To Build and Maintain = How Much $$$?

[Steve_Roths]

Not sure how to title this thread.  But, I have a friend who "found" a great piece of land and is starting to think about building a course but has no clue of the costs it would take.  Other than just saying a couple of million, I am trying to drill down into what some of the cost would be to build a course.  Here is what I am thinking and if anyone could correct me please do.

Cost of the land:  (since this is already set by my friend let's just
                          ballpark it at $500,000 for 400 acres)
Architect:         $500k to $2million
Building Cost:   $3 to 5million (this is a non sand site but with little
                       Goverment interference)

Irrigation:        This one I have no clue on.
Maintence:       18 hole course that will only be open 125 days
                      -6 to 12 people ?
                      -Fertilizer
                      -Equipment

Clubhouse:       This is going to have to include some upstairs rooms,
                      restaurant, pro shop, etc.
                     -$3 million?

My other question is how much water do you need on a daily basis to keep the course playing firm and fast (ie Sand Hills type condition).

Okay, I think is probably pretty vague, but hopefully this enough to get this started.  

[Ryan DeMay]

For irrigation you can generally count on $1000 per head installed (this includes pump station, piping, wires/decoders/satellites, computer, etc.).  The most basic irrigation systems for an 18 hole course with irrigated greens, tees and fairways, would have approximately 300 heads.  On the other end of the spectrum wall-to-wall irrigation on an 18 hole course can have 1,500 heads or more.  There are a multitude of factors and options when it comes to irrigating the golf course; the bottom line is do research, talk to people in the industry, be well informed about your distributor and hire an irrigation consultant.  

Other added costs in regards to irrigation include drilling enough wells to replenish your water supply and perhaps special treatment options if your water quality is poor.

With regards to how much water is required to maintain firm and fast conditions, the answer will vary from person to person.  Generally speaking, 100,000 gallons or less per night would be a good estimate  (again this depends on several factors).  

Maintenance budgets will vary based on the culture and expectations of those paying the bills.  Based on the number of employees you suggested (12) I would say $400,000 or more per year.  

I cannot stress enough that these figures may be way off as they apply to your friend's situation.  With more background information I could provide better estimates, however there are too many varibles.

[RJ_Daley]

How about this...?  What market is this in?  125 days?  That ain't very many to make a lot of hay to pay for anything!  How many courses in the area?  How much green fees would the market bare, if there were enough golfers to go around?  Whose your competition?

NO offense, but your inquiry list o'costs looks like a formula for every failed course I ever heard of.  It looks like the begining of every dairy farmer's dream budget to get out from under the cows udders day after day.

[Steve_Roths]

The land is out in Wyoming.  I will find out exactly.  I believe the idea is to make it public course with some overnight lodging.  I believe the 125 days has to do with shorter season of half of May through half of October.  I don't believe there is any other competition around.

How many days per year is Sand Hills open?  Would the Sand Hills model work as a public course?  Small clubhouse, simple cottages, and just pure golf for say 40 golfers a day.

[RJ_Daley]

say $100 a round (not too many places in Wyoming get that for a round of golf) X 40golfers a day X 125 days (in a year it doesn't rain or snow and every day is a perfect day for golf) = $500K

or

$5000 a year dues X 200 members (because it is so good everyone will want to belong... more so than BallyNeal, Prairie Club, Dismal River Club and Sand Hills) = $1000000  With that same 200 members putting in 30K initiation fees = $6000000

The numbers are more murky than foggy bottom, but it might suggest some things to think about...

[Steve_Roths]

Sand Hills = Full Membership w/ wait list
Sutton Bay = lots of openings w/ an average course
Ballyneal = lots of openings
Dismal River = lots of openings and they have reduce prices and added a
                     lot of sub category of memberships
Prarie Club = public course

As for the land out in Montana.  I think the rates were going to be $265 a night for a room and $225 a day for golf.  Add into that food, drinks, and merchandise condensed into a shortened season (reduced labor, maintence, etc. costs) could be a viable business.  If on one very big reason, it is one of the best courses in the World designed by one of two firms.  

[Bill_McBride]

We have a budget in place to almost completely rebuild Pensacola CC in NW Florida due to hurricane ravages and long-range drainage and maintenance issues.  The construction budget is $3.3 million which includes a new irrigation system ($900,000), turning all the fairways, all new grass, bunkers, tees and greens.  Quite a bit of dirt moved around but nothing hauled in or out.

How big will the clubhouse be?  We are figuring $350/SF including FFE (furniture, fixtures and equipment), so the planned 18,000 SF will cost around $6 million.

Our maintenance budget has been too low for years at $600,000 a year, not including capital items.  We lease our carts and our Toro maintenance equipment.  We average around 30,000 rounds a year, no tee times.  

Hope this helps.

[Tom_Doak]

Steve:

If the land is good and you don't have to move much earth around, a construction budget of $3 million including irrigation ought to be enough.  [$2 million for a sandy site, but $3 million if you've got to bring in materials for greens and tees and bunkers by truck]

I hear there are still architects out there who will charge less than a half million dollars [and there's only one I know of who charges $2 million].

Maintenance building and maintenance equipment will be a half million dollars each -- the big new places now spend more than a million on each of them, but I wouldn't if it was my money.

Don't spend $3 million on a clubhouse unless it has lots of rooms you can rent out for $$.

If you want further advice, just send me a private message.

[David_Tepper]

Which reminds me of the old joke,

Q: How do you make a small fortune in the golf course (or restaurant or California winery) business?

A: Start with a large one!

[George Pazin]

Could you do it without fairway irrigation? (I'm asking the archies, not Steve.)

[PjW]

Steve:

RJ has the right idea look at the pro forma first and determine how much revenue you have.  Get a market survey to determine your client.  If you dont need to borrow money or your friend is going to bankroll the project all the better.

Here is a basic outline of hypothetical costs:
Professional Fees and Permitting
     Golf Architect 1,000,000
     Irrigation Design   40,000
     Utility Fees    50,000
     Geotechnical Engineer   30,000
     Arch/Bio/other    30,000
     Engineering/Survey  60,000
     Clubhouse/Maint. Facility Architect  50,000
     Hydraulic Engineer (Wells?)
     Permits  15,000

Construction
     Golf Course 3,000,000
     Clubhouse 1,000,000
     Maintenance Facility 500,000
     On course restrooms 50,000
     Entry Road   15,000
     Utilities to site  20,000
     
Grow-in  (12 months, until opening day)
     Labor/Materials   500,000
     Equipment 500,000
     Golf Carts  (lease)
     Water  200,000
   
This model would be around 7,000,000 for a 3,000,000 golf course.   Not including land cost or debt service.  

Happy Developing!

Phil