Wow, that is a lot of rounds. $2MM in annual revenues on a 12 acre patch of land seems pretty successful indeed.
Where does it say $2MM in annual revenue? Is it by multiplying number of rounds by $50? If that's the case you forget about all the folks who pay nothing, like replays, members, juniors, employees...
Yes, I just did the calc that you suggested and didn't realize that they included free rounds in their figures (but you're right that they probably did). Maybe that knocks it down to $1.5MM. My point is just that it must be relatively profitable on a per area basis. It's basically the area of only 1 to 1.5 golf holes on a typical course.
What was on that land previously? Was it part of the practice facilities, or just unused ground?
Much of it was the old first hole of #5. Formerly, you would play the first hole, then cross the road and play the second hole, which is now the first. They added a new 18th hole next to the road, running back away from the road crossing, clubhouse, and the former 18th/now 17th green.
While the new 18th is maybe just a tad shoehorned, whoever did it did a nice job; good, wide Pinehurst style landing area, then a pretty demanding second shot to a relatively demanding green. The only problem I found with all of this is that it confused the heck out of my GPS watch (and me!) until I figured out to just advance the hole number by one.
In any case, it's a good trade, IMO; The Cradle is that much fun. The only drawback now is that The Cradle is just incredibly crowded, which is both a testimony to it's success AND too bad for people that are only in Pinehurst for the day and don't get to finish off the day with a round on The Cradle. Oh, well...