[John_Conley]

I was able to learn a lot about Rustic Canyon by perusing the Geoff Shackleford dot com site.  My question is, "What is the ownership structure?"

I'm curious... is there an affiliated real estate project, a deep-pockets owner who doesn't care, or does it actually pay to price below market if the site yields a great course.

From what I've heard, I think I'd like the place.

For those on the east coast, check out Mike Dasher's Eagle Dunes in Sorrento (near Black Bear) if in my area.  No houses yet, and a similar concept to the course.

Thanks in advance

[Mike Benham]

.. is there an affiliated real estate project ...

NO ...

I am no expert on Rustic (Dave M., Tommy or Shack himself could answer more specifically) but it is county owned land ...

[DMoriarty]

I don't know too much about the structure, but have heard the following:

-- The land is county owned and the owner has long lease (60 yrs?)
-- The county owns to the top of the canyon walls on both so there will be no real estate in the canyon, except of course for the Brad Klein Estate houses a couple hundred yards past the 4th green.  
--  I believe the course and infrastructure were relatively inexpensive to build, compared to other courses in the area.  So they don't have to charge a fortune to make good money.  
--  I have heard that the maintenance budget is quite low, relative to courses with similar revenues.  
--  The primary owner used to be an American Golf guy, which I think explains in part why the price is low.  It seems as if American golf tried to make their money through volume, and that is clearly the approach at RC, as well.
--  They have raised the prices at least twice so far, and are now at $50 bucks no cart on weekends to walk.  So for riders the cost is over $60 dollars, which is quite a lot more expensive than many municipality courses in the area.  In contrast, the places which started out very expensive are getting much cheaper as time goes on.  As I mentioned on another thread, at Lost Canyons one can now purchase some sort of coupon membership, and play for not much more than RC.  

Hope this anwers your question.  

Here is my question:  Why dont developers use RC as a business model?  

[John_Conley]

Dave:

Thanks.  I'm not surprised to hear the rates have been upped twice.  The business model is something that nobody emulated, probably because it was harder to borrow with projections for modest revenue.

The county relationship clearly helps this.  It makes it a quasi-municipal.

[Dan Grossman]

While no expert either, I believe that the site is the most important aspect of the low greens fees.

Because of the site there are / were:
1.  Low earth moving / construction costs
2.  No need to build expensive cart paths, long bridges etc.
3.  No development pressures from housing to drive up land acquisition costs (because it is county owned)

I think both the design and site contributes to lower maintenance costs as well.  Since the site has allowed a design which is fairly compact (compared to Moorpark CC and Lost Canyons, for example), I bet the greenskeepers spend most of their time mowing and not driving from hole to hole.  Plus, there isn't a ton of hand-mowing necessary.  There also aren't a ton of bunkers to maintain either (lots of chipping areas).

So, with lower variable and fixed costs you can charge less.  While they have increased the greens fees a couple of times, it is still only $35 to walk on Monday - Thursday.  Pretty cheap.

David M - I believe the lack of good (read: not ridiculously hilly) sites prevents other developers from copying RC's model.  I also imagine that the county lease keeps RC's fees lower than they might otherwise be.

[Lynn_Shackelford]

David M. and Daniel G.  good summaries of the Rustic Canyon structure.  The beauty of the deal is that there are little restrictions on fees charged.  What the market will bear.  The operator pays rent to the county the greater of $300,000 annually versus 10% of all fees except carts.  25% for carts.  So when the course is paid off, this will be an even more profitable course than it already is.  The absurd part is some American Golf executives told me it wouldn't work, too many courses in the area.  Today I played with a guy from Sherman Oaks, 30 miles away.  Says it is his favorite course in the area.
Lesson #1 on golf business, good architecture counts.  Daniel G., doubt that is taught at Anderson.

[DMoriarty]

David M - I believe the lack of good (read: not ridiculously hilly) sites prevents other developers from copying RC's model.  I also imagine that the county lease keeps RC's fees lower than they might otherwise be.

I am not so sure . . . I think that many of these guys prefer ridiculously hilly sites.  How else does one explain RC is one of the last courses to be built.  I've mentioned before the rumor that Cupp passed up the RC site to build Tierrable Rejada.  

[Tommy_Naccarato]

David, It isn't rumor, it is fact.

Lynn, How come you didn't mention about another guy who lives in Orange County that thinks its his favorite course in the area?

[Thomas_Brown]

Part of the economics discussion has to include the Trump gaudy water feature prereq..

RC has none.
Tierra Rejada has a couple of memorable ones from an architectural standpoint.  

Tommy_Naccarato - I thought the Riv was your spiritual  home.

[A_Clay_Man]

The business model is something that nobody emulated, probably because it was harder to borrow with projections for modest revenue.

John- Is that a mouthful about the lenders? An example of the counter-intuition the game teaches.

How do ya'll think this will effect future models? More, smaller sized deals?

Re RC: Is RC out-of-the-woods, on their engineering, savings? How much did the fire and flood clean-up cost the course? Just curious (in case someone thinks it's a bash)

[Jeff_Brauer]

While no expert either, I believe that the site is the most important aspect of the low greens fees.

Because of the site there are / were:
1.  Low earth moving / construction costs
2.  No need to build expensive cart paths, long bridges etc.
3.  No development pressures from housing to drive up land acquisition costs (because it is county owned)

I think both the design and site contributes to lower maintenance costs as well.  Since the site has allowed a design which is fairly compact (compared to Moorpark CC and Lost Canyons, for example), I bet the greenskeepers spend most of their time mowing and not driving from hole to hole.  Plus, there isn't a ton of hand-mowing necessary.  There also aren't a ton of bunkers to maintain either (lots of chipping areas).

So, with lower variable and fixed costs you can charge less.  While they have increased the greens fees a couple of times, it is still only $35 to walk on Monday - Thursday.  Pretty cheap.

David M - I believe the lack of good (read: not ridiculously hilly) sites prevents other developers from copying RC's model.  I also imagine that the county lease keeps RC's fees lower than they might otherwise be.

Your post has a few hits, and a few swings and misses......

Actual golf course construction cost may be a third of total cost.  Earthmoving reductions (from "normal" of other architects) a quarter of that, or less.  That had to be at least a $5MIl project, and probably more.  If they moved 100,000 Cy less of earth than other GCA's, then they saved $150,000, or about 3%.  That is not enough to allow a drop in greens fee from $100 at other courses to $37 or so.  

You are right that bridges save money, as a few bridges could easily cost $150K. Low profile design can save water and mowing costs, and travel time is a component.  No cart paths (probably practical because of the dry climate) can save up to $400,000, which is the biggest construction savings.  

But, the biggest savings probably come from a favorable county lease deal, as suggested., which make the land free! Or, low overhead for the management group - some of the larger companies need to send $0.33 of every dollar to the main office......

Of course, it all adds up, and all involved are to be commended for creating a great, yet affordable golf course.

[Dan Grossman]

Ran's write up states that they only moved 17,000 cubic yards of earth, total.

[Geoff_Shackelford]

Jeff,
Are there like, you know, like actual equations where one can plug in cubic yards moved and they figure out how much less the green fee will be?
 
17,000 is what Gil guessed was moved, it was likely less than that, and wouldn't matter since the earth was moved by one of four people: Gil, Jim, a purple-denim-pant wearing man named Serge, or in a frenzy of ugly bulldozer spinning, myself.
 
Around $400,000 was spent on the scenic and rarely traveled wall-to-wall cart paths. The economics were aided by a generous lease deal, the green fee is only required to be "moderate." The increase is strictly due to demand. The course itself cost around $3 million thanks to sandy soil, using what was there, a great irrigation contractor and not using a contractor to build the holes. Had we built the greens out of the native soil (as the approach areas with the same seed mix clearly demonstrate would have worked fine), the bill would have been much less, and the greens maintenance less of a headache.
 
But as you correctly pointed out, these methods are not how "normal" architects do it.
Geoff

[Tiger_Bernhardt]

Geoff, I find that thinking outside the box has its virtues and in this case a better course was born.

[Jeff_Brauer]

Geoff,
17,000 CY?  Why, I hear Sand Hills moved only 6,000 CY!  And you call yourself a minimalist!

I have read a formula saying that a course must charge $10 for every million spent, ie, $60 greens fees for a $6.0 MIL course, but don't put much faith in it, having seen lots of variations.

Thanks for the details. I expected Rustic cost $3.something for the course, and about twice that overall, perhaps more, given CA entitlement costs.  Sorry about the word "normal". With some thought, I might have said mininmalist vs. modern mainstream.  Certainly, Gil is both as talented and normal as an architect can get......

I stand by my point to Dan Grossman, who listed minimal earthmoving as the key to Rustics low greens fees.  IMHE (humble experience) annual costs raise fees more than one time construction costs.  In Texas, we can still operate a moderate muni for $1-1.5 Million per year.  Some things that would raise that in other locations are:

Cost of doing business in CA - could add $200K?

Water Cost - 0-500K extra, for wells vs city water.....

Desired Level of Maintenance (Minimalist design and the RC site qualities both shine here, I have no doubt that it minimizes both water cost and maintenance.  No need for frilly flowers and other things to carry the theme).....

Management Company Fees - $0 for home grown enterprise above basic salaries, to $200K for big name management.....

Expected Profit - $0 (additional, assuming 8-12% is acceptable for home grown) vs. $600K extra if NY finance house wants a 20% return.....

All of these costs are factored into any course dollar for dollar.  Construction Debt at current rates cost about $85 per thousand, so they factor in at about $0.085 per dollar. Had RC been built for $4M instead of $3M, it would have an extra annual cost of $85K.  

Perhaps the biggest asset of any SoCal course is 350 sunny, golf days per year to amoritze any costs.  Compare this to my recent courses in Northern Minnesota, with a 150 day golf season, a propensity for rain on weekends, and the possibilties of snow well into June, or as early as September......  I expect that RC can handle up to 90,000 rounds a year, whereas the Minnie courses are lucky to get 30,000, meaning extra costs add to greens fees by a factor of 3.

I have never seen RC, but modern mainstream architects who have point out that had another million been spent on things like grading, piping, detaining and otherwise controlling the flash flood waters that periodically race through So Cal canyons, reduces annual clean up costs, residual maintenance costs and lost revenue may very well have been offset the debt cost.  

While that is somewhat subjective, at the very least, a more engineered approach certainly would have been valid, and perhaps more cost conscious long term, even if more expensive initially, assuming that some degree of flood control could have been achieved, as some have suggested.

All of this is my attempt to constructively answer the original post about the economics of a nice public course in the original post.  Hope this perspective helps......

[Geoff_Shackelford]

Jeff,
You sound as if you are questioning the credibility and work of a fellow ASGCA member in Gil Hanse by citing what "modern mainstream architects" would do? I'm sure you weren't trying to be unprofessional, well, actually, I'm not sure and I suspect you might want to clarify your comments to Gil privately, one practitioner to another. I know you're busy and don't have time to have seen the many posts on the floods, so here's a little background to save you a search.

The flood was the result of a unique and catastrophic brush fire last fall. Nearly 8 miles of canyon slope north of Rustic Canyon burned, all draining into the wash that feeds into the course. Amazingly, only part of one fairway was lost despite a five inch rain in five hours.

The course will have to brave one more winter of vulnerability, though the most dangerous winter has passed. I do agree that an ASGCA certified architect would have addressed this issue with "mainstream" care. It's also likely this mainstream approach would have the project languishing in some planning agency pile of papers, not open for play for two years and having served up 150,000 rounds of golf.

Geoff

[Jeff_Mingay]

Geoff,

How often is a flood event like Rustic Canyon experienced predicted to occur? With the golf course having just opened, my guess is, the flood and consequential damage to the course was more a matter of (very) bad timing, following the bush fires beforehand, not necessarily poor engineering on the part of the golf architects.

We constructed at least three holes at Blackhawk Golf Club in Edmonton (three of the best holes on the golf course, in fact) within the North Saskatchewan River's one-hundred year flood plain. The course opened in July last year, and there was a long-shot chance those holes might have washed into the North Saskatchewan River this past spring. Thank goodness they didn't. They still might someday within the next half century or more though.

Still, if Rod Whitman hadn't utilized the wonderful, natural topography adjacent to the river as he did, or significantly altered the native landscape there in anticipation of a one-hundred year flood event, the ultimate quality of the golf course would have been sacrificed.

You seem to indicate that if the brush fire hadn't occurred prior to the flood, Rustic Canyon wouldn't have suffered as much damage as it did. If that's true, I suspect additional "grading, piping, detaining, and otherwise controlling the flash flood waters..." in preparation for a flash flood that "might" occur once every 50 years would have sacrificed the natural character of the course, too.  

Just a guess, for the sake of conversation, based on my limited experience.

[Jeff_Brauer]

Geoff,

My intent was to illustrate the varying economics of a public course, as requested in the original post.  There are different ways of doing things, within the framework of "good architecture" and in the overall scheme of economics, a slight difference in construction costs doesn't really affect per round cost terribly.  And, even the best engineered golf course pales to the amount of engineering that goes into buildings and roads, thats for sure.  However, each of us has experienced floods like that, and on the next project, looked at those things with a little closer eye.

Without seeing the actual site, I suspect you could have (or will, if it floods again) build that one fairway to a level of flood protection similar to other holes, and rebuild the other features right as they were, no? There would be some justification for that if the course closed on account of one fairway every few years, and it would enhance both course and revenue, if I understand the situation correctly.

I reread my post, and other than possibly inserting the word "equally" in front of the words, "valid approach," and relaying someone else's critiques within my post, without attribution, I don't see the criticism as particularly harsh......at least not in the context of what goes on on this site!

[Tommy_Naccarato]

Jeff Mingay gets it!  (As if he never would)

Jeff Brauer,
I hear this same stuff from Forrest all of the time, and frankly, this is what puzzles me about modern day golf architecture.  I think of Bel Air and other canyon course in the area that have been around for years without the drainage of which you speak, and while every 25 years or so, there might be a flood that does some damage, so you get back in there and you fix what you can, and its part of the course's evolution. Riviera is a prime example of this.

The winter floods of 1938 did a lot of damage to a lot of great courses in the Southern California area. Just to name a few.

Riviera
Bel Air
Pasadena Golf Club
Brookside Golf Club
Lakeside
The Valley Club of Montecito
Wishire

And many, many more

Each and everyone of them I have listed are in play today with the exception of Pasadena which became nine new Billy Bell Jr. holes (Altadena) due to the wonderful world of evolving real estate.

Some of them changed drastically, some for the good, some for the not so good, but each is still a well recieved club which feature some outstanding golf architecture IF it hasn't been ruined by an over-zealous green committee or golf architect that thougth he knew better. In each case when its the later, this is when that paticular course has regressed.

So, I'll put it to you like this (As it was put to me by Jim Wagner)

"What do you want, a ugly looking golf course that cost alot and is ruined by concrete, or a beautiful, natural golf course, built for a song that is ruined by concrete cart paths?

(That was a personal joke between him and I about our continual disgust for the paths at Rustic Canyon and the ridiculous cost to build them.)

[Jeff_Brauer]

Tommy,

Most, if not all of the clubs on your list are apparently built by some of the richest of the rich in the 1920's.  I don't know who built RC, but in trying to bring quality golf to the masses, the financial pressures are, or seem, greater today.

Had you been a member at Riviera, or the other clubs listed, or the Owner who had to pay for repairs out of your pocket, I suspect you may have a different opinion about the value of engineering some flood protection into a golf course.  At least, my clients with experience running golf courses do!

All I really know is that as my career goes forward, and I see the overall cost of adding drainage over the years, sometimes at great disruption to play and revenue, I plan more for the one time cost of controlling that through construction, to save the annual costs. I think its cheaper in the long run.

Its not that unusual for fairways to be built to five or ten year flood protection anymore, depending on budget.  Granted, the flood at RC may have been a fifty year flood that came at a bad time.  And Gil probably told the owner that for $3Mil they get a great course, with little flood protection, and for $4Mil they could have the same course, built up slightly, but the same style, and more flood protection.  The Owner probably decided to take a chance and lost the gamble in this case.  Others would win longer, but if floods are a possibility, they will eventually lose.  

Each site is different, but as you say, many CA courses are built in similar canyons, and the ridgetops will continue to develop, adding drainage, etc. and they have all had problems.  Part of architecture is anticipating those problems and trying to solve them as best as practical within the budget.  Earthmoving and plastic drain pipes of large diameter make that much more practical now than in the 1920's, so why not do it?

Most golfers would never notice, just as most don't know that approach to 18 at Riviera was built up signifigantly by Thomas......or that Riv's biarancas now have pipe beneath them big enough that you and I could walk through them, in order to help control the floods......

My point was that moving more earth doesn't necessarily mean an artifical earthmoving extravaganza and can have great benefits to the course.  Certainly Gil and Geoff did a great job, and the Golf Digest Best New Award resulting purely from their design style has ADDED revenue in spades, which can't be discounted either when evaluating the economics of RC.

[A_Clay_Man]

Really can't argue with the numbers.

150,000 rounds at an average of $40, is close to 6mil. Not bad. At that rate, it could flood every year, and as long it only costs 100k to fix, the numbers still work. But wait, I don't what it cost to fix.

I will tell you one thing, the rock work placed to protect certain features, at bends in waters movement, that I saw the engineers do at Antler Creek, was a bit of an eye catcher(reads sore). It may have been the color of the rock used, but I suppose something could be done to minimize the intrusion. And then, compared to the housing, the rocks are mo better.

[RJ_Daley]

One can learn a great deal from this discussion.  When architect-designers that are privy to the financing, projected or prospectus build up of construction and operating budget estimates, and are actually out there doing this stuff begin to discuss and even debate, then we get real opportunities to learn.

Here we have Jeff Mingay, Geoff Shackelford, and Jeff Brauer (what is up with the variations of Geoff-Jeff in GCA ) all speaking from personal experience.  Then we have some very observant contributors with insightful speculations like Grossman and Moriarity and Naccarato chiming in.  I love this sort of constructin 'dirt(ie) talk'.  

But, I'm sorry, I can't let one thing go without a bit of criticism of what I have read above.  That is about the following:

You sound as if you are questioning the credibility and work of a fellow ASGCA member in Gil Hanse by citing what "modern mainstream architects" would do? I'm sure you weren't trying to be unprofessional, well, actually, I'm not sure and I suspect you might want to clarify your comments to Gil privately, one practitioner to another....

While I didn't note what is subsequently alluded to as an edit about use of the word "equally", I can't see where one archie to another (even if it is second quessing) on a fundamental construction-budget cost projection and differing technique to flood consideration and control is too disparaging of one archie to the other.  I have always felt that the whole professional gag rule of the ASGCA is too protective of oneanother and serves to reinforce mediocrity and restraint of good ideas through curtailing honest debate and criticism.  

Geoff, you have not been shy to point out your thoughts on poor design or poor management of the game (i.e. USGA foibles) nor should you ever feel restrained to do so.  By the same token, another architect like Jeff shouldn't feel restrained to say he would do something another way, or that there may be another way to project costs of upfront construction of certain features like more flood control VS playing the 100 year flood plain odds.  Geoff, you very well explain the Rustic Canyon process and projections of budget (construction and maintenance) and all the attendant rationale.  Yet, we who read this stuff and "dig" it, can't learn if we don't hear the other style and approach of other archies and how they go about projection their design-construction budgets.  

Back to the economics....  We didn't really have much comment on the other huge feature of RC that is a profit center (or so I assume).  That is the food and beverage $$$.

Also, we only touched on the governmental nut to be cracked.  Rustic (I think) pays no property taxes.  That is the same big time feature of a place like Barona Creek being in the land trust of the Native Americans; is it not?  Assuming that property tax payents at the Barona Creek course are not comparable to privately owned (for profit and open to the public course), then how much less is Barona able to knock off of their green fees due to that factor?

[Jeff_Mingay]

Jeff Brauer,

I hate getting into speculation, but I highly doubt Gil told the owners of Rustic Canyon that "for $3Mil they could get a great course, with little flood protection, and for $4Mil they could have the same course, built up slightly, but the same style, and more flood protection."

I hope Geoff S. chimes in on this one.

There are clearly different approaches to golf architecture. "... the same course, built up slightly, but the same style..."? That makes absolutely no sense to me. It would have been impossible for us at Blackhawk, for example, to artifically elevated holes and end up with a similar product. The natural details that make the course unique would be gone.

I suspect circumstances are similar at Rustic Canyon.    

[Lynn_Shackelford]

RJ Daley
Government has ways of taxing one.  While Rustic Canyon is on government owned land, and there is no property tax, there is a possessory interest tax.  Rustic probably pays somewhere between $50,000-$125,000 annually.
On my little course I pay more than $10,000 annually in possessory interest tax.

[Jeff_Brauer]

Jeff Mingay,

You are right that I don't know what they may have told the Owner. Certainly no offense intended, but Geoff seemed to take some, and I am guilty of speculating about the process there in using  RC to illustrate a typical approach to a situtation.

All I can say is that I know for sure is that I would have gone through the excercise of calculating/approximating the amount of drainage that would come through 8 miles of canyon in various storms and made those comparisons, informed the owner of how far we could raise flood prone fairways for equal, if not perfect, flood protection everywhere (if one hole is out of play, its hard to book tournaments, etc.) and went from there.

And, in my approach to architecture, I would probably consider and/or recommend that fairway and others as far as practical, considering both intial and future costs, design intent and course beauty, even knowing that "little details" of the land may be sacrificed.  That's a value judgement on each project, but frankly, from photos or RC, I don't see a lot of fairway contours that couldn't be recreated, if necessary, where the customers - save a few purist/minmalists - would notice. And, the flood altered at least one fairway anyway....

If they needed raising 10 feet, I doubt I would recommend that. But I have raised fairways 2-4 feet, and with careful earthmoving, disguised it well.  I assumed - but don't know - that raising the fairway in question about that much may have controlled the floodwater.  I could be way wrong.  I also don't know how often that type of storm occurs, especially given the special circumstances of the denuded vegetation from the fire, which as Geoff notes, would probably double the amount of runoff expected.  No golf course designer could foresee and counter that particular combination of events, especially within normal golf course budgets.

My comments are on an RC thread, but generally come from my experience in building 45 golf courses, many of them in floodplain sites.  Please remember my main point - in many cases, moving a bit more earth or adding some drainage makes the ongoing maintenance and operations cost of a course lower each year in the future.  Nothing more, nothing less.  

I'm certain every other architect would probably approach things slightly differently.  

As RJ says, I come here partly to edumacate those interested in "real world" viewpoints of at least one practicing architect.  I'll bet my experience fairly well mirrors that of most archies today, though, and that's why I present the information here.

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