Construction Costs?

[Mark_Fine]

Of course there are many variables, but what do most of you think it costs to build a good quality golf course these days?  I just read an article stating the average number in the U.S. is about $4.25MM including design fees (and excluding the land/clubhouse).  Any comments about this?  

Construction Process:
                                                             
o      Mobilization
o      Surveying/Staking
o      Clearing
o      Grubbing/Disposal
o      Erosion Control
o      Topsoil Stripping
o      Earthmoving
o      Shaping
o      Drainage
o      Topsoil Replacement
o      Greens Construction
o      Tee Construction
o      Bunkers Construction
o      Walls/Bridges
o      Irrigation/Pump Station
o      Cart Paths
o      Planting Preparation
o      Seed/Sod/Mulch/Germination
o      Landscaping
o           Bonding
o           Design

Average Total - $4.25 million

[John_Conley]

Mark:

I read an article about the guy that built Scotland Yards in Dade City without doing any of that stuff in order to keep the construction cost down.  It was a remarkable story in that it is so unusual.  You'd think someone else would target the ultra-low end market.

Using the $10 per million rule of thumb, your green fee is at $45 plus whatever we have to add for land.  Sounds accurate to me.  Of course it is an average, which means some are much higher.  (Camp Creek was $17 million if I heard right.)

[Michael Dugger]

I have a comment.  of this 4.25 mil figure, what are the percentages breakdown?   I.E. what percent is for clearing, what percent for bonding, design, bridges, cart path, etc...

[Art_Schaupeter]

Mark,


You are correct in that there are a lot of variables to consider when establishing a construction cost estimate.  I think $4.25 million as an average is probably a fair estimate.  I designed new daily fee facility that cost $1.7 million for the line items you have listed, but when you get down into the $2.5 million or less range, it really comes down to the quality of the site, how well the architect uses the existing site features, and what the vision is of the client or owner.  Also, how you go about building the course will have an impact on cost, in terms of using a general contractor, subbing out various line items, doing some of the work yourselves, etc.

If you have an excellent site, architect and vision, you can build a very good quality golf course for $2.5-$3 million or less.  If the site isn't so great, then the $4.25 million is probably a good starting point.  What will take the costs higher is how much extra you have to do, or choose to do.  

In my mind the key line items of construction are greens, bunkers, tees and fairways, irrigation, drainage and shaping.  I'd start with an understanding of what the vision for the golf is in terms of green sizes, bunker quantity, tee sizes, fairway widths, irrigation requirements, etc.  These are the important elements that speak to the quality of the golf experience.  

From there, bulk earthwork, topsoil management, drainage and clearing will be determined by the quality of the native site and how the architect incorporates natural features, contours, etc (or doesn't).  These line items are variable, but they compose a large portion of the budget on many projects unless the site is really good and used properly.

Some of the other line items which I think can be real variable from project to project, and many times are more important to the client include:  cart paths (decisions include continuous paths or not, concrete or asphalt, 7' wide or 8' wide, wideout and curbing amounts, etc), decorative stone walls or timber walls (if any), landscaping and tree planting(if needed), how much sod vs how much seed, etc.  These line items tend to get very expensive, especially on the CCFAD type facilities that put a lot of value on bells and whistles.  I think these items can be minimized on a pure, traditional golf experience that focuses on the quality of the individual holes to bring the golfers in.
  
Good topic and question.

Art

[CjM111]

Here are some numbers you might use as a rule of thumb.

Line Items                        
              Low          Average        High
Mobilization      25,000          60,000       125,000
Clearing            75,000        125,000                    400,000
Earthwork           225,000        865,000                  2,500,000
Topsoil Stripping      60,000        150,000                    500,000
Topsoil Replacement 90,000        200,000                    750,000
Lake Development          -          200,000                  1,000,000
Const. Features     250,000        900,000                  1,500,000
Irrigation System      450,000        600,000                  1,000,000
Grass Development      200,000        400,000                     700,000
Cart Paths      275,000        450,000                     750,000

Basic Costs of Construction            
                      1,650,000 3,950,000                  5,600,000

Unit Items                        

Tree Planting      -           75,000                  2,000,000
Bunker Sand      45,000         75,000                     100,000
Rock Pick Up and Removal      
                         15,000         65,000                       90,000
Subsur. Drainage 125,000        250,000                   1,000,000
Sod                  70,000        215,000                      400,000
Landscaping         50,000        100,000                      500,000

Unit Costs of Construction            
                       305,000        780,000                   4,090,000

Contingency      195,500        473,000                      969,000

Total Golf Course Cost            
                    2,150,500        5,203,000          10,659,000

In order to build a golf course in the lower price area, it is critical to have a perfect piece of propterty that does not require significant dirt movement.  These numbers do not include architectural fees, preliminary costs for permitting and entitlements, legal, etc.  And, these numbers do not include clubhouse or start-up costs for the operation including maintenance equipment.

Hope these columns match up, I pulled this from one of our budget presentations.

[Mark_Fine]

Construction Process Averages:

                                     Estimated Cost
o      Mobilization                         $65,000
o      Surveying/Staking                              $30,000
o      Clearing/Grubbing/Disposal                  $210,000            
o      Erosion Control                               $80,000
o      Topsoil Stripping                              $230,000
o      Earthmoving                              $550,000
o      Shaping                                    $250,000
o      Drainage                                    $260,000
o      Topsoil Replacement/Fine Grading            $150,000
o      Greens Construction                        $400,000
o      Tee Construction                              $150,000
o      Bunkers Construction                        $110,000
o      Walls/Bridges                              $25,000
o      Irrigation/Pump Station                        $800,000
o      Cart Paths                              $180,000
o      Planting Preparation                        $110,000
o      Seed/Sod/Mulch/Germination                  $275,000
o      Landscaping                              $60,000
o      Bonding                                    $50,000
o      Design                                    $250,000

Totals                                          $4,235,000

[Scott_Burroughs]

Mark,

Drop the earthmoving costs and don't put in any cart paths, and your figures drop a decent amount.  And your course just might be a better place to play.  

[Mark_Fine]

Scott,
Agreed!!  Thanks for the help.  
Mark

[Art_Schaupeter]

Regarding the average costs listed:

$180K for cart paths is not adequate for continuous cart paths.  

$400K for greens assumes USGA construction method.

$800K for irrigation would need to be doubled if you were in the southwest or west.  

$25K for bridges and walls won't go very far (maybe a couple of short bridges or one greenside wall).

For a good quality daily fee facility on a nice piece of ground, the overall cost should be adequate, just a question of where the funds get allocated.

Art

[Mark_Fine]

Thanks for the comments guys.  Interesting to hear the different perspectives.

[Forrest Richardson]

What does it cost to buy a "good quality" meal?

-- At Disneyland, about $12
-- In a tourist are of NYC, about $20
-- Down the street at the Phoenix City Grille, about 10
-- While camping, about $2
-- While driving to California through Blythe, about $5
-- At my grandma Alyse's house, nothing
-- When with a golf course builder, nothing
-- At Denny's, about $6.50
-- At a five star resort, about $30
-- In Costa Rica, about $3
-- At a first rate Rocky Mtn. ski resort mountain, about $15
-- At the same resort in Canada, about $9

Depends, Mark. The site and who you go with will tell!

[Mark_Fine]

Forrest,
Good point and I know this was a tough question.  I was just trying to get some balkpark numbers from people and compare them to those "averages" I found.  The site I'm looking at is mostly rolling farmland so that in itself should keep the costs way down!
Mark

[Patrick_Mucci]

Mark Fine,

Square footage of the greens has a substantial impact as does remediation costs.

Forrest Richardson,

You forgot one.

Lunch in Las Vegas..... your lungs and every penny you have.

[Forrest Richardson]

Mike Hurdzan recently assisted a friend who was a farmer build a course for less than $1 million. I am not an expert on midwest or eastern sites, but from what I've been told you can build quite the nice and pleasurable course (18) for less than $2 million.

I'm not sure I agree with Patrick's green comment for new construction. Greens themselves make up a small acreage and, unless you are in love with some national organization's ideal of the "perfect" green construction, you will simply core a green's subgrade, drain this at low points, and fill the cavity (core) with pure coarse sand -- at which point you will have spent not much more $$ in comparison to the other areas of the work.

[Forrest Richardson]

Could someone please let me know how those smiley faces are ending up in my posts? I do not like them and have never used them! Help! They are invading.....

[Jim_Kennedy]

Mark,
Buck Point, by P.B.Dye, was built for $1.5 mil. on leased farmland in Indiana. Check out their website at: http://www.buckpointgolf.com/index.php

This sounds like a very playable 7,000 yard course that will have a broad appeal. Places like this are the most important types of development for the future of golf, bar none.

[Forrest Richardson]

Jim -- I'd say "courses" like this, not "places" like this. In Indiana I'd guess golf is cheap. What the world needs is courses that can be accessed in areas where golf is a premium...for less $$!!

[Mark_Fine]

Thanks guys.  All good points.  Earthmoving is a key area.  Not too much you can do about irrigation costs "are there"?  Any thoughts on that as irrigation costs seem to be a constant on every course.  Forrest, the course Mike built for less than a million dollars must not have full irrigation??

[Forrest Richardson]

I think it has a very simple tees/greens system. Actually, however, irrigation is an area where $$ can be saved as it is often the largest line item of a project. Especially in the west. But, it is relative: If irrigation is 40% of the cost, and it might be simplified, then it is a ratio of the larger $$ amount.

At Monticello, UT we spent $2.7 million and roughly $900,000 of that was irrigation. It is a simple system with mostly full heads (360-drgree coverage) as opposed to partial heads creating a hard turf/non-turf edge.

[Jim_Kennedy]

Forrest,
Yes, "courses like this" is what I had in mind.

I think Buck Point has the potential to be a model for affordable golf in nearly any location. All the principals, from architect to facility staff, worked hand in hand to get the project done. It appears that they didn't borrow heavily. Leasing of land can be done in many locales, not just Indiana. Topsoil greens and minimal earthmoving along with buying used sprinkler heads for $5 each, using trailer bodies for stream crossings, buying used turf equipment, etc., are important elements. Remember, spending project money for a $65k rough mower sucks funds out of the register for the life span of the original loan not just the lifespan of the equipment. That drain could last for 20+ years.
  Some may counter that all that used stuff will break down and need to be replaced and they'd be right, but that will happen over time and replacements can be funded from cash flows, not from initial loan proceeds. Keeping the upfront costs down is the #1 recipe for success.