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Jon Wiggett

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The Morals of a GCA
« on: March 24, 2016, 04:35:10 AM »
We often hear about whether a developer or GCA should take a moral position when it comes subjects such as the environment but what moral responsibility does/should a GCA have towards a client when it comes to finance?

For a financial/business advisor it does not look good if half the businesses they were involved in go belly up but this does not appear to be the case in GCA. So, if it is apparent to a GCA that a prospective client has the money to pay his fee but the facility he wishes to build has no chance of success should he/she warn the client? Refuse the contract? Keep quiet and take the money? Also, would such a decision be affected by who the client is? Is the attitude the same if it is an avid golf fan desperate to have their own course or a corporation with gazillions in the bank?

Jon
« Last Edit: March 24, 2016, 03:53:46 PM by Jon Wiggett »

Tom_Doak

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Re: The Morals of a GCA
« Reply #1 on: March 24, 2016, 05:28:16 AM »
Jon:

I've thought about this a lot over the years, and come to the conclusion that it becomes our business when the client asks our opinion on the matter.  Until then, it's their money and who are we to question their motives? 

Some have been hurt in the confusion
I do remind every client there is a big difference between the golf course construction budget (which some architects talk about) and the total cost including grow-in, maintenance building, equipment, architects fees, etc.

BCowan

Re: The Morals of a GCA
« Reply #2 on: March 24, 2016, 07:11:01 AM »
As a financial/business advisor it does not look good if half the businesses they were involved in go belly up but this does not appear to be the case in GCA. So, if it is apparent to a GCA that a prospective client has the money to pay his fee but the facility he wishes to build has no chance of success should he/she warn the client?

Jon, this is very good stuff and I'm curious how Archies answer this.  I'm curious as to how many Archies learn the market they are in as in what type of course already exist.  Private (what type), public (what type).  I would hope that the Archie is helping said owner with lowering costs such as Maint. building and other important must haves.  I'd actually love if Tom or someone else wrote a book about dealing with course owners without using their name of course and or anonymous courses.  Do Arhcies ever suggest certain concepts to help owner achieve a niche?  TD has been saying for some time that he never runs into a client who wants a Common Ground type of model.  It seems as though desire for Top 100, empty parking lot, or Retail golf is the rage. 


 Also, would such a decision be affected by who the client is? 
Is the attitude the same if it is an avid golf fan desperate to have their own course or a corporation with gazillions in the bank?

Good stuff Jon, I'm curious myself. 

Mike_Young

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Re: The Morals of a GCA
« Reply #3 on: March 24, 2016, 07:50:52 AM »
Jon,
I agree with TD post#1 in most cases. 

Over the last 25 years the initial culprit was often the appraiser writing the feasibility study.  Now don't go off and say all appraisers are bad dudes.  they are not but I have seen enough of the studies  to know which ones were just copying the figures from 5 miles down the road.  40,000 rounds was standard in many around the Atlanta area for years. 

Many of the projects that had issues and failed would not have failed in the developer had paid down the golf portion of loans with the increase in lot value it created.  This was often not done and the exit strategy was to fund the shortfalls of the golf with the continued lot sales until enough lots were sold and the course could be given to the property owners. 

But the trap I think could have been avoided was often the signature designer maintenance budgets not construction budgets.  Developers would see that spending 20 mill for a golf project when they could sell 30 lots per hole at over $150,000 per lot was peanuts but so often the maintenance was never discussed.  The signatures knew that the project of the day brought them tomorrow's project.  The entire industry took the "excess" afforded by these big projects and tried to make it the norm for all courses whether it be greens construction , cart paths or irrigation.

A signature once told me when I was starting that my goal should be to work towards higher and higher construction budgets if I wanted to be successful. 
"just standing on a corner in Winslow Arizona"

Scott Weersing

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Re: The Morals of a GCA
« Reply #4 on: March 24, 2016, 08:00:19 AM »



I would think if was an architect that I would have to believe some of the assumptions that will make the course viable. I have to believe that the owner has enough money or credit to complete the course. I have to believe that there is a market for the type of course that the owner wants me to build. I would not assume anything the owner says about wetlands on his property but rather check with the authorities. I would not assume the owner would know anything about flooding and drainage, or wind direction.


I wonder how much due diligence I would have to conduct before agreeing to design a course

Jeff_Brauer

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Re: The Morals of a GCA
« Reply #5 on: March 24, 2016, 08:03:16 AM »
The safest "moral" play for anyone giving an opinion to a potential golf owner is "Don't do it."  80% of new businesses fail before 5 years, and golf courses probably beat that average, but many fail under the first and second owners.  For most of history, it hasn't been a great biz, and many courses wouldn't make it without public or developer subsidy.

Financial success depends on so much beyond the architect's control - marketing, advertising, maintenance levels, etc. etc. etc.  Traditionally, architects have no legal responsibility for financial success, and I do have a clause in my agreements to that end.  The old saying is the Owner owns, and the designer designs.  (And the builder builds......)  and frankly, there isn't enough money in architecture to take an owner's risk.  Sometimes we get invited in as partners, and then we do take Owner's risk, too.  (It's said every architect ought to do this at least once to see if they would design any differently when its their own money)

Technically, when I sign a contract for design, I have no opinion on the owner's business plan.  And to some degree, why should I?  For example, Mike Keiser had plenty of negative opinions on his business model (including from Kemper Sports, his business side guys)  Then there is the old story about the college prof who gave an F to a student who proposed a Fed Ex type company, but he went out and proved them wrong.

The trend (for a long time) is to bring in separate business advisors, because the gca has an inherent conflict of interest in recommending more and more construction (to raise his fee or reputation).  Whether the direction comes from the Owner and their business convictions or its business consultant,  the architect's obligation is to work within the program set out for him, and give the best design possible, including future maintenance costs, views to sell houses, or whatever.  Of course, that varies all over the map, so you can't say we should always do it for the least cost or easiest maintenance, but 80% of courses, this would be the goal. 

Obviously, there is an overall obligation to;

Design to a level of care normal for the industry
Give honest answers on any issue, as you see them, including:
   Total cost
  Cost/Value relationship (i.e., the probable relationship between lower budget and bigger risk, like less sprinklers,    drainage, sod, etc. when they get a 15" rain during grow in). 
   Advising owners not to sidestep environmental regulations or other laws
   Avoid conflict of interest, like having an undisclosed financial interest in a supplier, etc. 
 
Having said all that I had a situation just this week where the biz guy was advocating for all sorts of upgrades to enhance the possibility of raising greens fees and rounds, and I had a frank disagreement with him in front of the Owners rep, saying we ought to do less because it just seemed like there wasn't much potential in that market. 

So, yes, as a practical matter I do get asked business related questions, especially as to whether renovations pay back. And of course, the answer is they often do, if everything goes right, but sometimes don't.  Even then, there are no clear answers as to whether new infrastructure or new feature design helps a course survive and thrive more.  I give my best answer, but other architects would give a different and equally sincere answer in the same situation, so its hard to say who is more morally correct on those kind of value judgments.

Looking back, its odd how little that was asked of new courses in the go-go years, but then again, NGF told us we couldn't build enough of them back then)  And for a while, they looked right, but then they didn't.......

And, overall, I agree with Scott that if something just feels wrong in my gut, I would tend to walk away, both for moral and financial reasons.  They say the best way to avoid lawsuits and bad projects is to avoid bad, inexperienced and under funded clients.  The chances of any of those projects working out well is very small and you learn to avoid them.

Jeff Brauer, ASGCA Director of Outreach

Ian Andrew

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Re: The Morals of a GCA
« Reply #6 on: March 24, 2016, 08:22:15 AM »
One of the courses built on PEI cost the family everything. It never should have been built, there wasn't the market nor did the family have the wealth to make this work. The owner killed themselves.

I think you do have a moral obligation to understand your clients ability to make a project succeed. This has nothing to do with golf architecture and everything to do with humanity. I'm determined never to build something at someone else's expense.

Not every situation is obvious, but you usually know, it doesn't take much conversation to figure things out.
With every golf development bubble, the end was unexpected and brutal....

Ian Andrew

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Re: The Morals of a GCA
« Reply #7 on: March 24, 2016, 08:30:50 AM »
It's funny, since 2008, I have found that second tier private clubs are far more willing to discuss how to make the golf club a better business models through architectural decisions. And no, this doesn't affect the quality of the product, because more often than not it begins with the reduction of modern over-bunkering added by proceeding decades of green's committees.

I've always believed than unless a club has financial strength, there is a responsibility for me to help them be a better businesses and survive the harder times. I must cost myself work, but aren't we entrusted to give them the best advice rather than represent our best interests?

With every golf development bubble, the end was unexpected and brutal....

Jeff_Brauer

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Re: The Morals of a GCA
« Reply #8 on: March 24, 2016, 08:44:00 AM »
Ian,

Have had a lot of those bunker reduction clients myself and it always seems like an opportunity to improve the design through subtraction.  Like you, most of my clients are second tier (public or private) where costs have traditionally needed to align with revenues.  And, I agree that at most places, lower cost is better (although there is some balance between a bit more upfront to reduce long term costs)

When you give an extreme example of a client that killed themselves over a bad deal, I would say that is far from typical.  Most business people have a far less dramatic exit strategy should the business fail.  That said, there was always some evidence that certain projects couldn't be built.  In the US, it was usually cities going to one of those design build companies that relied on junk bonds to finance their new city course, or use the short lived USDA loan program that could sometimes be applied to golf.  Or, if they went to one of those promotional conferences that told Mom and Pop types how to get in the "lucrative" golf biz, for a fee.

We have all seen the feasibility studies Mike alludes to where the consultant's implied consent is to write whatever the owner wanted written.  Of course, there were many written the other way, with contingency upon contingency and very conservative assumptions made which only served to drive down the budget allowed, meaning there would most certainly be more corrective construction at greater cost later.

Like you, I walked away from some of them.  It was easier back then....so many were getting funded we had the work to pick among the better projects.  I do understand there are projects and architects who need work where that decision isn't always easy.
Jeff Brauer, ASGCA Director of Outreach

Mike_Young

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Re: The Morals of a GCA
« Reply #9 on: March 24, 2016, 09:09:49 AM »
Jeff mentions the NGF in his post above.  Why does it still exist?  It's a classic example of BS being funded and supported by various golf associations and fraternities because everyone else does it.  Just this week I got an email asking to answer questions regarding public golf.   I don't answer any of their request anymore.  It provides nothing and if it did we would not know if it were correct.
"just standing on a corner in Winslow Arizona"

Jeff Taylor

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Re: The Morals of a GCA
« Reply #10 on: March 24, 2016, 09:11:47 AM »
"As a financial/business advisor it does not look good if half the businesses they were involved in go belly up"

Comparing your professional responsibilities with that of the GCA is the fundamental flaw with your question. Given all of the money decisions that must be made when building a golf course or club, you ask if the architect should be the voice of reason? There is no GCA equivalent to FINRA nor should there be.

Ian Andrew

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Re: The Morals of a GCA
« Reply #11 on: March 24, 2016, 09:42:22 AM »
I do understand there are projects and architects who need work where that decision isn't always easy.

I have brought this up a few times with people in the ASGCA. When you have lots of work or security at home you can make all sorts of moral, ethical or legacy based decisions. You can avoid all the grey areas every day. So you do.

When you are short and your livelihood is on the line, you have to make completely different choices and architects should be judged by the circumstances they find themselves in and we need to be careful.

There's no excuse for a busy architect who solicits work from others, but some of the biggest are the worst offenders on that end. And they do it with a smile and shrug their shoulders saying, "you would have never got it off the ground anyway."
With every golf development bubble, the end was unexpected and brutal....

Jeff_Brauer

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Re: The Morals of a GCA
« Reply #12 on: March 24, 2016, 09:51:24 AM »
Jeff mentions the NGF in his post above.  Why does it still exist?  It's a classic example of BS being funded and supported by various golf associations and fraternities because everyone else does it.  Just this week I got an email asking to answer questions regarding public golf.   I don't answer any of their request anymore.  It provides nothing and if it did we would not know if it were correct.

Interesting take.  I think it made sense when it was founded, as a clearing house of info and general support for an unorganized industry (thinking 1950's golf)  Over time, its newsletter ceased when Golf Course News (now Golf Course Industry) did that better.  Now, there are several private golf feasibility consultants and no need for that arm either, but they are still a big name that many go to.  There is probably a need for someone to keep industry stats, and I have no idea how accurate they are, compared to "what they should be."

They used to do a course opening/closing running list that was laughably inaccurate, because then as now they relied on architects to supply the data on new projects.  Some wouldn't put them in for fear of losing the project, others put in anything they had to look busier.  I recall one long done 4 hole remodel from a lesser known architect that stayed on that list as a "new course" for decades.......
Jeff Brauer, ASGCA Director of Outreach

Jonathan Mallard

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Re: The Morals of a GCA
« Reply #13 on: March 24, 2016, 12:52:39 PM »
Jon:

I've thought about this a lot over the years, and come to the conclusion that it becomes our business when the client asks our opinion on the matter.  Until then, it's their money and who are we to question their motives? 



Tom,


Does/should this change when the client is a public entity dependent on tax collections for revenue? Case in point, the Buena Vista fiasco I've posted about.

Jon Wiggett

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Re: The Morals of a GCA
« Reply #14 on: March 24, 2016, 04:02:54 PM »
Thanks for the responses gentlemen. I will need to reread some of them before I write anymore.

"As a financial/business advisor it does not look good if half the businesses they were involved in go belly up"

Comparing your professional responsibilities with that of the GCA is the fundamental flaw with your question. Given all of the money decisions that must be made when building a golf course or club, you ask if the architect should be the voice of reason? There is no GCA equivalent to FINRA nor should there be.

Jeff,

I need to make clear I am not a financial advisor but having read what I wrote I can see how it reads that way so I have amended it to make it clearer. Sorry for the confusion.

One point I was making was more do you think it is a good advert for a GCA to be seen to have a high % of their projects go belly up? The other was that many developers do not really understand the golf industry and build courses that are never going to succeed. Is there not an onus on anyone seeing this to advise?

Jon

Kalen Braley

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Re: The Morals of a GCA
« Reply #15 on: March 24, 2016, 04:27:48 PM »
Like Jeff said,

Most businesses fail before they even really get off the ground.  Does this  mean all of us mention this in an interview with a prospective new company and have a moral imperative to not take the job?  Or do we hold GCAs to a different standard.

Mike Nuzzo

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Re: The Morals of a GCA
« Reply #16 on: March 24, 2016, 04:31:19 PM »

Jeff
Your quote

Ian,
Have had a lot of those bunker reduction clients myself
 
does not mean the same thing as Ian's quote:


[/size]how to make the golf club a better business models through architectural decisions. And no, this doesn't affect the quality of the product, because more often than not it begins with the reduction of modern over-bunkering added by proceeding decades of green's committees. [/size]
Thinking of Bob, Rihc, Bill, George, Neil, Dr. Childs, & Tiger.

Jeff_Brauer

  • Karma: +0/-0
Re: The Morals of a GCA
« Reply #17 on: March 24, 2016, 04:37:48 PM »
Mike,

When clients ask me to do bunker reductions, it is with an eye to the business model including maintenance cost reductions and increasing speed of play.

Many times, I am working for my own old clients calling me back to tweak the course while respecting the original design, so I guess you would call that modern over bunkering......I do!  Even if not done by previous greens committees.  And, I agree with Ian, even when changing my own designs.  Really, the green and fw ought to be the visual target, but at some point in the 90's (especially in housing projects) the bunkers became the dominant visual element for both housing and to wow raters.  Given a "mulligan" on such bunkering, and a new situation (then, a course looking for notoriety, now an every day course) there are many reasons, business, artistic, and strategic, to reduce bunkering and make the course better.

Sorry if not all of that was clear in my response, but from my perspective, I was and am agreeing with Ian and it is really the same thing.
Jeff Brauer, ASGCA Director of Outreach

Jon Wiggett

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Re: The Morals of a GCA
« Reply #18 on: March 24, 2016, 05:51:53 PM »
Like Jeff said,

Most businesses fail before they even really get off the ground.  Does this  mean all of us mention this in an interview with a prospective new company and have a moral imperative to not take the job?  Or do we hold GCAs to a different standard.

Kalen,

that is not what I said. If everybody interpreted your line that way then there would be no sport at all. That most new businesses do not survive the first 5 years is true but a lot do not stop trading due to failing but due to a myriad of reasons.

Jon
« Last Edit: March 24, 2016, 06:48:01 PM by Jon Wiggett »

Kalen Braley

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Re: The Morals of a GCA
« Reply #19 on: March 24, 2016, 11:59:05 PM »
Like Jeff said,

Most businesses fail before they even really get off the ground.  Does this  mean all of us mention this in an interview with a prospective new company and have a moral imperative to not take the job?  Or do we hold GCAs to a different standard.

Kalen,

that is not what I said. If everybody interpreted your line that way then there would be no sport at all. That most new businesses do not survive the first 5 years is true but a lot do not stop trading due to failing but due to a myriad of reasons.

Jon

Jon,

That's why I said what Jeff Said, not what Jon said....   ;)

Jon Wiggett

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Re: The Morals of a GCA
« Reply #20 on: March 25, 2016, 03:41:55 AM »
Like Jeff said,

Most businesses fail before they even really get off the ground.  Does this  mean all of us mention this in an interview with a prospective new company and have a moral imperative to not take the job?  Or do we hold GCAs to a different standard.

Kalen,

that is not what I said. If everybody interpreted your line that way then there would be no sport at all. That most new businesses do not survive the first 5 years is true but a lot do not stop trading due to failing but due to a myriad of reasons.

Jon

Jon,

That's why I said what Jeff Said, not what Jon said....   ;)

Kalen,  still wrong though even if Jeff said it ::)

Tom_Doak

  • Karma: +2/-1
Re: The Morals of a GCA
« Reply #21 on: March 25, 2016, 07:05:08 AM »
I do understand there are projects and architects who need work where that decision isn't always easy.

When you are short and your livelihood is on the line, you have to make completely different choices and architects should be judged by the circumstances they find themselves in and we need to be careful.


Ian:


I've been lucky that I have never been in the position of having to do something against my conscience.  But your definition of ethics is a bit more changeable than mine, judging from the line above.  I guess it's not as bad as unnecessary surgery in medicine -- nobody's life is on the line in the golf business -- but there is a lot of reconstruction work now being driven by the fact that there are a lot of golf course architects with nothing to do.


The silver lining is that it will give the next generation of architects plenty of stuff to fix later.

Tom_Doak

  • Karma: +2/-1
Re: The Morals of a GCA
« Reply #22 on: March 25, 2016, 07:15:18 AM »
Jon:

I've thought about this a lot over the years, and come to the conclusion that it becomes our business when the client asks our opinion on the matter.  Until then, it's their money and who are we to question their motives? 

Tom,

Does/should this change when the client is a public entity dependent on tax collections for revenue? Case in point, the Buena Vista fiasco I've posted about.


Good question.  I don't know what I would have done in a situation like that ... it's not the sort of job we are approached about.  On the one hand, the town has the ability to pay [via taxes] so that's only an issue to the extent that you think we should protect the taxpayers from themselves ... assuming they approved the bond issue.  I wonder if the architect attended a public hearing on the matter?


I did once have a consulting job where I did not know the green committee and irrigation designer had proposed a $3 million irrigation system, until 30 minutes before the presentation to the membership.  I looked at the green chairman and said, "You'd better hope no one asks me whether I think this system is appropriate."  Of course, they made sure no one did.


Tom_Doak

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Re: The Morals of a GCA
« Reply #23 on: March 25, 2016, 07:33:34 AM »
Also, would such a decision be affected by who the client is? Is the attitude the same if it is an avid golf fan desperate to have their own course or a corporation with gazillions in the bank?


Jon:


I hadn't seen this part of your question the first time or I would have started there.


The client who actually taught me what my responsibility was on the financial end of things, was a billionaire, Julian Robertson.  When we were building Cape Kidnappers, I told him I had decided not to build an alternate tee on a hole because it would require an expensive bridge, and he stopped me. 


He said he'd hired me to build a great course, and it was up to him to worry about the money.  In that case, a $50,000 bridge was peanuts in the context of a $40m or $50 million project ... and if I started talking about the money, he said that was a signal that I was no longer focused on making the best course possible.  So, I told him I didn't think the tee made the hole any better, and he said okay, and we didn't build it.


Before that I hadn't realized that trying to save the client money could be interpreted as settling for less than the best design, but people with money often hear the latter.  And, of course, that's not something you want them to think.  So, I don't usually talk about the money until they ask.  Most ask pretty quick -- they want to know how much it's going to cost before you even have a layout! 


You generally get a sense for their financial situation when it comes time to negotiate the design fee. 


In an ideal world, a portion of everyone's design fee would be taken over the long term, so that the architect has a real vested interest in building a successful project.  But as Jeff explained, the success of the course is the result of many factors that are out of our control, starting with the general twists and turns of the economy, and the owner's ability to manage a business.  Plus not every golf course developer is someone I'd want to be partners with ... sometimes it's difficult just to get paid the full amount of our contract, much less trying to collect from them years afterward, when they don't need anything more out of us.  It's a tough business sometimes!

JMEvensky

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Re: The Morals of a GCA
« Reply #24 on: March 25, 2016, 10:27:21 AM »
 


In an ideal world, a portion of everyone's design fee would be taken over the long term, so that the architect has a real vested interest in building a successful project.





Are there any arrangements like this? Maybe a 5 or 10 year payout combined with a club's Master Plan for the golf course would seem an ideal situation for the club members.

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