Matt,
Here is the Bill Huffman article from AZ AVid Golfer:
By Bill Huffman : Published for AG December
The future of AZ golf
“There are at least a half dozen courses right now that will close in the next two years and become something else, like houses.” – Tom Patrick
A recent study by the National Golf Foundation entitled, “The Future of Golf Participation in America: 2010-2020,” got me thinking about what the next decade holds for Arizona. Even though desert golf has done better recently than most areas of the country, and even though the NGF says golf, in general, will remain “flat” for the next 10 years, where are we headed?
Trust me, these are tricky times we live – and play golf – in.
Just look at the past, or ever since Arizona became one of the top five golf destinations in the world. In every way our High Sonoran stock has risen and fallen like the market itself. Just check out the last three decades and you’ll plainly see that roller-coaster pattern, as the 1980s were a bust, the 1990s a boom and the 2000s a bit of both.
So what’s in the crystal ball? For that I turn to my personal golf swami, Tom Patrick, a.k.a. the “E.F. Hutton of Arizona golf.” Unlike a lot of his peers, the former founder of the Golf Industry Association and ex-president of SunCor Golf always tells it like it is.
Plus, Patrick has seen both sides of the fence, as he was a “fixer” in the 1980s with his Sunwest Golf, repairing financial problems at places like Estancia, Scottsdale Country Club and Tatum Ranch, while also building high-end courses in the 1990s like SunRidge Canyon, StoneRidge and The Sanctuary. But a year ago, with one year left in the schizophrenic-like 2000s, Patrick had had enough and retired.
“It’s been a year, and I haven’t done a thing except spend time with my nine grandchildren,” Patrick said. “I promised my wife that I wouldn’t get back into golf for at least a year and that deadline is up Dec. 22…
“Lately, I’ve had some guys call me who wanted to start up another golf management company. And, truthfully, I’ve been thinking about it.”
Yes, it’s a tough habit to kick even if Arizona’s golf industry has witnessed 17 foreclosures in the last few years. The amazing part of that scenario is that all 17 are still up and running.
According to Patrick, those BK courses are actually in better shape than many that have never closed their doors.
“If they bought it for $1 million or $2 million, and it originally cost $10 million or $12 million, they aren’t in it at the same price and that allows them to make ends meet,” Patrick noted. “Still, how much would you pay to lose money, because a lot of them are never going to be profitable.”
Patrick, who once told me Arizona golf was overbuilt by 20 courses, now says it’s more like 60. And while most of Arizona’s 360-some have remained open even in tough times, that’s about to change, too.
“There are at least a half dozen courses right now that will close in the next two years and become something else, like houses,” Patrick said. “I’d give you the names, but you’d publish them.”
Patrick also predicted that golf course properties would continue to plummet in value, like the $2.6 million that was paid recently to purchase SunRidge Canyon out of receivership.
“Yeah, we built that course for $10 million, including the clubhouse, simply because I knew how to build them for a lot less than everybody else,” he said with obvious pride.
Patrick also warned of the local market collapsing, pointing out that in the past two years the Arizona resident had been courted heavily in an effort to offset the lack of tourist golf. His point being that the state’s $1 billion budget shortfall was going to claim a lot of jobs and ultimately discretionary income that goes toward golf.
“But the biggest problem staring us smack in the face is water. No question,” he said. “With Lake Mead in the early stages of a drought that is expected to peak by 2020, and with the potential for CAP water and effluent (non-potable water) to skyrocket, that’s the No. 1 problem facing Arizona golf that has yet to be resolved.”
Like I said, these are tricky times. Good thing we’ve got wonderful weather, a pristine portfolio of courses and Tom Patrick on our side.
Bill Huffman has covered golf in Arizona for 25 years and wrote the book “Arizona’s Greatest Golf Courses.’’ He can be heard on Backspin The Golf Show on XTRA Sports 910 every Wednesday (6-7 p.m.) and Saturday (9-11 a.m.).