[Steve Lapper]

One way we tried to look at expanding the portfolio is to acquire an existing lousy golf course in a decent geographic location on a decent sized piece of property with the permits in place to irrigate and operate (liquer license) and blow the existing couse up as a complete remodel.....with the permits in place and proposing a complete  remodel, you generally don't have to wait three years to go thru the permitting process and spend considerable dollars on carry costs and consultants.

Haven't found the correct opportunity yet, but continue to look.

Bruce:

    The idea is an ideal, however, wouldn't you agree it's damn near impossible on very well located land(close to MSA)?

[Adrian_Stiff]

Pat- A problem with a 10 course complex in remote areas are the expenses involved in getting there. I was offered 500 acres of land in Belize a few years ago for nothing to develop as a golf course, the land fronted the sea, was rolling linksland scattered with scrub pine, but the sums just did not add up. Flights to South America and South Africa are fairly expensive from everywhere, but in principle lots of clustered golf courses near an accessable airport coupled with sunshine and good hospitality will attract golfers in large quantities. In Southern Spain the Costa del Sol is referred as the Costa Golf, with about 50 golf courses in a 100 mile stretch, not many would past a 4 on anybodys scale, weather is the main key to success. I think Eastern Europe could hold the key, as golf courses spring up around around Prague, Budapest they could become attractive places to have holidays or mini holidays.

[Patrick_Mucci]

Tom Doak,

A model that might work is a private GOLF club in the middle of a high number of large residential golf communities, where the GOLF club is light on social events, dinner service and all of the trimmings that can be found at the residential community courses.

One of the negatives of the remote destination courses is that you can't just show up and expect a game.  Usually, you have to bring your game with you, scheduling your plans and the plans of others well in advance.

Once the novelty wears off the trips become tedious rather than exciting.

With a local draw, a GOLF only club, in the midst of numerous residential community golf courses, would eliminate the need to bring a game, which also adds to the cost to belong.

Golf could be spontaneous or casual rather than planned weeks or months in advance.

A simple clubhouse with limited breakfast and lunch service, combined with an outstanding golf course would be a great model, and a good draw

A ride of 30-45 or so minutes would seem acceptable and it would allow for the acquisition of land at lower than premium prices.

Alternatively, I can see taking an existing daily fee or failed private golf course and redesigning it, such that the product is so outstanding that it will become a major factor in attracting members.

Just a thought.

Adrian,

I agree with you.

Add to the equation that Americans feel safer in America.
And that there's a reason for that.

[Tom_Doak]

Patrick:

I've done those before, actually -- Stonewall is such a club, and Stone Eagle, too.

Adrian:

Whom do I call about the land in Belize?  I bet that one could work.

[Joel_Stewart]

A model that might work is a private GOLF club in the middle of a high number of large residential golf communities, where the GOLF club is light on social events, dinner service and all of the trimmings that can be found at the residential community courses.

The Plantation in the Palm Springs area worked.   Among the 100's of golf courses with houses, a men only club, high on service.  I've always thought the same model could be used in the Scottsdale area.  

[RJ_Daley]

From the little I've read, including some mention in the GCA.com interview with Randy Thompson, Chile looks very appealing.  Apparently, they have a big welcome mat out for U.S. investment and immigration.  The land looks pretty golfy, and much seems to have a Monterey Penn., sort of look.  The government is even helping subsidize flights to make them price attractive.

[Lester George]

Pat Mucci,

With a few exceptions you just described the Country Club of Florida.  It is so different because of it's relaxed attitude, small (300) membership and set amid many, many other developments.  It works so well, you may be on to something.  I know people who have lived in Palm Beach County for 25+ years who don't even know its there even though it was founded by an Augusta National member in 1957.

Really succesful, private, enclave type of place.  One of the coolest clubs I have ever worked at.

Lester

[Bruce Katona]

Steve Lapper: Difficult to find in close to MSA, yes; impossible, no......making the deal witha wacky Seller or Trustee, darn near imposible.....

We missed on one last year and could make a deal on two now.....one is better and less risk than the other.

[Patrick_Mucci]

Lester,

When you examine the reasons for the success of those type of clubs you wonder why more of them haven't been created in the midst of dense residential community golf courses.

While they tend to be second clubs for many, that's an advantage in that the golfers aren't looking for all of the amenities associated with the residential and highly social clubs, so they're content with light facilities, which is cost effective.

Golfers in sold out residential communities quickly tire of having to make tee times well in advance, which also forces them to have pre-set games.  With hundreds, if not thousands, trying to get the same tee time, there's a substantive displacement factor, where a desire to tee off at 8:00 am turns into a 10:00 am or later.

In addition, the residential community courses RARELY have caddies/walking.  It's almost universally cart golf, whereas, the "golf only" clubs seem to have good caddy programs with carts available for those that want them.

A good golf course with no tee times and caddies seems quite appealing.

Today, the key would be to find a land owner, preferably a farmer to joint venture with

[Tom_Doak]

Many of you seem even more pessimistic about the state of golf development than I am.  If the only business model that will work is in Chile, we're all doomed!  

We've got about 40 potential projects in the hopper right now and while I am sure that some of them will never get built, there still seems to be a lot of interest out there.  The majority of the calls are from overseas, but from many different places, so it's not like development is dead anywhere.

[Donal Breasail]

i recently read that  the Discovery Land Group
who created the hideaway and Madison club in La quinta amongst others are working on a new project near Abaco in the Bahamas.Will this be a success based on their numerous other clubs or is it pushing the boat out too far as their is already competition there in the form of deSavory's Abaco?

[Donal Breasail]

The Plantation in the Palm Springs area worked.   Among the 100's of golf courses with houses, a men only club, high on service.  I've always thought the same model could be used in the Scottsdale area.  

The Plantation is a male only club from what i recall.

[John Kirk]

I'll tell the Pumpkin Ridge story, since it's a different model.

No houses, 36 holes, one public and one private course on 340 acres.  The public greens fees are supposed to subsidize member costs.  Greens fees at the public course are around $150 in the summer for the casual or one time visitor.  Repeat users of the public course can get a good deal where they can play for $70 or so.

Both courses are good, one course is not dramatically better than the other.  Full club members can play either course.

The club cost $17-20M to build in 1990-2.  After a few years, the silent partner who put up most of the money wanted his money back, and in 1997, the partners sold a portion of the Club (with a 49% voting share) to American Golf at a modest premium, with several caveats regarding usage and conditioning.  The silent partner was repaid.

After 15 years, Pumpkin Ridge is doing fine financially.  It has more or less reached its goal of 525 regular members, plus 100-150 other national and junior members.  It is very busy during the summer.  Both courses get about 30-35 thousand rounds per year.  Pumpkin Ridge members complain that our private course isn't very private, as they allow outside play quite liberally.  But it's really a nice place, and though it's a bit crowded, it has a nice, social, family atmosphere.  It is a success.

The Club always has the option of adding to the membership, and privatizing the public course in the future, an option I always advocate.

Another club across the valley in Aloha (Oregon), The Reserve, has attempted the same business model.

The two course model, with two very good courses, one open to the public, can work.

[Mike Sweeney]

The two course model, with two very good courses, one open to the public, can work.

John,

Newport National (RI), was trying to do that exact model. They got caught in a bad cycle, and never got the clubhouse built on course #1, and #2 never got built. It is a shorter season on Aquidneck Island, but I still am surprised that the first course has not found a niche. It is a good course in an area lacking in good public golf. The problem is there is some cheap ok public golf on the island.

[John Kavanaugh]

This year I think Sand Ridge merged with a local old school private.  I would like to know how that worked out as it seemed kinda strange.

Of course you have the Nicklaus Signature model, which I really question.

[Jeff Spittel]

In certain areas of the country, particularly in the north east, where there is a proliferation of great private clubs, it seems that the moderately priced private club model is overlooked.

Since I don't know much about the subject, do the economics of new course construction today preclude this approach?

[Matt_Cohn]

What about the St. Andrews (and lots of other places, I'm sure) model of multiple "clubs" sharing one "course"? I can't think of an example of that in the United States, where club and course are synonymous.

[Ulrich Mayring]

I don’t agree with what appears to be your premise.  I understand you to say that great architecture can only be accomplished by design firms with a large staff.  Therefore, modest, inexpensive golf courses if they are to have any redeeming qualities must be designed by these firms but it only makes sense under the formula you went on to describe.

I'm afraid I was unclear. I (rhetorically) asked what could motivate a successful architect (as in: economically successful with a full-time staff working for him) to build a modest golf course. Of course that doesn't mean that a lesser-known architect couldn't do a great job on that site. But what he couldn't do was the business model I detailed, with 100 good-value courses off a certain templating approach, where the architect's operation is in on the profits. There is substantial investment involved, which I think only a large architecture firm could put up.

A chain of good-value courses would be highly profitable. Each course by itself wouldn't make that much money, but it would also be pretty resistant to competition. Good value courses always get play. 100 courses with a small, but dependable profit translates to a rainmaker.

Ulrich

[Steve_ Shaffer]

The new membership plan(semi-private) at University Park CC in Sarasota, FL is a success:

www.heraldtribune.com/article/20071220/COLUMNIST11/712200711/1006/SPORTS

[Mike McGuire]

Has this ever happened? Is it even possible?

How about about a conservation easement model? A landowner wishes to  keep a parcel undeveloped. He could donate the land- to an established non-profit - with the stipulation that it be a public golf course. The entity could then operate under  (501C-3 type) rules.  

This would obviously eliminate land acquisition costs but could also allow course construction investments / maintenance to be tax deductible.

[Doug Siebert]

That's an interesting idea, Mike.

From what I understand, when a course gets built by a developer who isn't interested in golf and is just doing it to increase the saleability of the lots that surround it, often the course is just something he hopes will break even, or provide a tax writeoff.  So I guess this would be similar, and maybe win that developer some positive press as well.

Can anyone think of any differences in the way a course run as a non profit non municipal course would be managed versus your typical for-profit public course?  I mean, aside from needing to make a positive return and/or salary for the owner?  I suppose it would reduce the incentive to build a grand clubhouse to try and book wedding receptions in.

Or maybe not...the local Eagles Club (just a club, no golf course associated with them) does more wedding receptions than anyone else in town.  In fact they are looking to move to a bigger building with enough room to book two such large parties at the same time!

[wsmorrison]

Is it possible that a golf course listed on the national registry of historic places may enable its club members to take a tax deduction on the portion of their yearly dues that goes towards the  maintenance of the course?  Can the same be done for the portion of dues utilized in the maintenance of the clubhouse if it is registered on the same list?

I have a friend who would like to pursue the building of golf courses on family estates, be they 18 holes, 9 holes or some combination of tees and greens that allow interesting play.  We think a relatively small acreage can yield some excellent hole combinations on the right land.  My friend has a course on his estate and understands the importance the golf course has had within the family and would like to replicate that in other projects.  Clearly the market for such a product is limited, but he is determined to try.

[Steve Lapper]

Has this ever happened? Is it even possible?

How about about a conservation easement model? A landowner wishes to  keep a parcel undeveloped. He could donate the land- to an established non-profit - with the stipulation that it be a public golf course. The entity could then operate under  (501C-3 type) rules.  

This would obviously eliminate land acquisition costs but could also allow course construction investments / maintenance to be tax deductible.

Mike:

   While I'm no lawyer and hardly any qualified expert on conservation easements (one of my partners is both though), your process & model suggestion while admirable, wouldn't fly for the applicable test by the Federal and State tax authorities. To the best of my knowledge, no "stipulation" of public golf would earn it a 501C-3 designation as it would equate to some measure of commercial development (and thus violate a CE ruling). Conservation easements also require that the property be put into a qualified trust whose trustee has been already designated as pre-qualified administrator for public or private conservation easement land. I'm not sure, but think even the USGA would not qualify for such a qualification.

   Much of this was learned by a relatively recent effort by a group of us to acquire an existing golf course, place it into a conservation easement (thus precluding any further development on the grounds of the course). This transaction would have been allowed, but on another deal of ours, we ran the gist of your suggestion up our legal counsel's flagpole and were quickly shot down. Good thought though!

[Bruce Katona]

Steve: Sorry to hear that deal did not fly...it was a great idea.

[Jon Wiggett]

What about finding a good piece of land, allowing the construction budget to be kept down to a minimum and then doing the following.

18 holes, small driving range for say 8 people at anyone time, small cosy clubhouse and 10 to 15 accommodation cabins discretely tucked away around the property. Clubhouse offering simple F&B and course looked after by crew of 2 or 3 staff.

Membership limited to 100 people but would include golf and accommodation. Greenfee players limited to 12 a day and members guests. Costs of running the place split amongst the membership.

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