Are munis the beneficiaries of the private club fallout?

[mike_malone]

 Maybe I should stop pushing the Cobbs Creek redo. It will be stiff competition for my club.

[Joel_Stewart]

Could be spring fever because yesterday I played a fairly exclusive private club in perfect weather and it was packed.  From what I was told, they have lost a few members due to the economic crisis but they still have a waiting list to get in although it's much shorter.

[Jason Hines]

I don't think the better clubs will suffer - the ones suffering will be new private courses that never got a full compolement of members and other mediocre private clubs as the time is ripe for people to "upgrade" clubs if they have the money.

Wayne, you described my situation, I am keeping my eyes open for an upgrade.  I am satisfied with where I am at today, but it is 27 miles away.  There is a course 2 miles from my house that when I moved here had their initiation in the 10’s of thousands and monthly dues north of $600 which is quite a lot for a Midwestern Club.  I have my feelers out.

Mark, Michael et. Al, I think you have hit the nail on the head with respect to business model and how they have positioned themselves. 

If I were a developer that built anything in the last 15 years and focused heavily about real estate, fountains, weddings and dining, I would be worried.  But of course, it would have been hard to argue with your plan as housing growth was paying your bills.

Here is a question for the group: 
Would owning a private pure golf club be in better position today with less overhead from the dining, social events, tennis courts and pools?  There are so few pure golf clubs here in the States, but assuming you developed an economic architecturally sound course, (Black Mesa, Rustic Canyon, Wild Horse for example) I would think you are going to weather the storm over the next few years.

Is the above scenario for private clubs the reason why the group think s that munis are in a great position to benefit?

Just filling the time before B-ball starts.

[Mark Kinney]

Jason,

You are so right about the courses and real estate.  Here in Scottsdale, almost all of the new (last 10yrs) private clubs are tied to real estate.  Some have lots of members that want to leave but with the current economic situation cannot sell their house (& thus membership).  As an example, I have heard that there are over 300 members at Desert Mountain trying to get out right now. 

These clubs have cut costs through staffing, etc.  At DM, they did not overseed the roughs this year on all but one of the courses.  Mirabel did the same. 

I have heard a few times over the last few days that Estancia has just started offering non-resident memberships for $75k.  If conditions persist, I expect that a few others in the area may do the same in order to keep their numbers up.