Golf Club Atlas
GolfClubAtlas.com => Golf Course Architecture Discussion Group => Topic started by: Rick Sides on September 24, 2013, 07:11:17 AM
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So I have a general question for the group. Recently played a nice upscale private club and couldn't help but wonder, roughly how much does it cost to build an upscale club from the ground up? Meaning cost like land, design, equipment, clubhouse, etc. Obviously this figure can vary greatly.
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Rick:
Of course it varies tremendously from one property to the next, but for a rough estimate:
Golf course $5 million
Clubhouse $5 million
Other stuff $3m - 5 million (maint. bldg, maint. equipment, grow-in costs, design fees, etc.)
Land cost ???
That's $15m - $20 million. You'd have to sell 400 memberships at $50,000 to get it back. That's why not a lot of these clubs are being developed nowadays.
Note that it doesn't have to be so expensive ... I've built great golf courses for $2.5 million if the soils and topo are right. But you can't use those as a realistic estimate, and even then, sadly, the golf course cost is much less than 50% of the total investment.
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Tom,
What about linksland in the UK and Ireland and a nice but not OTT clubhouse - presumably less than the above figures? And then the annual cost of maintaining them to the level of, say, a Renaissance club?
I've always wondered how much it would cost to get that Kilshannig Cross development off the ground if I ever came into enough money and the other issues which prevented the project getting off the ground didn't exist...
Cheers
B.
Brian - don't forget the line item 'ten years of planning lawyers' fees' for such projects!
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Tom,
What about linksland in the UK and Ireland and a nice but not OTT clubhouse - presumably less than the above figures? And then the annual cost of maintaining them to the level of, say, a Renaissance club?
I've always wondered how much it would cost to get that Kilshannig Cross development off the ground if I ever came into enough money and the other issues which prevented the project getting off the ground didn't exist...
Cheers
B.
Brian,
you could build very inexpensively on links/heathland ground, especially if you kept irrigation basic and did not move a lot of dirt, probably in the order of 0.7-1.0 mil euro, and still have a very good course.
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Tom,
That's exactly what I was thinking about while playing the club the other day. I wondered how in the world the club could not only sustain daily costs, but also I can't imagine the cost of construction, land, etc.
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Brian,
you could build very inexpensively on links/heathland ground, especially if you kept irrigation basic and did not move a lot of dirt, probably in the order of 0.7-1.0 mil euro, and still have a very good course.
Frank:
Those are exactly the sort of numbers that get guys like Brian to lose their shirts trying to develop a course. As Adam says, the lawyers' fees on a new links project in Ireland would probably exceed that number all by themselves ... certainly for Kilshannig anyway.
Trying to grow in a course with as little irrigation as you are including in your number is fine, if you're willing to wait two or three years for the course to open if the weather is not helpful.
What sort of budget did you have for de Swinkelsche? How much irrigation did that include? And what was the land cost and clubhouse cost and maintenance building and all the rest?
We added the second course at Dismal for about $2.5 million, but it's a lot easier to do when the clubhouse and maintenance facility are already in the ground courtesy of a previous owner.
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The biggest cost differences come from fine dining (kitchens can be over $1M themselves) the clubhouse, maintenance area, staff, equipment and operations budgets inside and out.
There are some things you can put in a golf course that make it more expensive, but in general, building 18 holes cost about what it cost in a given area. I have built the nicest upscale public golf course in town for what another architect on course next door spent on a $30 muni.
Some golf course extras are fancier bridges, textured pavement (and wider pavement) expensive shelters and halfway houses. For golf itself, these things can raise costs:
Building 8K USGA greens vs. 6K greens .
Wall to wall irrigation with part circle heads, etc.
A design decision to use hundreds of bunkers or large waste bunkers adds cost in a hurry,
Most fine clubs want the best bunker sand, which often is shipped by rail, barge and truck at a cost of well over $100 per ton.
Bunker liners
Fans, Sub Air Circulation to keep bent in the south
Solid sod for quicker opening (although you can also argue that you start getting revenue sooner, so its close to a net wash)
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Clubhouse $5 million
Why does the clubhouse have to be this expensive? How big of a club house are you talking about?
Chechessee Creek has about the most perfect clubhouse I've been into for a modern club at it is 9,200 sqft. Are you saying it is $500/ft to build something like that? If so, perhaps one should bid out the construction a little better.
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If you build it, they will come.
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Jeff,
Is there any turf-quality advantage/disadvantage to sodding? Obviously on Day 1 the difference in sod and bare ground is huge ;-) but I mean a year down the road is sodded turf any better or worse than growing grass in place?
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JC, I have seen some $1M kitchens. Add in fittings and furniture and artwork from Europe or what have you, clubhouses can easily get to $5M. At that point, many upscale club members, who might pinch every penny in their businesses, get extravagant if the goal is the best club in town.
I think basic construction is still around half that for a nice clubhouse, or at least I saw an estimate the other day of $250 per LF. Residential level construction (good for most smaller clubhouses) can still be found for around $100 SF, at least here in TX. I bet that varies quite a bit.
One thing that won't vary is a pro forma that tells you that the huge, 50,000 SF clubhouse (even 25K) will eat your lunch well before you finish yours in their dining room....... It happens nearly every time.
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Brent,
There are some advantages to full sod.
First, its the best insurance policy against heavy rains and half a million in reseeding costs.
Second, you can tell the quality difference for many years between sod and seed.
Better environmentally (reduces siltation and runoff)
Third, grow in is nearly guaranteed (okay, maybe 1A as an off shoot of the first point)
But, there are some down sides, including needing a sod that has the same soil as yours. If you get a clay based soil that is heavier than your soil, you will spend years aerifying and topdressing to try to get the water through. Some areas have nothing but peat soil sod, which doesn't work over sand capped fairways very well.
The second is cost. Netting seed is very effective and cost about $6K per acre vs. the $14K for solid sod. $8K over 100 Acres or so is not insubstantial to most budgets.
Every project is different, but on most, they always end up adding sod at some point because of its benefits.
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Clubhouse $5 million
Why does the clubhouse have to be this expensive? How big of a club house are you talking about?
Chechessee Creek has about the most perfect clubhouse I've been into for a modern club at it is 9,200 sqft. Are you saying it is $500/ft to build something like that? If so, perhaps one should bid out the construction a little better.
JC: I was figuring a 20,000 to 25,000 square foot clubhouse at $200-$250 per sq ft. I agree with you that's really excessive [and a killer financially], but that's what most people think when they hear "upscale private club". Chechessee is a different animal, being part of a second-home community.
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By my math, doing something Chechessee-esque would run $150-200/ft so ~$1.3-1.8mm. While I still think that is high, I think it is a cap on what would work on a nice, yet not super upscale, private club.
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Jeff:
I disagree with your premise that costs are generally the same across the board. Costs are the same if you build everything to the same standard ... it's the standards that need to change.
I just did a detailed budget for a potential new project in Michigan. Actually we did two budgets so the owner could understand what he was getting into ... one with USGA greens and tees built out of mix and wall to wall cart paths, and one where the greens and tees would be built from native soil and the paths were green-to-tee only and the irrigation spacing was a bit wider.
The two budgets came in at $4.2 million and $2.8 million, respectively. Or, in other words, the "modern standards" cost 50% more than the old way of doing things. And I'll be damned if most golfers would know the difference.
And I disagree about sod too ... my best-conditioned courses today are the ones where we used zero sod in the grow-in process.
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Brian,
you could build very inexpensively on links/heathland ground, especially if you kept irrigation basic and did not move a lot of dirt, probably in the order of 0.7-1.0 mil euro, and still have a very good course.
Frank:
Those are exactly the sort of numbers that get guys like Brian to lose their shirts trying to develop a course. As Adam says, the lawyers' fees on a new links project in Ireland would probably exceed that number all by themselves ... certainly for Kilshannig anyway.
Trying to grow in a course with as little irrigation as you are including in your number is fine, if you're willing to wait two or three years for the course to open if the weather is not helpful.
What sort of budget did you have for de Swinkelsche? How much irrigation did that include? And what was the land cost and clubhouse cost and maintenance building and all the rest?
We added the second course at Dismal for about $2.5 million, but it's a lot easier to do when the clubhouse and maintenance facility are already in the ground courtesy of a previous owner.
I did not include permitting fees, they can be out of this world.
Irrigation depends on the climate, in W Europe I have built courses with no/limited fairway irrigation. No fairway irrigation with pure fescue fairways has a grow in of 1.5-2.0 years, but then you have great turf (I did this on a simple 9 holes course called Land van Thorn in Holland, when I showed it to Brian Schneider when he visited me he said it was one of the best turfs he had ever seen). One row irrigation (like Turfvaert that you saw when you visited) has a grow in of 1.0-1.5 years.
Swinkelsche was built for 2.5 million euro, with 600,000 cubic yards of soil moving and a state of the art 2/3 row irrigation system (on the overview map in the discussion on it you can see the irrigation heads). Clubhouse will probably be another 1.0-2.0 million, maintenance building is converted barn. The land was owned (probably worth 2-3 million).
My main point is that if the landforms are great, you are building on sand, accept occaisional barren fairways in summer and you can live with a normal clubhouse you can still build a great course for little money
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Rick:
Of course it varies tremendously from one property to the next, but for a rough estimate:
Golf course $5 million
Clubhouse $5 million
Other stuff $3m - 5 million (maint. bldg, maint. equipment, grow-in costs, design fees, etc.)
Land cost ???
That's $15m - $20 million. You'd have to sell 400 memberships at $50,000 to get it back. That's why not a lot of these clubs are being developed nowadays.
Note that it doesn't have to be so expensive ... I've built great golf courses for $2.5 million if the soils and topo are right. But you can't use those as a realistic estimate, and even then, sadly, the golf course cost is much less than 50% of the total investment.
So really, the takeaway is if you want 18 tomato cans in the ground a trailer with a microwave and two Toro's you are looking at $20.1M.
This gives some context around the Wisconsin course discussion. I know Jud opined that 20,000 rounds at $150 a head should keep the lights on. Even if Tom or another firm was able to build a great course for $3M, + $2M of equipment and maintenance needs, you'd be looking at an initial outlay of near $25M. I would think a very bare bones maintenance budget (for a course that is commanding $150) would be about $500k. Ignoring lodging or F&B, and add to that a conservative effort for a your golf staff marketing, etc. and that $3,000,0000 revenue likely shrinks below $2,000,000 in a hurry.
Not the type of return people would be lining up to invest in, given potential bad weather could further limit rounds and other unknowns. Now, I'm sure Mr Keiser has it all worked out if they break ground, and land costs could vary a lot, but shows how difficult it is to be successful with a new build today.
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Although, this discussion, along with the pictures of the Medinah redesign really have me thinking about a property that has recently changed hands.
The Rabine Group purchased a far NW Chicago club, Bull Valley, which includes a 37,000 sq foot clubhouse for $1.7M. The land, IMO, has better bones than Medinah #1 did (although the surrounding development, which isn't in play on most holes, would probably prevent as dramatic of a rerouting). Now ignoring the fact that it's likely silly for a "golf only" club to have a 37,000 sq foot clubhouse, with that modest outlay, and the bones that exist, I would think if you could bring in a Doak or a C&C, and turn it into a top notch club for a reasonable cost, you'd be able to pull the additional members needed to make money (or have a great destination resort for day trips from Chicago).
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I wonder what the books look like on some of Trump's newer courses, especially since he (and Keiser) is one of the only developers who seems to be building new, high end courses. He must be supporting newer ones out of pocket, but he must have the breakeven point figured out or he wouldn't keep building. After all, he is a capitalist.
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So really, the takeaway is if you want 18 tomato cans in the ground a trailer with a microwave and two Toro's you are looking at $20.1M.
This gives some context around the Wisconsin course discussion.
Andrew:
I think you misinterpreted something I wrote above. Land costs are not $20m ... I was saying the total would be $20m if you put $12.5m to $15m into the other areas. Land costs vary so much that I just gave it a bunch of question marks.
If the land cost in Wisconsin is excessive, Mr. Keiser will surely not pursue the project. He's just got to get the land owner to understand that. The land value for pulp timber is probably only $1000 per acre up there, which would be $2 million land cost for 2000 acres. That's why the project might be viable. Double the land cost, and the potential return is severely threatened.
Location is critical, but location and land costs are almost inversely proportional. Put it this way -- Medinah can afford to spend more money on the ground they already own than Bull Valley can. But, yes, if you could buy a club for under $2 million and turn it into something special for another $3-4 million, that would have a pretty good chance of being successful. But if it were that easy, everyone would succeed!
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Clubhouse $5 million
Why does the clubhouse have to be this expensive? How big of a club house are you talking about?
Chechessee Creek has about the most perfect clubhouse I've been into for a modern club at it is 9,200 sqft. Are you saying it is $500/ft to build something like that? If so, perhaps one should bid out the construction a little better.
+1 on the Chechessee Creek clubhouse - I really enjoyed my morning at the club and loved the course and experience. I thought the clubhouse fit in perfectly - understated, well-done, and with just enough of the comforts a membership would want without beING over-the-top.
Having had some experiences here, I do think having a small, serviceable, comfortable clubhouse for the membership does a couple of things - hopefully helps drive some additional revenue by increasing dwell time along with having the qualitative benefit of having the membership socialize longer and creating stronger relationships.
Obviously, this needs to be weighted against the cost of building it and operating it - I am guessing that it is a hard question to answer perfectly and one that doesn't have the same answer for every different scenario.
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Although, this discussion, along with the pictures of the Medinah redesign really have me thinking about a property that has recently changed hands.
The Rabine Group purchased a far NW Chicago club, Bull Valley, which includes a 37,000 sq foot clubhouse for $1.7M. The land, IMO, has better bones than Medinah #1 did (although the surrounding development, which isn't in play on most holes, would probably prevent as dramatic of a rerouting). Now ignoring the fact that it's likely silly for a "golf only" club to have a 37,000 sq foot clubhouse, with that modest outlay, and the bones that exist, I would think if you could bring in a Doak or a C&C, and turn it into a top notch club for a reasonable cost, you'd be able to pull the additional members needed to make money (or have a great destination resort for day trips from Chicago).
Andrew,
we are going to see a lot of that happening here in Europe, because in effect you get the property at a distressed price, and can start again, but without lengthy permitting issues, which in Europe is key since it saves you a 5-10 year development time.
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So really, the takeaway is if you want 18 tomato cans in the ground a trailer with a microwave and two Toro's you are looking at $20.1M.
This gives some context around the Wisconsin course discussion.
Andrew:
I think you misinterpreted something I wrote above. Land costs are not $20m ... I was saying the total would be $20m if you put $12.5m to $15m into the other areas. Land costs vary so much that I just gave it a bunch of question marks.
If the land cost in Wisconsin is excessive, Mr. Keiser will surely not pursue the project. He's just got to get the land owner to understand that. The land value for pulp timber is probably only $1000 per acre up there, which would be $2 million land cost for 2000 acres. That's why the project might be viable. Double the land cost, and the potential return is severely threatened.
Location is critical, but location and land costs are almost inversely proportional. Put it this way -- Medinah can afford to spend more money on the ground they already own than Bull Valley can. But, yes, if you could buy a club for under $2 million and turn it into something special for another $3-4 million, that would have a pretty good chance of being successful. But if it were that easy, everyone would succeed!
Thanks for the clarification, and yes I did. Not to mention the quick calculation in my head of 200 acres * $10,000 an acre added an extra zero, and that makes much more sense.
If land can be had for 1/10th that price, and a much bigger parcel can be acquired that really changes things.
On the Bull Valley thought, the big question for me is can it be turned into something truly *special*, and how much will the clubhouse kill you. I had a friend that wanted to get some people together to buy it, and I kept saying as it is, you just can't cash flow it. I wasn't creative enough to think outside the box until I saw your renovation work and this thread (not to mention, I really don't have the money to chase a project like that).
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Obviously location has a huge effect on the cost of land etc, but to what extent does the type of land under consideration effect the overall cost? For example, would sandy/not much use for agriculture kinda land, the kind seemingly preferred for golf, be cheaper than buying farmers fields or, once the rumour was out in the market place that the land was wanted for golf purposes, would a premium be added to the value/price of the same piece of land? I'm speaking UK/Europe here.
In addition, as a ballpark figure, how much does permitting issues cost, again in UK/Europe?
All the best.
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Obviously location has a huge effect on the cost of land etc, but to what extent does the type of land under consideration effect the overall cost? For example, would sandy/not much use for agriculture kinda land, the kind seemingly preferred for golf, be cheaper than buying farmers fields or, once the rumour was out in the market place that the land was wanted for golf purposes, would a premium be added to the value/price of the same piece of land? I'm speaking UK/Europe here.
In addition, as a ballpark figure, how much does permitting issues cost, again in UK/Europe?
All the best.
Thomas,
The main driver of value of land in Europe is the probability that houses can be built on it. In Holland farm land is 2 euro/m2, building land is 500 euro/m2.
Permitting costs can be between 200-500k euro per course in Holland
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Jeff:
I disagree with your premise that costs are generally the same across the board. Costs are the same if you build everything to the same standard ... it's the standards that need to change.
I just did a detailed budget for a potential new project in Michigan. Actually we did two budgets so the owner could understand what he was getting into ... one with USGA greens and tees built out of mix and wall to wall cart paths, and one where the greens and tees would be built from native soil and the paths were green-to-tee only and the irrigation spacing was a bit wider.
The two budgets came in at $4.2 million and $2.8 million, respectively. Or, in other words, the "modern standards" cost 50% more than the old way of doing things. And I'll be damned if most golfers would know the difference.
And I disagree about sod too ... my best-conditioned courses today are the ones where we used zero sod in the grow-in process.
I guess if it were a walking only club you could save the money. On the other hand, I cannot think of more than a handful of clubs without cart paths.
Otherwise, my presumption was of a typical upscale club in any big metropolis USA, on normal (to me) clay soils, etc., and not even a Chechessee Creek, which as noted is a second club for most.
So, besides cart paths, and USGA greens (I rarely use them, but presumed the certified super from some other big name club comes over, etc. I doubt you could convince that type to go topsoil greens, although, if it were a 10K round club, it would have the best chance of doing so.
So, you can continue your argument that standards must change, and that could be an interesting debate, but my answer was tailored to my expectations from a theoretical membership.
BTW, I think I clarified that seeding and netting yields great results, especially when the sod subsoil and the site subsoil don't match. My best comparisons are the Giant's Ridge (sodded) and Wilderness (seeded) nearly side by side. Results ended up about equal. Hard to know all the ins and outs of what the weather was, grow in program, superintendents experience, etc. but yes, in those cases, grow in was pretty similar. What I could tell the difference between sod and see was areas at Giant's Ridge NOT sodded next to sodded areas.
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On the Bull Valley thought, the big question for me is can it be turned into something truly *special*, and how much will the clubhouse kill you. I had a friend that wanted to get some people together to buy it, and I kept saying as it is, you just can't cash flow it. I wasn't creative enough to think outside the box until I saw your renovation work and this thread (not to mention, I really don't have the money to chase a project like that).
Man, I looked at that website for BV:
http://www.bullvalleygolfclub.com/course-description (http://www.bullvalleygolfclub.com/course-description)
Andrew, IMHO you couldn't get Alister MacKenzie to come back from the grave to remodel the course for free and not have an overly built somebodies grandiose pipe dream like that which would not eventually eat you up, despite acquiring it for 1.7. Looking at the website, F&B expectations, events expectations, and considering what it takes to run those operations year around, and most important the plethora of 'clubs' in that northern tier of N. Illinois as competition; I just can't see it. I used to look into various situations like that and passed a few by, having feet of clay when I started to consider what the writing on the wall was for long term viability, and how people in various economic era likely smarter than I, failed. They all get eaten by the market pressures, expectations, and it never seems to have much to do with the quality of the golf course. BV looks like a graduate course study in grandiose plans (perhaps home builders 'may' have made money-but they are long gone). But, the golf and club operations were left for the dreamers. I may be full of it, but you could not hand me the keys for free with a market and infrastructure like that. Just look at that Twitter feed of the superintendent and his recent rain deluge challenges, in context with tight budgets, and competition of so many other area clubs. And, it isn't even set up to be remodeled to a golf only club, readily apparently walkable through the parade of homes.
These situations are best left to people of very deep pockets, patrons of golf like Kaiser, Kohler, Trump, etc. Dreamers and schemers with an idea to outfox the market forces by buying low and living the dream, yet so many that have already failed (often multiple times), all believing they are just a bit smarter, are just lambs to the slaughter, IMHO.
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That would be an interesting speculative topic....if Mac, Ross or whoever came back from the grave, what new technologies would they adopt? Certainly greens construction research and irrigation were well known, but less sophisticated at the time. Would they insist on the simpler construction techniques of yesteryear, based on whatever writings we have in their career?
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On the Bull Valley thought, the big question for me is can it be turned into something truly *special*, and how much will the clubhouse kill you. I had a friend that wanted to get some people together to buy it, and I kept saying as it is, you just can't cash flow it. I wasn't creative enough to think outside the box until I saw your renovation work and this thread (not to mention, I really don't have the money to chase a project like that).
Man, I looked at that website for BV:
http://www.bullvalleygolfclub.com/course-description (http://www.bullvalleygolfclub.com/course-description)
Andrew, IMHO you couldn't get Alister MacKenzie to come back from the grave to remodel the course for free and not have an overly built somebodies grandiose pipe dream like that which would not eventually eat you up, despite acquiring it for 1.7. Looking at the website, F&B expectations, events expectations, and considering what it takes to run those operations year around, and most important the plethora of 'clubs' in that northern tier of N. Illinois as competition; I just can't see it. I used to look into various situations like that and passed a few by, having feet of clay when I started to consider what the writing on the wall was for long term viability, and how people in various economic era likely smarter than I, failed. They all get eaten by the market pressures, expectations, and it never seems to have much to do with the quality of the golf course. BV looks like a graduate course study in grandiose plans (perhaps home builders 'may' have made money-but they are long gone). But, the golf and club operations were left for the dreamers. I may be full of it, but you could not hand me the keys for free with a market and infrastructure like that. Just look at that Twitter feed of the superintendent and his recent rain deluge challenges, in context with tight budgets, and competition of so many other area clubs. And, it isn't even set up to be remodeled to a golf only club, readily apparently walkable through the parade of homes.
These situations are best left to people of very deep pockets, patrons of golf like Kaiser, Kohler, Trump, etc. Dreamers and schemers with an idea to outfox the market forces by buying low and living the dream, yet so many that have already failed (often multiple times), all believing they are just a bit smarter, are just lambs to the slaughter, IMHO.
A very wise Chicagoan with a golf portfoilo and a vision for excellence looked closely at Bull Valley, and passed.
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Why build when you can buy for well under $2.5 mil?
http://commercialsearch.savills.co.uk/property-detail/2693
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I guess if it were a walking only club you could save the money. On the other hand, I cannot think of more than a handful of clubs without cart paths.
Why the need for cart paths anyway on US courses?
Rainy Britain seems able to cope with carts on fairways, and I'm not referring solely to links and heathland courses.
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David,
That is an issue that will keep new golf course construction in the dumper for a while. The construction boom was fueled in part because it was almost as cheap to build new as to buy used. That in part came from a few well funded golf management groups/REITS who paid high prices just because they had the money to spend, and not because of any ratios of investment to income.
One problem with buying a used golf course is you don't know exactly what capital improvements you might need to bring it back in shape. There are always the obvious ones, but you never know for sure. Another is whether you can truly turn the image of a failed place back to a successful one, with some spruce ups, a new name, etc. You may buy for $2.5M, and spend another $2.5 in spruce ups/image changes, capital improvement catch ups, etc. Still cheaper than starting from scratch, especially if you consider permitting and land costs.
I have put in an underfunded offer to buy a golf course, but feel lucky that the Owner has passed on my lowball offer.....
Paul,
I don't know other than we do get concentrated wear areas, perhaps self inflicted solely because there are cart paths. However, the majority of those who run and make money from golf courses seem to think they are imperative, and few are willing to try courses without them. Is this just herd mentality and golfclubatlas.com knows something they don't?
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"The two budgets came in at $4.2 million and $2.8 million, respectively. Or, in other words, the "modern standards" cost 50% more than the old way of doing things. And I'll be damned if most golfers would know the difference."
Having seen the old ways firsthand, I''d bet the lower cost version would be much better. $1.4 million (difference) is a lot of sunk cost and could be the difference between comfortable and intensive care.
Better is better.
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On the Bull Valley thought, the big question for me is can it be turned into something truly *special*, and how much will the clubhouse kill you. I had a friend that wanted to get some people together to buy it, and I kept saying as it is, you just can't cash flow it. I wasn't creative enough to think outside the box until I saw your renovation work and this thread (not to mention, I really don't have the money to chase a project like that).
Man, I looked at that website for BV:
http://www.bullvalleygolfclub.com/course-description (http://www.bullvalleygolfclub.com/course-description)
Andrew, IMHO you couldn't get Alister MacKenzie to come back from the grave to remodel the course for free and not have an overly built somebodies grandiose pipe dream like that which would not eventually eat you up, despite acquiring it for 1.7. Looking at the website, F&B expectations, events expectations, and considering what it takes to run those operations year around, and most important the plethora of 'clubs' in that northern tier of N. Illinois as competition; I just can't see it. I used to look into various situations like that and passed a few by, having feet of clay when I started to consider what the writing on the wall was for long term viability, and how people in various economic era likely smarter than I, failed. They all get eaten by the market pressures, expectations, and it never seems to have much to do with the quality of the golf course. BV looks like a graduate course study in grandiose plans (perhaps home builders 'may' have made money-but they are long gone). But, the golf and club operations were left for the dreamers. I may be full of it, but you could not hand me the keys for free with a market and infrastructure like that. Just look at that Twitter feed of the superintendent and his recent rain deluge challenges, in context with tight budgets, and competition of so many other area clubs. And, it isn't even set up to be remodeled to a golf only club, readily apparently walkable through the parade of homes.
These situations are best left to people of very deep pockets, patrons of golf like Kaiser, Kohler, Trump, etc. Dreamers and schemers with an idea to outfox the market forces by buying low and living the dream, yet so many that have already failed (often multiple times), all believing they are just a bit smarter, are just lambs to the slaughter, IMHO.
RJ, I tend to agree with you.
To be clear, the friend who brought it up a few times was never really serious and more knee jerk thinking because the price was so low.
The craziest part of the club, IMO, is that they are a "golf only" club. No pool or tennis courts to attract families. But as a "golf only" club (without a storied history) they have a 37,000 sq foot clubhouse, which makes no sense. I think their superintendent does an amazing job with the course, and it's my understanding is it's run with as modest of a maintenance budget as there is. With that location, it needs to be truly special, or the clubhouse needs to be bulldozed over, in my very novice opinion. It doesn't surprise me that some big names looked at it and passed.
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Why build when you can buy for well under $2.5 mil?
http://commercialsearch.savills.co.uk/property-detail/2693
A local,member-owned club just had a small group of members buy the bank debt and now own the club.The replacement cost might be 5X what they paid--if not more.
But the buyers are more interested in keeping their club afloat than some future payoff.This wasn't exactly charity--but it sure wasn't a prudent real estate investment.
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Paul,
I don't know other than we do get concentrated wear areas, perhaps self inflicted solely because there are cart paths. However, the majority of those who run and make money from golf courses seem to think they are imperative, and few are willing to try courses without them. Is this just herd mentality and golfclubatlas.com knows something they don't?
The private course I belong to does not have continuous paths, and it's fine most the year, but does get beat up in spring, and we do lose a few days after heavy rains. With a short golfing season, we allow carts a few days we shouldn't as well which really tears up the roughs.
This year I had a group of 12 in town on a beautiful Friday, and we had to move our round to the semi-private course with continuous paths to play because of heavy rain the previous day. Now, if the difference is $500k, you need a lot of "lost" rounds to make it up, however.
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Jeff:
And I disagree about sod too ... my best-conditioned courses today are the ones where we used zero sod in the grow-in process.
Many courses use sod for purity and instant gratification. Courses that Doak, C&C and other design would lose a lot of the ruggedness and many of the unique features if sodding was done. The machines and manpower would change the look too much-too many hard edges. Phil Cricket is even sodding greens. Sod also eliminates the chances of wash out
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JMEvensky -
Sorry, I am a little confused.
"A local,member-owned club just had a small group of members buy the bank debt and now own the club.The replacement cost might be 5X what they paid--if not more."
1) Are you saying that a group of members at a club near St. Margarets has purchased the St. Margarets property?
"But the buyers are more interested in keeping their club afloat than some future payoff.This wasn't exactly charity--but it sure wasn't a prudent real estate investment."
2) Are you saying that they bought St. Margarets primarily as an investment speculation and more to protect their current club rather than to operate St. Margarets as a going concern?
DT
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JMEvensky -
Sorry, I am a little confused.
"A local,member-owned club just had a small group of members buy the bank debt and now own the club.The replacement cost might be 5X what they paid--if not more."
1) Are you saying that a group of members at a club near St. Margarets has purchased the St. Margarets property?
"But the buyers are more interested in keeping their club afloat than some future payoff.This wasn't exactly charity--but it sure wasn't a prudent real estate investment."
2) Are you saying that they bought St. Margarets primarily as an investment speculation and more to protect their current club rather than to operate St. Margarets as a going concern?
DT
Sorry for the confusion--"local" to me.This happened in Memphis.
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Paul,
I don't know other than we do get concentrated wear areas, perhaps self inflicted solely because there are cart paths. However, the majority of those who run and make money from golf courses seem to think they are imperative, and few are willing to try courses without them. Is this just herd mentality and golfclubatlas.com knows something they don't?
The private course I belong to does not have continuous paths, and it's fine most the year, but does get beat up in spring, and we do lose a few days after heavy rains. With a short golfing season, we allow carts a few days we shouldn't as well which really tears up the roughs.
This year I had a group of 12 in town on a beautiful Friday, and we had to move our round to the semi-private course with continuous paths to play because of heavy rain the previous day. Now, if the difference is $500k, you need a lot of "lost" rounds to make it up, however.
Some clubs aren't willing to forego or even take the chance on losing that much revenue. They also prefer a one time construction cost to small and unpredictable cost nibbles every year.
The math is some guesswork, but is it better to have $45K in annual debt (approximate debt on $500k of cart paths) and be almost guaranteed revenue right after the approx. 20-30 rain days a year or is it better to save the $45K, spend $5-10K re-sodding, roping, etc. and potentially lose under $35K in revenues?
Obviously, most courses have opted for the greater certainty, and if the wackier weather associated with global warming comes true (or they believe it will) that decision will become even easier.
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I've got to channel the former GCA'er who must not be named and ask does it ever occur to anyone to WALK the golf course when it's too wet for golf carts.
Sorry, just had to get that out. It was chafing a bit...
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What are the cost differences between building on a nice sandy-based site and a clay field? Construction, irrigation, wall-to-wall paths vs. only green-to-tee, ongoing maintenance etc.?
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My ideal clubhouse: Can't be more than 1200 sq. feet:
http://www.boothhansen.com/projects/the-dunes-club-clubhouse/
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I've got to channel the former GCA'er who must not be named and ask does it ever occur to anyone to WALK the golf course when it's too wet for golf carts.
Sorry, just had to get that out. It was chafing a bit...
It's getting harder to get people to just walk from the cart paths. Ask your Pro Shop how many people will call after a rain storm to see if the golf course is "cart path only". A lot of them will refuse to play.
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No, I meant walk the course. Not slogging 10 miles worth of back and forth to a cart parked on a path. I wouldn't wish that sort of 6-hour death march on anyone.
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JC:
The clubhouse at my favorite golf course didn't cost $5M, and it serves it purpose quite nicely.
WW
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Some clubs aren't willing to forego or even take the chance on losing that much revenue. They also prefer a one time construction cost to small and unpredictable cost nibbles every year.
For a private club, not allowing carts out because of possible turf damage is a sure way of losing members. For a daily fee facility, it would mean losing market share. Whether we like it on this site or not, riding carts are preferred by members and customers at most places in the U.S. and a necessity in many climates (Phoenix, Palm Springs, Vegas, Dallas, Miami, Atlanta, etc.) much of the year. Regardless of the type of course I was building in any of these areas, it would have cart paths. BTW, I notice a lot of riders amongst our GCA.com brethren, particularly if the cart is included in the fee. Even at the walking-only Red Course at Dismal River, a number of participants obtained special dispensations to ride.
As to the subject of the thread, I would think that the bulk of the cost variance is due to the location. A 4,000 s.f. house where I live in Frisco, TX can be had for $350 to $700k. The same house 25 miles south in Highland Park is $2.5 to $5+ Million. The main difference is the cost of the land.
In certain parts of the country, availability of water would be a major factor, as are the environmental and zoning regulations. I suspect that getting a golf course built in Orange County, CA would be nearly impossible today. Near Frisco, TX, $5M for land, $5M for golf, $5M for clubhouse, maintenance facilities, FF&E, etc. or $15M for a killer Brauer signature course; eye-candy AND subtlety, perfect bunkers, and a full fleet of top-of-the-line carts with built in stereo and beer coolers included. Maybe we can get Jerry Jones to GP the deal while he is building his headquarters and practice facilities in the city. He could probably get it done with no money out of his pocket and still retain the naming rights.
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You can obviously spend anything on building a golf course, I dont think you get what you pay for by paying much more than $5,000,000 for the lot, most figures upwards of 5M are just wasting money and largely thats backed up in the resale's price.
In the UK, Greens cost $20,000 perhaps 30,000 so multiply that by 20, tees dont really cost much, perhaps $5,000 per hole, Irrigation perhaps $400,000, for greens, tees and twin row fairway. Shaping costs perhaps $200,000, Drainage another 150K, Seeding is about 50K.
A reasonable clubhouse might cost $750,000, $250k for the furnish, $400k for machinery, car park, roads, maint store, project management a $100,000 design fee and the land cost. Things can be much skinnier and its my experience the skinnier the better if you are thinking of making a profit. Location is everything in the UK, a golf course in the herbrides might look great to a few but not to a banker, it needs people and lots of them.
I have got very busy again because my customers want things done at a reasonable price, I can probably build 18 holes for less than most architects design fees. I just cant see the Western world wasting money again and making the sort of mistakes that got made.
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No, I meant walk the course. Not slogging 10 miles worth of back and forth to a cart parked on a path. I wouldn't wish that sort of 6-hour death march on anyone.
It's unfortunate but almost no one walks. I have one guy who will walk with me early in the morning, and one other who would maybe consider it. I walk a ton early morning before work by myself or with my friend. Other than that, I've tried and I have a very, very hard time walking when I'm the only guy in the group doing it. Even in the club championship I tried to walk, but we were in twosomes, and it was very difficult to have my competitor ride up to his ball and wait, so I ended up riding with him.
It's more enjoyable for me to walk than ride, but that changes if the others are riding, for me.
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Seriously, though. I don't want to derail the excellent discussion on economics and such. I feel your pain, Andrew. Bummer.
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JC:
The clubhouse at my favorite golf course didn't cost $5M, and it serves it purpose quite nicely.
WW
WW,
Exactly.
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There was a great line in the recent Brad Klein interview - "Do it cheap. Keep it simple. Make it enjoyable from 6,200 yards. The clubhouse is irrelevant. The most important building is for maintenance."
All the best.
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Very interesting topic. I asked the question because there is an amazing piece of land in the NJ pines about a mile away from my house, it was an old sand quarry- (sound familiar Pine Valley fans ) . It is only 95 acres-maybe an amazing par 3 or executive course.The price just for land- 7 million.
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Your model is Dunes Club in New Buffalo Michigan.
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JC,
Right on the money!!!
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here you go- $553.22/acre:
http://www.lashleyland.com/2012/06/27/nebraska-sandhills-ranch-for-sale-in-thomas-county/
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"There was a great line in the recent Brad Klein interview - "Do it cheap. Keep it simple. Make it enjoyable from 6,200 yards. The clubhouse is irrelevant. The most important building is for maintenance.""
Thomas D. -
While I admire and agree with Brad Klein's comments, it must be pointed out that his comments were not directed towards developing an upscale club.
DT
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There was a great line in the recent Brad Klein interview - "Do it cheap. Keep it simple. Make it enjoyable from 6,200 yards. The clubhouse is irrelevant. The most important building is for maintenance."
All the best.
A great line maybe and perhaps fine if you're building a course for Brad Klein. I suspect that he is an outlier. I would bet that a successful club today has to meet the needs and expectations of a wider, more normal clientele.
Where I play at this time, it was built to be a poor man's Preston Trail- good golf course and practice facility, modest, but comfortable clubhouse, adequate, but not over the top maintenance. It was fed by the developer for years, but now that he is dead and most of the development land has been sold, his heirs don't want to subsidize the club anymore. It is in a thriving family area and plans are to put in a swimming pool and greatly expand the dining facilities. We'll see if it pays off, but as it stands today in the Klein mode, it doesn't work.
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Question:
If you buy an existing golf course and completely redesign/rebuild it, what is the permitting process like? None? Way less involved than a completely new project? Can you basically do anything you want without authorization?
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Tom
In general it is way less involved.
Wetlands, streams & habitats still need to be managed.
And if no new "important" land was going to be utilized you would need the following:
A SWPPP - storm water & pollution plan
And most likely a grading plan showing that you won't effect the surrounding drainage - especially within cities
Cheers
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Do we agree one can build an upscale club without an upscale course but it's hard to build an upscale course without it being an upscale club? :) :)