger picture ... when you get to the point that the golf course is the marketing centerpiece of the development, you can start to look at the TOTAL cost of the project.  Sebonack is maybe a $6 million golf course construction budget, but it's a $70 million project and the key to its success is the quality of the golf course, which is why Michael Pascucci can justify paying two architects' fees.

Jeff is right, too ... your fees are determined by your perception of the market at the time.  I'd be more likely to get a higher fee if I was competing with Nicklaus and Fazio for a job.  But they put their fees as high as they do, to reinforce the image that they are the best in the business.

Mike_Young

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Re:What's an average fee for a golf course architect?
« Reply #6 on: June 19, 2005, 08:20:30 AM »
I think Jeff is correct when he speaks of the fees that were published in Golf Inc last week.  Take them with a grain of salt.  I have seen a couple of National names that have submitted at $120,000 on a municipal job just to get the job.  However, after much thought I will let you know that my fee is 2 million but in certain cases I have discounted in order to simplify the process.
"just standing on a corner in Winslow Arizona"

Jeff_Brauer

  • Total Karma: 1
Re:What's an average fee for a golf course architect?
« Reply #7 on: June 19, 2005, 10:19:54 AM »
Mike,

LOL!  Pete Dye has often quoted his fee as "$1 more than the next highest bid, whatever that is" so he can say that if he lost a job, it was because the other guys low balled the fee! My fee is actually $3 Million, but I allow special 90% discounts if the contract is signed on any day that ends in Y.   ;)

I know of a national name that submitted a fee of $90,000 to get a renovation project.   Sometimes, the big firms do that when they are trying to keep their 1990's level staffs around. I doubt they phrase it that way to the client. They probably say "I love your land and project so much that I am discounting for the love of the game" or something similar!  The Nicklaus organization and a few others have variable fee schemes to access different parts of the gca market, depending on how much of a signature involement you want.

Those fees Golf Inc. fees might be inflated and still be true - if counting sub consultants like environmentalists and irrigation designers, travel expenses (which are usually outside the fees quoted above) full or part time field reps, legitimate redo fees when the design must be partially or entirely redone for reasons beyond the designers control. Its also possible to throw in services - like PR help, grow in agronomy consultants, three years of consulting visits, etc. etc. etc. to give the owner value, and keep your fee appearing higher than it may really be.  I think a lot of gca types favor this type of thing in negotiations.
Jeff Brauer, ASGCA Director of Outreach

Bill Gayne

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Re:What's an average fee for a golf course architect?
« Reply #8 on: June 19, 2005, 01:13:26 PM »
Hopefully this question isn't too far from the topic of this thread. I've been involved in a couple of large building projects and when the building is completed there are always a couple of items that don't work as hoped. The contractors often point the fingers at the architects for poor design and the architects point the fingers at the contractors for faulty work. Do these types of disputes occur on golf course projects and how are they resolved? Do most of the contracts have a guaranteed maximum price (GMP)?
« Last Edit: June 19, 2005, 03:04:32 PM by Bill Gayne »

Jeff_Brauer

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Re:What's an average fee for a golf course architect?
« Reply #9 on: June 19, 2005, 01:27:09 PM »
Bill,

The process is similar in all construction. In fact, many (but not all) golf course construction projects use AIA forms as an agreement, so use the exact same change order process.

We have an additional clause in our our specs and bid form requiring the bidder to notify us of any descrepancies or forever hold their peace. Some contractors ignore this, saying they only found the problems after the bid, and its both possible that it happens, and impossible to prove otherwise.

Things are settled, according to most contracts by getting the gca's opinion. If either the Owner or Contractor disagree, they have agreed to mediation, then arbitration in some contracts. In others, lawsuits are the norm.

I recall working in Indonesia a decade ago and was stunned to see lawyers on the design teams.  The contractors and owners lawyers submitted lawsuits to each other in the first meeting!  It was their official method of keeping track of change orders and the like, but we simply negotiate here, usually.  A few owners - and even contractors - can become litigious, but most problems are worked out more peacefully.

In general, but not always, construction contracts, especially those for golf, which involves working over several acres of land, compared to a building, which increases the possibility for unknown conditions, seem to be getting more oriented to an open end final price than was typical when I entered the business. In those days, the contractors took the risk for everything, and sometimes, still do.  Of course, that just drives up the bid price, and most owners now favor a bit of uncertainty in pricing, and keep a contingency, vs. gettinga totally firm price (if there is such a thing) that is probably higher than any possible change order for unknown conditions.

I hope that makes sense.
Jeff Brauer, ASGCA Director of Outreach

Bill Gayne

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Re:What's an average fee for a golf course architect?
« Reply #10 on: June 19, 2005, 03:03:45 PM »
Jeff,

Thanks for the reply. It makes perfect sense.

Bill

Forrest Richardson

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Re:What's an average fee for a golf course architect?
« Reply #11 on: June 19, 2005, 11:52:33 PM »
It has taken the usual 20 minute to read Jeff's post — I assume he is writing a book!

Our fees for remodeling have been about $75,000 to $150,000 — for new courses not beyond $350,000.

A lot depends on whether we subcontract irrigation, lakes, engineering and other consultants, such as agronomic, etc.  It can become really complicated — unfortunately.

I prefer straight-forward clients with handshakes and checkbooks — not accountants and lawyers. The best projects are those which exist on trust and a fair fee.

I will "guess" that an average fee is probably $200,000 for 18-holes, new design — from scratch.
« Last Edit: June 19, 2005, 11:53:35 PM by Forrest Richardson »
— Forrest Richardson, Golf Course Architect/ASGCA
    www.golfgroupltd.com
    www.golframes.com

Mike Nuzzo

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Re:What's an average fee for a golf course architect?
« Reply #12 on: June 20, 2005, 12:44:00 PM »
Do mega dollar architects necessarily guarantee you a great design?  Probably not, but I know when I spend $300 a night for a hotel room it is most likely to be superior to the $50 a night variety.

From my experience I'll answer a resounding no.
Although the conditioning is often substantially different.  With double and triple maint. budgets.  Sodding and extensive plantings add substantially.

I've learned of lots of different fee structures.  They seem to go all over the board.  And I've heard of much higer fees than $2MM, but those are the oversea signature fees.

My concern is the low end.
I've been operating under the assumption I could provide better work and a lower fee than anyone could compete with.

Lately through discussions I've learned of some very low fees out there today.
While I believe I can still provide a better product, I'm just not so sure if it would be lower.
I'd been working up numbers around 2-3% - I'd hate to compete against someone with a 1% fee.
And that is including currently giving away routing plans, design ideas and post construction sketches.

What are some of the low fees out there currently?
Feel free to IM me personally...

Cheers
Thinking of Bob, Rihc, Bill, George, Neil, Dr. Childs, & Tiger.

Forrest Richardson

  • Total Karma: 0
Re:What's an average fee for a golf course architect?
« Reply #13 on: June 20, 2005, 01:49:32 PM »
One important thought:

When someone undertakes the creation of a golf course it usually means financing and ultimately spending several million dollars — let's say somewhere between $3 million and $15 million (a big spectrum, I realize.)

But regardless of the cost of the golf course — it will almost always eclipse the design fee. For an owner to be too concerned about the cost of the design fee is a warning sign...the concern should be to engage someone who they can get along with and will do a good job.

A $300,000 fee for the golf architect adds only a few dollars to the green fee and just a few cents to the membership. And, if a good architect, he or she wil save plenty on construction and long term maintenance, not to mention creating a exciting course that will attract play and a degree of fame.
« Last Edit: June 20, 2005, 01:50:54 PM by Forrest Richardson »
— Forrest Richardson, Golf Course Architect/ASGCA
    www.golfgroupltd.com
    www.golframes.com