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Dale Jackson

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Stone Eagle and the Economy
« on: November 12, 2009, 03:30:32 PM »
I know Stone Eagle is much beloved by many here on the forum, and I include myself in that group.

Here is a link to an article in todays My Desert that talks about the economic environment for valley courses and Stone Eagle specifically.

http://alturl.com/jiq6
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I've seen an architecture, something new, that has been in my mind for years and I am glad to see a man with A.V. Macan's ability to bring it out. - Gene Sarazen

Jud_T

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Re: Stone Eagle and the Economy
« Reply #1 on: November 12, 2009, 04:09:04 PM »
 :o
« Last Edit: November 12, 2009, 04:10:54 PM by Jud Tigerman »
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Golf is a game. We play it. Somewhere along the way we took the fun out of it and charged a premium to be punished.- - Ron Sirak

Peter Ferlicca

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #2 on: November 12, 2009, 04:18:03 PM »
.
« Last Edit: November 12, 2009, 04:28:02 PM by PFerlicca »
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Tim Leahy

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #3 on: November 12, 2009, 05:17:13 PM »
since there are few really good public venues in Palm Springs, I would think that Stone Eagle could easily be sold to a resort or indian casino and be made a big resort success.
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David Stamm

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #4 on: November 12, 2009, 06:14:20 PM »
Quote from: Tim Leahy on November 12, 2009, 05:17:13 PM
since there are few really good public venues in Palm Springs, I would think that Stone Eagle could easily be sold to a resort or indian casino and be made a big resort success.


Few? Hmmm. I'm not sure about that. There is a not ton of them to be sure, but there a number of pretty good public places in the valley there.
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"The object of golf architecture is to give an intelligent purpose to the striking of a golf ball."- Max Behr

Tom_Doak

  • Karma: +2/-1
Re: Stone Eagle and the Economy
« Reply #5 on: November 12, 2009, 07:17:31 PM »
There are just not a lot of buyers in the golf course business right now.  Any real potential buyer would be playing it very close to the vest and hoping to buy the course for a low-ball bid ... there are lots of those out there, waiting.  Meanwhile the membership is trying to negotiate with the bank to buy it for substantially less than what is owed, and the bank is listening because it knows it won't get full price back from anyone in the foreseeable future.

I suspect that there are hundreds of these situations right now all around the country.  I've even heard of a couple of instances where courses which are not in default are renegotiating their loans at more advantageous terms, and the banks have agreed because they need to have some revenue they can count on.
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Bill_McBride

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #6 on: November 13, 2009, 12:29:39 PM »
Quote from: David Stamm on November 12, 2009, 06:14:20 PM
Quote from: Tim Leahy on November 12, 2009, 05:17:13 PM
since there are few really good public venues in Palm Springs, I would think that Stone Eagle could easily be sold to a resort or indian casino and be made a big resort success.


Few? Hmmm. I'm not sure about that. There is a not ton of them to be sure, but there a number of pretty good public places in the valley there.

You'll have to send me a list at your leisure, that's certainly not been my experience!  Cathedral City somehow didn't cut it.
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Lou_Duran

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #7 on: November 13, 2009, 01:24:32 PM »
After playing the first round at SE during the 2006 KP I opined to a couple of participants that I did not understand the development's business plan and that I doubted it would succeed.  Though I am a big fan of Mr. Doak and like SE, I thought the site was too harsh and the course too difficult for the intended market.

I have no idea how much it costs to maintain, but my guess is that it would need a fairly good volume of rounds and a fairly low capital structure to succeed.  With the ample number of alternatives on more benign ground for affluent, older golfers, I don't know that a private model works.  It was already too hot in late May, so is the season six or seven months long?  Is the course good and unique enough to attract a national membership?
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Jud_T

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #8 on: November 13, 2009, 01:47:55 PM »
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Golf is a game. We play it. Somewhere along the way we took the fun out of it and charged a premium to be punished.- - Ron Sirak

BCrosby

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #9 on: November 13, 2009, 02:16:23 PM »
Quote from: Tom_Doak on November 12, 2009, 07:17:31 PM
There are just not a lot of buyers in the golf course business right now.  Any real potential buyer would be playing it very close to the vest and hoping to buy the course for a low-ball bid ... there are lots of those out there, waiting.  Meanwhile the membership is trying to negotiate with the bank to buy it for substantially less than what is owed, and the bank is listening because it knows it won't get full price back from anyone in the foreseeable future.

I suspect that there are hundreds of these situations right now all around the country.  I've even heard of a couple of instances where courses which are not in default are renegotiating their loans at more advantageous terms, and the banks have agreed because they need to have some revenue they can count on.

Tom -

The financial condition of golf courses is at least as bad as you fear. Just in the Atlanta metro area there are 8 or 9 courses in some stage of foreclosure or distress sale. Banks are taking huge, huge hits.

It is beginning to dawn on people that when you finance a golf development, there is only one natural buyer if the golf course goes in the dink. Those buyers appreciate fully the power they have and are wielding it very effectively against the banks. I also don't think we have seen the worst.

All of which bodes badly for the financing of future golf projects.

Bob

 
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Steve_ Shaffer

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #10 on: November 13, 2009, 02:24:27 PM »
All one has to do is read the Deeds&Weeds blog at GD to find out the tip of the iceberg about residential golf developments- Stone Eagle, Bonita Bay and others:



http://www.golfdigest.com/magazine/blogs/deedsandweeds
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Tom_Doak

  • Karma: +2/-1
Re: Stone Eagle and the Economy
« Reply #11 on: November 13, 2009, 02:40:32 PM »
Bob C:

The other problem banks are finding is that they let many of those real estate developers pocket all of the proceeds from the real estate sales while keeping the golf course part heavily leveraged, so now they are trying to collect from the end users (the members) instead of the guy who made the money on the deal.  [Sound familiar?]

[Note:  this is not the case at Stone Eagle, where the problem is more that they never sold much of the real estate which was supposed to justify the cost of the course.]
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Jerry Kluger

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #12 on: November 13, 2009, 03:40:13 PM »
Tom: The banks are certainly going to take a hit when the course is sold to the members but they are also finding out that the members cannot operate the club at the then current dues.  The developers often subsidize the golf operations in order to get the homes sold but when they are no longer in the picture the members find themselves having to dramatically increase dues.  The members also learn that the initiation fees they paid to join the club are not credited toward their purchase of the course.  So a club which projected having 500 members but only has 200 members faces not only the need for equity to purchase the course, but the ability to operate the course with only 200 members paying those costs.
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Jud_T

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #13 on: November 13, 2009, 03:59:25 PM »
Lou,

I think it's a unique course in the valley...It's the only course I'd want to join if I were looking for a winter place out there, and they do have carts, but maybe i'm not the target market....
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Golf is a game. We play it. Somewhere along the way we took the fun out of it and charged a premium to be punished.- - Ron Sirak

Tom_Doak

  • Karma: +2/-1
Re: Stone Eagle and the Economy
« Reply #14 on: November 13, 2009, 04:23:51 PM »
Jerry:

I know you are right, because I'm a member of Stone Eagle, so I understand the financial picture entirely!
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Lou_Duran

  • Karma: +0/-0
Re: Stone Eagle and the Economy
« Reply #15 on: November 13, 2009, 04:58:59 PM »
Quote from: Jud Tigerman on November 13, 2009, 03:59:25 PM
Lou,

I think it's a unique course in the valley...It's the only course I'd want to join if I were looking for a winter place out there, and they do have carts, but maybe i'm not the target market....

The question in not one of "want", but of putting the hard, cold cash down to join and every month thereafter to keep the thing going.  I want to join a lot of places, but there are only two courses that come to mind which I would be willing to write the check to.  Unfortunately, neither will have me as a member.

I do hope that the SE members get a bargain and find a way to make it work.  From my limited experience "in the valley", SE is unique and worthy of a sound financial footing.
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