Learned some new things from a corporate lawyer friend recently who specializes in relocating companies from one state to another, which is in great demand presently btw. He is a golfer, but we discussed the chain of events that happen or can happen when a company moves headquarters or opens a major branch of operations. These are the types of events which can create a material change in the demographics of the city. Also, one which politicians are now competing for relentlessly.
He has helped develop and sat through many presentations to municipalities/states with the advantages of a company investing in an area. Feel free to add others as I'm just focusing on some major steps. If the below happens, you have population growth in a city which is experiencing a material increase in well paying jobs, which then causes a demand in housing, shopping and recreation, including a private golf club perhaps.
Starting point for discussion or development - Company approaches city government with their proposal to open operations in their area. Based on their own research. size, infrastructure existing, workforce etc.
- Politicians/government have new business development staff in their city/state actively seeking out development in their communities.
Value proposition for the city/community- Be Wary it appears. There are many in presentations, some are total BS as they are 2nd or 3rd trickle down effects that are hard to measure but included. One mentioned, was this large company would be willing to sign a sponsorship deal for a new "pro sports" stadium. However, this city didn't have a team in this league even, so when asked by the city the company said, "well expansion franchise or attract another team to move here and we will sponsor the stadium at at least market rate." So if you can get X to happen, I'll do Y, which will create Z. So many contingent things have to happen that the likelihood is negligible.
- Increase in well paid jobs is the biggest and most common, since many of the incentives are wrapped around tax incentives offered to the company. Huge selling point and easy for politicians to parrot the perks as yes there are many.
- The company will attract their suppliers to also open businesses in the city to serve them and the cycle begins. There are some companies that absolutely need suppliers and have this power. However, others may claim a robust team of companies will come also. Certainly one company can't speak for another so be wary of this impact as it is mostly overvalued in the company's presentation.
- Real estate demand will increase and new residential development will be needed also creating jobs in construction. Commercial development to support the residential and you have the links in development. Present property owners will see benefits from equity in their homes, and be able to tap this equity themselves at cheap rates. The downside is those who aren't homeowners will be priced out.
Value proposition for company- This could be zoning changes to allow business/corporate development in a previously zoned area for other purposes.
- When environmental issues are raised you have decisions outside local government and can/will take years to reconcile potentially, effectively killing the deal.
- Tax rates or waivers for periods of time for corporate tax/real estate tax/sales tax etc. are discussed as obviously the government needs to offer a carrot and this is the most common and attractive for companies.
- Access to an already skilled workforce. Want educated population ideally with skill sets you desire now. Universities close by to develop and partner on needs.
Public DiscussionUsed to be in formal town halls or meetings for citizens to voice opinions, perhaps local newspapers to debate the pros and cons. However, with social media companies and governments have to predict the stakeholders that are against and have a communication plan to answer their concern before that is raised. As we know politicians are elected and the public elect them, so their opinion can/should matter.
Some Analysis I'm taking a leap I acknowledge in that with a large population increase (specifically those with corporate relocations) will yield an increase in demand for recreation, which I'm guessing maybe may yield demand for private golf clubs. New public courses, outside of destination courses, aren't happening so I'm discounting that. However, maybe I shouldn't and happy to include new public courses if someone can link how those can be financed. I don't see new public developments like the housing communities of the 80-00's.Now which cities are experiencing growth for well paying jobs and population growth? There are several areas based on a variety of metrics. You could use the US Census data which lists the top 15 cities for % growth from 2010-2020.
- Frisco, TX - 71%
- Buckeye, AZ - 57%
- New Braunfels, TX - 56%
- McKinney, TX - 52%
- South Jordan, UT - 52%
- Meridian, ID - 48%
- Cedar Park, TX - 44%
- Fort Myers, FL - 40%
- Conroe, TX - 39%
- Irvine, CA - 36%
- Murfreesboro, TN - 35%
- Mount Pleasant, SC - 34%
- Round Rock, TX - 33%
- Goodyear, AZ - 33%
- Franklin, TN - 33%
So that is pretty eye opening. Texas has 6 of the fastest growing cities, 3 around Austin and 2 around DFW. Tennessee, which changed to a no state income state during the decade also has a couple cities in the rankings. Buckeye and Goodyear are outside the Phoenix area to the West and clear this is the area of growth.
There are various metrics to look at. A couple to note are the actual shipping company demand for cities based on growth. Pods, movers, etc. Another are the metrics for chamber of commerce records for large companies relocating or building new facilities. I won't go into depth on those stats, for we can all find our own. I'll focus on 2 I think have the most potential to have drastically increased demand for recreation and as a chain reaction due to high paying jobs being created, demand for new private clubs potentially.
I'm ruling out AZ/CA due to water issues and environmental regulations which appear numerous. Also I think DFW has adequate private clubs to meet demand. Yes all have wait lists, but I'm looking at the top cities for demand, not all. My predictions:
Austin, Texas- Well publicized tech companies from California are moving to Austin (Oracle, Tesla, etc.) and the surrounding cities. Which is creating large growth in well paying jobs. Real estate prices are crazy now, like many places.
- The area doesn't have a large number of private golf clubs with Austin CC, Austin GC, etc. There is a new Discovery Land project outside the city called Driftwood to the south, but there is a big gap north of Austin, where much of the growth is. Round Rock, Cedar Park and Georgetown in Williamson County.
- So perhaps a private club north of Austin, maybe in a development. However, Ben Crenshaw's AGC is awesome without a house around.
- Can golf year round provided you can tolerate the heat in the summer.
Boise, Idaho- Depending on your metrics, this could be the top city in the country for growth as the real estate demand has blown everyone looking in the area out of the water. Many Californians just leaving the state and this city has benefited greatly by that demand.
- I have never been to Boise myself, much less golfed there. It doesn't appear to have any private courses of note with Hillcrest being the best.
- Based on their growth and increased value of real estate costs for out of staters, it does seem as if a very nice private course could make sense to meet the demand.
- Downside is the relatively short golfing season. Yes they have ski resorts and snow, but with global warming I wouldn't want to hold a ski resort business long term. Water isn't an issue in Idaho either.
We love golf and view how the world / country are changing in relation to our passion. This is a very small niche (golf course development/private at that) of a chain reaction to societal trends.
So there is a take, what do you think? What am I missing or what do you think are the potential cities for growth in this space?