Do taxpayer owned courses unfairly impact privately owned daily fee layouts?

[Steve Lapper]

Bill Yates:

  Your points are excellent and in most cases poor conditioning and lackluster operations are the norm.

JWinick:

     Your points are also solid, but please don't put Liberty National into the group for "financially feasible" environmental remediation. It is instead a financial mess and unlikely to even salvage the real estate it was meant to help sell.

Matt:

   Do you really think municipalities get into the game to "help expose it to the masses," or even "directly compete" with the local private CCFADs? I think neither. It seems to me that in NJ, towns/counties do it to help justify preserving public space purchases and conceptually create a recreational amenity. I'm not sure they have even the vaguest idea of what they are doing (maybe with the exception of Hominy Hill or Neshanic Valley...they both make $$), but they do seem to begin under the auspice of open space preservation and recreational benefit creation.

 

[Michael Powers]

I agree with the sentiment that these developers know what the deal is regarding munis in the proposed area to be developed.  What is surprising to me are the number of developers or private individuals willing to build a daily fee with no room to develop housing as there are many more lucrative investments.  The amount of money paid out before they ring the cash register is astounding.

[W.H. Cosgrove]

Governments that compete on the low end to provide otherwise unavailable recreational activities to underserved taxpayers are fine.  

Governments that choose to compete for the high end market are indeed using favorable tax dollars to compete.  By issuing tax free munis at lower rates they are able to build at higher costs, outcompeting the private builder.  Secondly, creative accounting, makes for skewed costs and levels of risk.  One local example has a $22 million golf course not including the $11 million in land acquisition costs in their accounting.  Clearly this favors the government owed and operated facility over the privately owned one.  

And finally when tax dollars are used to protect the down side risk for such a course, the private builder is severely limited in how his business plan should be constructed in relation to the government backed variety.  Taxpayers are used to protect the investment which is b uilt for the use of a very small segment of society.

Government should be supplying only those services that would otherwise go unprovided and that the electorate finds needed for the betterment of the society, a high end publicly owned golf course is a tough sell under those circumstances.  

[Sean_A]

I think governments should provide services that are lacking AND what its resident's are willing to financially support.  The problem is consultation.  How does a local or state government know what the residents expect and are willing to support without a consultation process which includes budgeting info?  At the very least surveys outlining possible services to be provided should be sent out every ten years or so AND long term planning should in part be based on these consulting surveys.  Of course, folks have to respond!  Its hard to blame governments when they are driving blind due to citizen apathy.  I for one am more interested in the details rather than the broad strokes (which by the look of the current campaign tells the voters nada).

Ciao

Ciao

[W.H. Cosgrove]

I think governments should provide services that are lacking AND what its resident's are willing to financially support.  The problem is consultation.  How does a local or state government know what the residents expect and are willing to support without a consultation process which includes budgeting info?  At the very least surveys outlining possible services to be provided should be sent out every ten years or so AND long term planning should in part be based on these consulting surveys.  Of course, folks have to respond!  Its hard to blame governments when they are driving blind due to citizen apathy.  I for one am more interested in the details rather than the broad strokes (which by the look of the current campaign tells the voters nada).

Ciao

Ciao

I can think of several ways to determine need without asking a taxpayer what they "think" they need.  A survey of tax revenues from local courses, a survey of available tee times, and a determination of levels of income in relation to recreation activities and the need for further golf.  these would be some of the processes a developer would undertake, why wouldn't a government do the same.  

Instead it seems they find a 'feel good' project and then move forward while appeasing the tax payers.  

[archie_struthers]

 


As to my amigo Garland Bayley's  "crybaby" analysis LOL!

Be careful what you wish for, Karl Marx is alive and well in state government.

[Kalen Braley]

I think this issue, as has been suggested before, needs to be analyzed on a market by market basis.  In a place like NorCal, I shutter to think what would be available for Joe Q Public without the munis. They wouldn't have anywhere remotely affordable to play.  With land values being astronmical, there is almost no way an affordable non-muni course would be in existence.  Even places like Cinnabar which IIRC is privately owned, thier prices are likely lower due to cheaper alternatives around.

Contrast that to here in Salt Lake City.  With such a large group of affordable and good quality munis, it puts a lot of pressure on the CCFAD's and even the most expensive one is only $60 in peak season.  There are a few of these that have been gobbled up by the county because they couldn't exist on thier own.

So I guess who this is good for, depends on your point of view.  If you are a golfer like me who plays these often, its super.  As a developer though, I would suspect its tough to enter the SLC area market as a CCFAD because you likely won't get away with charging more than $50/round.

Utlimately though I would suspect whether a CCFAD can compete against the munis would depend on local land values and whether this is tempting to private investors to get a better bang for thier buck otherwise.

[J Sadowsky]

I think you guys are taking the terms "tax-free" at face value.  There's nothing that one can give themselves that is truly "free."  Munis take an opportunity cost hit, because the land that could be developed privately would raise tax money - in theory, an 100% opportunity cost.  

[A.G._Crockett]

The Robert Trent Jones Golf Trail, funded by public funds, was a conscious attempt to stimulate, on a very large scale, golf tourism and economic development in Alabama, as well as to provide quality golf courses for its citizens. I doubt a private entity would have ever taken on such a large project.

Can anyone speak (with some knowledge, if possible  ) as to how things are working out? Is the state earning a positive return on its investment? Has the private development of golf courses in Alabama been impacted over the past 5-10 years?

It may be a technicality, but the RTJ Trail was built with money from the state employees' retirement fund, not tax money.  In other words, the money was invested in real estate/golf, rather than other investment vehicles.  There were no additional demands made on the taxpayers.

As to the financial health of the Trail, I don't really know.  My guess is that it has been successful, but that is a relative term.

[Bruce Katona]

Archie: I could not have expressed an opinion any better than what you stated.....as you well know and understand the daily fee market, you know exactly how hard we need to work at Twisted Dune to be successful in a very competitive AC golf market.

[A.G._Crockett]

If munipalities built only muni's then I'd say there's no problem as it provides a needed service.  But they don't.  They build high end daily fee courses that are 7,200 yards long charging $85 a round.  That is not providing a service to golf, junior golf, or to the community, that is an aggressive attempt at capitalism, with government help.

And they don't get just the land for free, they get the whole thing for free because they often pay for the course out of capital funds.  They then call it profitable if they make a single dollar, even though they don't have any debt service.  Meanwhile the guy down the street with the family friendly layout who has to charge less is getting creamed because he lost his corporate outing business and he DOES have debt service because he had to take out a loan to renovate to keep up with the muni course.

You can argue that is is cheap for residents, but what about when they undercut the other privately owned local courses for non-residents, too?  Is that fair?  

SBusch,
I, too, worry about the muni's that are high-end and charge $75+ per round, but I don't know of anywhere where the private course is the "family-friendly guy down the street" as the actual market model.  If anything in golf is "family-friendly" it is vastly more likely to be the local run-down muni, rather than a privately owned course of any stripe.

In that regard, is it possible that the private courses might actually benefit from the presence of munis?  If more people begin to play golf at low-cost public courses, doesn't that create a market for golf that will ultimately send golfers toward the privately owned courses?  Unprovable, of course, but just something to think about...

[Steve_ Shaffer]

Since the history of public golf in the US started with munis-see the Cobb's Creek thread- does anyone know the first non-resort public daily fee course developed with private money?

[John Moore II]

I'm not sure what was first, but I know Pinehurst started as a resort with golf courses in 1898. I would suspect that has to be nearly the earliest.

[Steve_ Shaffer]

Pinehurst is a resort and doesn't qualify. I'm looking for the first non-resort, non-muni public daily fee course developed with private money. I'm thinking of a place like Marble Hall GC in suburban Philadelphia that was designed by its owner- William Flynn. Perhaps Wayne Morrison can chime in here and tell us when this course opened for public play.

[Lou_Duran]

Matt Ward's question is unanswerable due his introduction of a highly subjective, unreconcilable qualifier ("unfairly").  It really comes down to our beliefs on who should dominate society, the government collectively or the individual through his free choices.

With participation rates in the 10% range in many communities and capacities well in excess of demand (excluding hyper-regulated, highly dense metro areas), it should be asked why local and state governments want to get in the business.  Is it a case of following the leader (Alabama has done it, why shouldn't Louisiana and Tennessee do it to?), or do they see an opportunity to fund other park and recreation programs from operations?  Could it be as simple as giving the community politicos and bureaucracy a chance to play Big Time Developer without much personal downside risk?

Is it fair for a city to compete with a golf developer on a piece of land using its own zoning and permitting powers to effectively block the sale to the private sector?  What if that developer was a city resident for over 20 years, paying taxes to the city on several properties?  In effect, the developer through the forced contribution of his resources (taxes) was actually competing with himself!  His own funds were used to undermine his interests.  Fair?  I think not.

I am in full agreement with Mr. Cosgrove.  From my perspective, the only government involvement in golf course development and management should be at the very low-end and beginner markets.  Even at this level, I think it is "fair" to ask on a case-by-case basis for a thorough justification of why the taxpayer should be involved in a commercial activity in which so relatively few of its members are participants.          

[Mike Sweeney]

Since the history of public golf in the US started with munis-see the Cobb's Creek thread- does anyone know the first non-resort public daily fee course developed with private money?

The Island Golf Links now known as Garden City Golf Club was built by the Garden City Company and one day passes were $0.30 and could be purchased at the club or the hotel. Annual passes were $15.00. Opening day was 1897, and I can't say it was the first of this model but it had to be close.

I guess you could argue that it was a resort with the nearby hotel, but it appears from GCGC history book that you could just play the course.

[Jim_Kennedy]

For every 17 private CCs or privately owned daily fee courses in the U.S there are 3 munis, and in 25% of the cities where they are located the course has been 'privatized' by contracting the facility out to a management company. Perhaps there is no 'real' property tax paid, but they do pay lease fees. And don't forget the sales tax, entertainment tax, payroll tax, personal use tax, fuel tax, and income tax these operations are still liable for.

You can argue what's fair or if local governments should be involved 'til you're blue in the face, but without munis there would never have been anything near the same number of people as enjoy the game today.

[Cliff Hamm]

Since the history of public golf in the US started with munis-see the Cobb's Creek thread- does anyone know the first non-resort public daily fee course developed with private money?

I might be Kebo Valley in Maine.  While in a resort area the course itself is not part of a resort.




   



History
Founded in 1888

For over one hundred years, golfers from all over the world, young and old, famous and not so famous, professional and novice have thrilled to the challenges of the Kebo Valley Golf Club. Rich in tradition, endless in surprises, incapable of being mastered, the Kebo course, once played, never loses its attraction.

Kebo is not just another golf course. Kebo is a source of pride for Mount Desert Island, an enticing lure to tourists from around the world, and noble adversary to all who play the course.

Kebo is a living thing to the people who challenge its fairways. Its face and character constantly change with the seasons, the wind conditions and even with the daily movement of the sun. It seems, at times, nature conspires with the course in order to change a brilliant nine or even fifteen holes into a frustrating round by the time one walks off the 18th green.

But Kebo is also a special place, even to those who have never played the game of golf. It preserves hundreds of acres of land in their natural state, providing a recreational resource which helps draw thousands to Mount Desert Island. It is a sanctuary amidst the hectic pace of a Bar Harbor summer.

On July 14, 1894, the local paper, the Bar Harbor Record, noted “A golf club has been formed and links covering one and three fourths miles have been laid out at Kebo Valley. Mr. Herbert Leeds, the champion player, is the instigator of the club.” Leeds would return to Kebo over the years and after redesigns by member Waldron Bates and pro Shirley Liscomb, he would have a hand in the 18-hole course that remains in play today. Kebo Valley Golf Club is one of those rare courses that seem both state-of-the-art and turn-of-the-century. The course is as every bit as captivating today as when it was installed.
Kebo Valley Golf Club Milestones

    * April 27, 1888: Kebo Valley Club incorporated as business promoting the "cultivation of athletic sports and furnishing innocent amusement for the public for reasonable compensation."
    * July 18, 1889: First clubhouse opens, near the site of the current fourth hole. The club grounds also host a small theater, casino, horse race track, baseball field, and tennis and crochet courts.
    * 1891: The first six holes, designed by famed architect H.C. Leeds, completed. Only seven other courses operating in the year 2000 were built before Kebo.
    * 1896: Course redesigned, three holes added, completing the nine hole layout. "Kebo Valley Golf Club Links" began to attract national attention.
    * 1899: First Clubhouse burns down at the beginning of July.
    * 1900: Second clubhouse opens near site of present 18th green. Famed golfer Harry Vardon plays an exhibition match.
    * 1902: Kebo becomes a member of the United States Golf Association.
    * 1906: Course reconstruction shifts layout, boosts length from 2501 to 3000 yards.
    * 1911: President Taft cards a 27 on what was then the "Elbow" hole, which is today's 17th hole. This hole is now commonly referred to as the "Taft" hole.
    * 1920: Kebo acquires 40 acres of land east of Harden Farm Road, opens the "outer" nine holes, completing the 18-hole layout.
    * 1922: Golf great Walter Hagen played two rounds with famous trick shot artist Joel Kirkwood. Hagen first shoots par 70, then cards a course-record 67. Hagen's record would stand for 50 years, before club pro Lew Hershey shoots a 65.
      Some years before Hershey's great round, longtime Kebo worker William "Bill" Burns challenged Hagen's record. He was eight strokes under par through 16 holes, but despite the efforts of friends and fellow golfers to illuminate his finish with their car headlights, Burns was unable to complete the round.
    * September3, 1926: One of the nation's leading golf architects, Donald Ross, wrote that the third hole should be rebuilt. Ross argued that an approach shot failing to reach the lofty summit would ignominiously roll back downhill past the luckless golfer. As the blood pressure of the then average portly member of Kebo rose, arteries hardened and breath, as well as tempers, became short. It was eventually decided that the climb to the "Shangri-La" green should be eliminated. Today, members often wonder how it might be to play the third hole as it was originally constructed.
    * 1947: The Fire of 1947 consumes 2nd clubhouse, and much of Bar Harbor.
    * 1958: Carts begin to replace caddies.
    * 1960: Kebo hosts its first Maine Amateur. Jimmy Veno wins the Men's, and Martha Page wins the Women's.

   

[Pat Brockwell]

Can anyone think of similar ways govt competes with private enterprise?  Around here the city got involved in building nice indoor recreational facilities and several small private health clubs went belly up shortly thereafter.  A few still hang on.  Why is recreation a function of government?  Is our constitutional right to the pursuit of happiness the basis?  Is it in the public interest that a bunch of tightwad old farts give their wives some breathing room every day?  I suppose one could argue that the military unfairly impacts Blackwater's bottom line.

[Ray Richard]

 The Town of Brewster MA owns and manages 2 courses at the Captains Golf facility, and both courses are fine layouts with great conditions. A few miles away, the Ocean Edge Resort just finished a Nicklaus Design redo of their course. Ocean Edge has hundreds of condo’s lining the fairways, and some are owned by retirees.

 The Ocean Edge residents now are faced with a decision-either join the Town owned courses for $900.00 per year, or pay a hefty initiation and membership fee and play the upscale course bordering the condominiums.  

[SB]

I've spent a great deal of time in Canada and there are very few muni's there.  However, there are a TON of low cost daily fees built in the 70's.  While there are some significant cultural and land use differences, I'd say that the lack of muni's there certainly encouraged the construction of these courses.  That said, all the high end daily fees built in the last 10 years will be low end in 20 years, so maybe there's hope.

A.G. - In Atlanta, I'd put River Pines, Greystone, and Wolf Creek in that category to name a few.  Greystone and WC compete against muni's, RP does not.  Which do you think is the busiest?

[Matt_Ward]

One has to ask don't communities in many locales in the USA have a recreation / community department that provides access and often facilities for people to introduce themselves to for their overall enjoyment ?

I mean towns have tennis courts -- they have ballfields, they have swimming pools, etc, etc.

The logic is not that big a stretch to extend to the golf side of things.

The issue is at what level (caliber of course) / budget amount is appropriate for the local area people to absorb? Some towns have deeper pockets than others. If private forces are interested in moving ahead with their own plans AFTER  really examing the marketplace isn't the onus on the private provider to situate their product where the probability of market success makes more sense?

[Jim_Kennedy]

The misguided overbuilding of new for-profits that we've seen in the past ten years has had a much greater impact on the health of existing pay for play courses than have the munis, which are only 15% of all layouts in the U.S.

Look at Myrtle Beach. Several years ago one of the NY papers printed a story that said MB had something like 100 courses and 4,000,000 rounds and everyone was happy. Every one of the 100 courses had the chance of potentially getting a 40,000 round 'share' of the market, although we know that there were those who garnered more or less of  this 'share'. Enter the new courses, at the time of the article there were 7 more opening up, but there was no increase in the number of tourists to the area, ergo, no increase in rounds played . Now the potential 'share' dropped to 31,775, effectively ending the life of some of the for-profit courses who had already been living at the low end of the potential 'share' number.
 __________________________________________________
If I owned a course that charged $50 and the muni charged $30 I would make my experience $20 better. If I couldn't afford to do that, or price was an issue in my market, I would try and lure some of those value buyers away by offering $30 rounds at specific times, and only to those who produce a receipt from the muni at check in.
If my fees were $100 and the munis were $30, I would offer a $30 rebate at specific times, once again, only to those players who produce a receipt from the muni.

[archie_struthers]

 


Matt... entrepeneurs are really in trouble if government gets into a business.....how can you make a value judgment on demand if the government can build a facility that makes no sense economically ....doesn't have to make a profit....worse yet doesn't even have to service debt ....pays no taxes on the land.... and receives benefits (liquor licenses) ...political business/fundraisers et al


Look at the insanity we witnessed at Deepdale....where the politicians tried to grab one of the toniest clubs in America..

We need less government in business ...not more

by the way ...they usually don't build great projects...too many favorite sons in the process   lol!

[Steve Lapper]

Archie:

    You are fundamentally right and I concur with having less government in business, rather than more. You are also right about their generally mediocre projects, yet shouldn't they seek to make a deal with local recreational businesses to provide low cost access?

   Why should a local operator (and I'm not suggesting TD practices this) enjoy laissez-faire economics when a valid use basis (golf) exists for taxpayer $$, when used to purchase & maintain open space lands? If a municipality spends taxpayer $$ to provide a low-cost and valid recreational activity (pool, golf, tennis courts) in order to derive a benefit from otherwise unused property, why is that unfair in the competitive market place? Shouldn't that be an inherent business risk to the golf course developer? Local and State regulation is always subject to change, thus leaving all sorts of businesses vulnerable to future economic risk.

   I pose these questions, not from a personal preference perspective, but instead to illuminate the conflicting interests between taxpayer-benefit and capitalism.