Tilly's Shackamaxon up for sale...

[Phil_the_Author]

From an email received by a friend:

As exclusive agents, Cushman & Wakefield and Fairway Advisors are pleased to present Shackamaxon Golf & Country Club in Scotch Plains, New Jersey for sale.

Investment Overview

Once in a Generation Opportunity:
146 acres rarely come available in the densely populated, upper-income communities of New Jersey.

Continued Golf Club Use or Redevelopment Play:
As an operating golf and country club (founded in 1916) with substantial gross revenues, or as a potential redevelopment
site, Shackamaxon offers a wide range of favorable investment outcomes.

Idyllic Location:
Shackamaxon is situated amongst several upper income communities. The club is adjacent to Westfield, a community with an average household income of $159,000, while a 1 mile radius surrounding the site has an average household income of $146,000.  The surrounding neighborhoods serve as an affluent bedroom community for New York City commuters, and the course is surrounded by million-dollar, single family homes.

Property Summary

• Address: 1607 Shackamaxon Drive, Scotch Plains, New Jersey
• Founded: 1916 (Renovated 2000)
• Site Area: ±146 acres
• Clubhouse: 43,469 SF
• Pool/ Tennis: 15,000 SF/ 4 courts
• Parking: 227 spaces

[Steve Lapper]

Phil,

  This is a little misleading, as the redevelopment potential on that property remains significantly handicapped by local land planning and use issues. The club has been in a death spiral for quite some time as they have a mountain of debt and a declining membership. I suspect someone will come along for a risk trade and dismantle the club and fight the township, county and state for some type of residential/commercial master plan community. Even if they do, it's no better than a 50-50 shot that it ultimately becomes condemned and acquired by eminent domain.

  Being a betting man, I suspect it will go NLE by decade's end.

[Phil_the_Author]

Steve,

That is what all of us believe as well. It will be a big loss if or when it happens. Where is Trump when you need him?

[Matt_Ward]

For what it's worth -- I can't see the township going through the route in allowing additional housing to be built.

Keepind the facility open for golf seems to be the right way -- from what I have been hearing.

Be curious to see if Union County would jump into the situation.

[Mark McKeever]

Is the island green an original part of Tilly's design?

Mark

[Steve Lapper]

For what it's worth -- I can't see the township going through the route in allowing additional housing to be built.

Keepind the facility open for golf seems to be the right way -- from what I have been hearing.

Be curious to see if Union County would jump into the situation.

Matt,

Golf costs $$ to run and the municipalities and counties are running on empty.

Ultimately the Township's hand may be forced...and it'll be near impossible for the County to justify or make any open market purchase.

Phil,

Forget about the Donald on this one. Why would he look to dilute his existing Jersey portfolio?


Guys.....this one has been quietly shopped over the last 5mos. and hasn't received any bid that even covers the outstanding debt!! Regionally, every worthy land developer/builder has seen the deal and passed.

[David_Tepper]

"Is the island green an original part of Tilly's design?"

Mark McKeever -

Don't know the answer to your question, but, as there is also an island green at Tillie's Old Orchard GC in Eatontown, NJ, I am guessing the island green at Shackamaxon is original.

Old Orchard was up for being plowed under for property development 2-3 years ago. The financial crisis spared to course for the time being. Anyone know the status there?

DT  

[Steve_ Shaffer]

Steve,

Does NJ or the county have any "open space" money to spare the course from development similar to the LuLu situation here in PA?

[Steve Lapper]

Steve,

Does NJ or the county have any "open space" money to spare the course from development similar to the LuLu situation here in PA?

Not nearly enough and our new reality-based Governor sure as heck ain't going to authorize a special expenditure for this (as he knows several other clubs might try to cut a similar deal.

[Steve_ Shaffer]

Steve,

So it appears that even the "bottom feeders" in the industry have no interest in this?

[Matt_Ward]

Both Steves:

Union County has worked out a nice arrangement with Kemper to handle Galloping Hill and Ashbrook -- if it became clear that Shack would opt for the housing arrangement -- I could see Scotch Plain and the County moving ahead and seeing what they could put together to keep the course in operation.

[Steve_ Shaffer]

I heard that Troon Golf's management of the club was doing a good job in cutting costs. I guess this was really a declining membership issue.

http://www.troongolf.com/troon_facility.cml?cmd=view&id=shackamaxon_golf_course

[Mike Policano]

I believe the island green on the par 4 ninth was designed by Tillie and built at the outset. There is a picture of the green in the Tillinghast book trilogy.

[Phil_the_Author]

Steve,

My "Donald" remark was way, way tongue-in-cheek!

Mark, yes, the island green is all Tilly. Here is a 1925 photograph of it:

[Steve Lapper]

Both Steves:

Union County has worked out a nice arrangement with Kemper to handle Galloping Hill and Ashbrook -- if it became clear that Shack would opt for the housing arrangement -- I could see Scotch Plain and the County moving ahead and seeing what they could put together to keep the course in operation.

Matt,

   You, of all people, understand that it won't go down this way. They are choking on debt and don't really have the luxury of dictating terms and directing outcomes past bids. If they refuse a deal(s), the banks simply step in and sell it to the highest bidder and they simply tell the County they don't know what they want to do with the property. There is no law that mandates a golf operation. This may well evolve into NJ's prime example for  eminent domain of a golfing property.....very interesting IMO. I know my guys have zero interest at present and they understand land use better than anyone I know.

[Matt_Ward]

Steve:

The issue for Shack is the same as it is for Riverdale in Bergen County. In the latter case they wanted housing -- they are still waiting for that green light.

The same will likely hold true for Shack. The folks around that layout don't want massive condos or other high density housing. Even the mega mansions type will be shunned.

Never said it would be e-z but Union County has smartly engaged Kemper and it would not surprise me if such a partnership with Scotch Plain was done here. Keep this in mind, the banks or whoever else is holding the place now - will opt to get out rather than let this thing hang around their head indefinitely.

[Steve Lapper]

Matt,

   Not really. The 800 lb gorilla in this room is the debt obligation and the inability of either the membership or municipality to effectively service it. You are right, there will be a big fight over any substantial housing plan, but in this case, all the bids received to date are zoning/use (yield) contingent and, as such, not likely to receive a warm and fuzzy welcome from the lender's loan committee. The club won't have the leverage to pick and choose and the municipalities lack the seat at the table to force the terms. Thus, the bank will likely look for any bid that is free of contingencies and/or has absolute assurances from the town on density yield (Something I don't believe they can get at present).

   Management can only do so much (Troon was doing a decent job of lowering costs), but membership looks like lemming run at a cliff.  I think this one looks like it could go on for years and that strategy only plays to the town's hand. Remember that if the land goes fallow, ED will likely trigger. Who wants to deal with such a headache, especially in a time when it's no longer economically feasible to anticipate a timely and acceptable return on investment?

 



 

[archie_struthers]

 

Here we go .... this is going to keep happening guys , and NJ taxpayers can't keep bailing them out ...there isn't any money left!

[Matt_Ward]

Steve:

The nuclear bomb rests with the taxpayer jurisdictions -- they can move ahead and condemn the property through emminent domain.

I think Kemper has done well thus far with Uniion County - check out the new practive area and clubhouse plans. I could see them being interested in moving ahead on this front.

Archie:

Before you do a Linda Blair on this thread too -- I envision a public / private partnership to get things rolling.

[Mark McKeever]

Steve,

My "Donald" remark was way, way tongue-in-cheek!

Mark, yes, the island green is all Tilly. Here is a 1925 photograph of it:

Very neat Phil.  Thanks for posting the photo!

Mark

[Steve Lapper]

Matt,

   Procedurally, they can't declare ED without cause. It will happen if the impasse between club, lender and potential buyer(s) allows the ground go fallow. Getting a management firm to come in and stabilize a property isn't the issue. All the Kempers and Troons and good intentions of the the County won't put this egg back together by that time. Archie isn't wrong here. This is a prime example of letting a failure remain a failure....shame on the club for borrowing more than they could handle and shame on the lender for taking this type of risk without understanding the entire picture.

   While this might seem heretical on this venue, I view this as a positive. A culling of some of the area's otherwise insolvent private clubs will only strengthen the hands of those surviving. Over the long haul, that's a positive for this regions geographical state of the game.

 

[archie_struthers]

 

hey matt , now you are getting good , the Linda Balir thing was hilarious..you must be talking to my golf buddies.

As to the golf course for sale ...if private guys don't buy it , it's not worth buying !  lLet a banker take one on the chin for once...

[SL_Solow]

This one must really be in bad shape.  With interest rates as low as they are, Bankers are kicking bad deals down the road so long as they can get some debt service hoping for a sale after recovery begins.  Absent a viable buyer, the lenders are taking the properties in lieu of accepting an extremely low offer at foreclosure and are trying to run them as public facilities on a break even operating basis, again hoping to sell on the uptick.  If the property cannot be used for housing either because of zoning restrictions or lack of demand, then theoretically the price will eventually drop to where an operator should be able to make a go of it with a course.  But if there exists an oversupply then eventually the property may go dormant leading to some form of state action.  Now there are numerous courses that are in one of the earlier stages.  It will be interesting to observe which way they go.

As an aside, a few operators are trying to use Chapter 11 to reduce the bank debt and then reorganize with a lower overhead.  A very tricky proposition, particularly if the property is the only substantial asset of the owning entity.

[PThomas]

Here we go .... this is going to keep happening guys , and NJ taxpayers can't keep bailing them out ...there isn't any money left!

saw the NJ gov on 60 minutes last nite....is he as tough as he talks about the budget??

[Matt_Ward]

Paul:

The short answer is ... NO !

As an elected official the Governor talked about mounting pension problems -- total unfunded liabilities in the State of NJ has now exceeded $87 billion. When Christie took office he inherited a $11 billion shortfall which he lets everyone knows whenever possible. So what did he do on the pension situation -- he punted the ball further down the road by not contributing one penny to the $3.1 billion that the state owes. On the local level -- 87% of our municipal increase from last year had to go to this specific area. Want to know how thrilled we and others are of the Governor's courage on this topic. 

Let me also point out that Christie used the teacher's union whenever possible to highlight their inability to get the job done educationally. He often forgets to mention that in NJ the average salaries for police and fire is at the top of the scale when compared nationwide. The Governor has selective memory in picking his battles.