My club is closing - questions for group

[Scott_Park]

Well, it happened- my club is closing until further notice (12 Oaks in Holly Springs, NC). 

I can't begin to describe how nice it was having a place for my son and I to go play golf whenever we wanted.  I guess we spend more time at home...

As a recap, the course is part of new residential development with approx 90% of the 50 houses vacant.  The developer still owns the course, but Clubcorp has been operating it for the past 14 months.

Obviously, some maintenance needs to continue, but does a course really save that much money by doing the minimal amount of maintenance vs. the normal amount?

Is it reasonable to think that as soon as the real estate market picks up, the developer will have to put the course back in playing condition to facilitate home sales.

Any other insights?

Scott

[Clyde Johnston]

Eastport GC in Myrtle Beach was closed for almost 2 years before someone bought it and started maintaining it again before reopening last December. They lost the greens during closure (Bermuda) and weeds took over. Also had some issues with the irrigation system. They have it back in decent shape but the cart paths have so much root damage you need a seat belt.

If your course has bent grass greens, they won't last long without regular maintenance. I think some maintenance is necessary and yes, they will save a lot of money. Payroll is usually 40 to 50% of the total maintenance expense so if all they are doing is mowing once or twice a week and skipping all of the hand labor, they can save quite a bit.

[Greg Tallman]

Well, it happened- my club is closing until further notice (12 Oaks in Holly Springs, NC). 

I can't begin to describe how nice it was having a place for my son and I to go play golf whenever we wanted.  I guess we spend more time at home...

As a recap, the course is part of new residential development with approx 90% of the 50 houses vacant.  The developer still owns the course, but Clubcorp has been operating it for the past 14 months.

Obviously, some maintenance needs to continue, but does a course really save that much money by doing the minimal amount of maintenance vs. the normal amount?

Is it reasonable to think that as soon as the real estate market picks up, the developer will have to put the course back in playing condition to facilitate home sales.

Any other insights?

Scott

Scott, full closure is the first step to something far worse more often than not. That is to say once closed far more disappear than reopen. As Clyde says the money savings is significant even if minimal program is continued with an eye toward a relaunch which would be your best case scenario at this stage.

If I were you I would research the developer and find out their financial footing now. If they are in trouble beyond the single development they will likely abandon the facility all together.

How was the facility operated? Private, Semi-Private? What was the primary revenue stream? Developer subsidy? Many developers who know nothing will let it go beyond the point of economic benefit and thus make it virtually impossible for they themselves to invest in re-opening. This leads to complicated relations between they and a potential buyer with strings here and there and nobody wins except perhpas the public golfer who may have attractive pricing versus previous offerings at a typically watered down facility. (See Melrose just off Hilton Head Island... still not sure if they had reopened after a few years).

Sorry to be negative but suffice it say I have had some experience o in this regard.

[Adam_Messix]

Has 12 Oaks used another name during it's history?  It's not in my Carolinas PGA book and was wondering if it has been recently renamed.

Either way, it's sad to see a course close.

[Scott_Park]

Its always been 12 Oaks, but officially might be known as the Club at 12 Oaks.

[Steve_ Shaffer]

Looks like a good course:

http://www.12oaksnc.com/golf/course/index.php

Scott,

Has the news hit the newspaper? I couldn't find anything online. Please post the story when it appears.

[Ulrich Mayring]

So I guess don't move into a golf community unless the developer gives you some guarantees or money back if the golf course closes?

Ulrich

[Tom_Doak]

Scott:

One possibility we have been kicking around for High Pointe (if and when I had some control of the situation) would be to open the golf course on weekends only for the rest of the season.

This idea was brought up by a former superintendent friend of mine.  He points out that if they kept the water turned off and just did some low-level maintenance on Thursday and Friday, they could open on weekends and do a fair amount of business for minimal cost.

I think it's a great alternative to full closure, particularly for a development course where someone is committed to doing the minimal maintenance anyway.  The only hard part would be finding a staff willing to work on a part-time basis.

[Peter Galea]

no comment.

[ChipRoyce]

Its always been 12 Oaks, but officially might be known as the Club at 12 Oaks.

Scott -
Very sorry to hear this.
Is the club already closed or will do so soon?
I had heard that Jim Goodnight's real estate operation was looking at the club & development and possibly bring under the fold of Prestonwood but didn't happen.

[Adrian_Stiff]

Opening just for the weekend would not work in the UK, probably would not elsewhere. standard charges, rates, rents are based on a 7/7 period not 2/7, it be better to shut, the point you make re staff working part time will pretty much be true, maybe a group of volunteers keeping something going could happen. I think the downscaling approach makes sense, maybe go back to 1 or 2 greenstaff, cut greens less frequently, let some tees go. To some degree the downscaling is happening everywhere, not many places are adding things. Admin tends to be the first to get cut, cutting opening clubhouse hours can save. Its tough for everyone and maybe could get a lot tougher for the bigger/better clubs...currently small and poor is beautiful.

[Chris DeNigris]

Are there a lot of development courses that close and never reopen? I know of many that go thru several bankrupt owners, foreclosure sales, temp closures, downgrading from private to public, etc...but how many actually close and never reopen? Just seems that the negative impact on home property values would be too severely affected to let it go dormant. A lot of the land would be undevelopable and unusable for anything else...Any examples?

CD

[Trey Stiles]

One thing you might think about ... Get a group of folks together to form a club / single purpose entity ... Offer the owner a $ 1.00 per yr lease ... The owner gets their maintenance done ... The owner gets a hold harmless ... Sounds like the lender is the real owner and any lender would much rather have an operating club as opposed to vacant former golf course ...  The club gets a course that they can open Seasonally on  Fri - Sat - Sun and operates on a shoestring ... Sounds like a potential fun project for the group.

You might even get the owner to kick in a few bucks to prime the pump.

[Adrian_Stiff]

Are there a lot of development courses that close and never reopen? I know of many that go thru several bankrupt owners, foreclosure sales, temp closures, downgrading from private to public, etc...but how many actually close and never reopen? Just seems that the negative impact on home property values would be too severely affected to let it go dormant. A lot of the land would be undevelopable and unusable for anything else...Any examples?

CD

Chris- I think this financial situation has never happened before so its new ground. The world wars were probably the closest test. Rates, electric, health and safety compliance, sales tax are all nasty nails.

[Leo Barber]

no comment.

What happened?  I see you have retracted your initial post?  Fair point Tom - this is the reality and good to see people trying hard to save courses and jobs.  I think you could retract your maintenance schedule much as Pete did his post and try and make the arrangement viable.  You could simply prep for the weekend easy as you like.  Sound thinking and outside of the box and if thats what it takes to retain the course and retain the staff albeit on a restructured schedule I think thats responsible thinking.  Manage the expectation......

[Bill_McBride]

So I guess don't move into a golf community unless the developer gives you some guarantees or money back if the golf course closes?

Ulrich

Good luck!

[Ulrich Mayring]

Well, I am not familiar with this business model, as it is very rare over here. Do the residents pay an annual fee or greenfees per round? Or do they play for free, as part of the housing deal?

Ulrich

[Bradley Anderson]

Well, it happened- my club is closing until further notice (12 Oaks in Holly Springs, NC). 

I can't begin to describe how nice it was having a place for my son and I to go play golf whenever we wanted.  I guess we spend more time at home...

As a recap, the course is part of new residential development with approx 90% of the 50 houses vacant.  The developer still owns the course, but Clubcorp has been operating it for the past 14 months.

Obviously, some maintenance needs to continue, but does a course really save that much money by doing the minimal amount of maintenance vs. the normal amount?

Is it reasonable to think that as soon as the real estate market picks up, the developer will have to put the course back in playing condition to facilitate home sales.

Any other insights?

Scott

Scott,

I have never understood the wisdom in hiring a management company to run a golf course. I have no doubt that the local greenkeeping talent could run your operation much more cost effectively than any management company can. If you keep the guy on who works for club corp and let him run the operations with the help and support of his local greenkeeping fraternity, he can probably get you through this tough time better than a management company can.

Just my two cents.

[Scott_Park]

Update-

Clubcorp is no longer managing the club and will refund membership deposit.
Developer is going to take over operations using staff from nearby facility.
Should know more today or tomorrow.

Ulrich, typically a member pays an upfront amount and monthly dues. 

My concern now is whether or not the developer is going to be looking to the members to re-sign with them as I am very leery of writing a check to a real estate developer in today's environment.

Thanks for the comments.

[Scott Furlong]

Rumor is they fired the GM and Superintendent and from what I heard it was very unprofessional.  Both are great guys and the Superintendent grew in the course. He is a well respected Sup.   

[Tommy Williamsen]

Is the course closing fully ?  I called a couple of weeks ago to play but was told that until June there was only member play that the club has not officially opened as yet.  I wondered if the Raleigh area could support one more high end club.  Hassentree nearby is also in trouble.  Tough times

[Scott_Park]

No news as of yet, but for the time being the course will remain open for member play.