[Marty Bonnar]

...or at least the developers do!

http://www.thecourier.co.uk/output/2005/01/15/newsstory6720270t0.asp

This is the latest news of the 'Other' new Course that's been slated for St Andrews.

For those who know the area, these are the fields next to The Dukes at Craigtoun, on the south-western outskirts of the Town.

So, why not treat yourself and purchase some goood ole' Scottish Real Estate??

FBD.

[Jeff_Mingay]

Interesting.

Although, I don't know who would go to St. Andrews to play any other course aside from the Old  

[Lou_Duran]

Martin,

How do you view this whole thing?  I am curious about how the project is perceived locally.

[Mike Nuzzo]

How about you, Jeff and myself steal the design contract and have Lou developer!

[Marty Bonnar]

Mike & Jeff,
I don't think Lou would speak to us ever again, once we managed to lose him several million dollars here!

Lou,
these developments actually scare me!

Given that the St Andrews Bay Hotel and its Courses had to re-finance something like £56m last year and had debts of something like £7m, I can find no reason to believe that yet another 'Private Club' in the St Andrews area will be in the least successful. Even more so, in that this idea is meant to be one of those limited membership deals with on-site accom.

It's my guess that Kingsbarns only really works because the owner doesn't really need to make any profit and pretty much treats the place like a playground for him and his pals which, thankfully!, he happens to allow others to come and enjoy too! (The money from Dunhill must help too, I suppose).

If you've been in St Andrews in the last ten years you'll maybe remember the big, red-sandstone, drum-shaped edifice at the West entrance to the Town. THAT was meant to be 'The International at St Andrews Golf Club', or words to that effect, and couldn't raise enough interest to even begin trading when the Dollar was STRONG!

FBD.

[David_Tepper]

Martin-

Oddly enough, there was a feature article in the Wall Street Journal last week about the large number of Europeans (mostly from GB&I!) who have been buying second (and in some cases third) homes in the US. For sure, it is being driven by the weaker US dollar.  There were comments about how much more you get for your money in the US than in the UK.

Most of the transactions have been in Florida and New York City.  There were even comments that the foreign buying has been driving up home prices here and pricing the locals out of the market!

Although the super rich are indeed different from you and me, it sure looks like the shoe is on the other foot for the time being.

DT
     

[Lou_Duran]

Mike,

Thanks but no thanks.  If I get into the golf business, it will unlikely be as a developer.  Maybe as a vulture, though I think the market still has some ways to go.

Have you heard anything in your industry circles about Arnold Palmer Golf Management buying a 20 property Texas portfolilo from American Golf Corp.?  The price was not released, but I am curious.  My former home club was included in the package, and couple of weeks ago, I received a letter from the new management company offering me zero initiation if I joined again and signed a one year contract.

Martin,

I don't understand the economics of golf in Scotland, but I am assuming that the principals of the proposed project do.  With green fees on TOC around $180 when I was there a couple of years ago and the scarcity of tee times, maybe there is enough demand.

Hopefully the investors, members, and debtors will do their due diligence before going forward.  Unless there is some public financing involved, it seems to me that the area can only benefit, even if the project fails for the first owners.

Would you be nearly as concerned if it was a low to mid-scale project, designed by a UK national, and open to the public?  What will this club's competition be?

[David_Tepper]

Lou Duran-

There was an article in the Houston Business Journal (3/11) about A. Palmer Golf Mgmt. buying 16 courses from American Golf in Texas. They paid around $105 million.  The article commented that the price paid seemed rather high.

If you dig around on www.golfobserver.com you might be able to pull the article up. It was posted there on 3/14.

Based on what I have seen from Palmer Golf's efforts running the Presidio GC in San Francisco, I would keep my distance from them.

DT

[Lou_Duran]

David T,

Thanks for the information.  The package included 20 courses, and I am thinking that the previous deal which fell through had a contract price of around $125MM.

Supposedly, Great Southwest Golf Club where I belonged for a long time was one of their top performing properties, and maybe the best course in its Texas portfolio.  This course has had fewer members each year for the last three or four (from 550 to around 300), and well over $1MM in deferred maintenance.

I had an interest in forming an LLC to acquire the club, but was rebuffed by American Golf Corp.  My own analysis indicated that it would be a reasonable investment if it could be purchased for around $4MM.

At an average price of $5.25MM per course, the new owners will have to be extremely patient or at least some of the courses will come back into the market.  BTW, when AGC purchased Great Southwest in a package of five courses, I am told that they put it in the books at $10MM.  

[Robert Thompson]

Hey gents: According to Mark Parsinen, Kingsbarns was done quite affordably and is cash flow positive. Mark has lots of moeny, but it is relative. He wants to make these projects work (including his new one at Inverness), which is why you find a small clubhouse and why he was so careful in how earth was pushed around at Kingsbarns. To call it a playground for his friends would be overstating things, I think.

R

[David_Tepper]

Lou Duran-

The article says 16 courses ( 7 in Houston, 6 Dallas, 2 San Antonio and 1 Austin) and estimates the price at $107 mil. Maybe the 4 fewer courses accounts for the difference between $125 mil and $107 mil.

DT

[Doug Siebert]

I don't understand the economics of golf in Scotland, but I am assuming that the principals of the proposed project do.  With green fees on TOC around $180 when I was there a couple of years ago and the scarcity of tee times, maybe there is enough demand.

The green fees and scarcity of times at TOC have absolutely nothing to do with the success of any other projects in St. Andrews.  There's only one TOC.  When you compare the prices and accessibility of the New, let alone the Jubilee and the Eden, the situation perhaps doesn't look so ripe for new entrants.

I wonder where the market is for a private course in St. Andrews.  Maybe its so braggarts can tell their friends they "are a member at St. Andrews" to impress them

[Sean_A]

I hope the project fails.  St. Andrews is being ruined by development.  The whole town might as well be bought by Disney World.  The town is certainly beginning to resemble an amusement park.

Ciao

Sean

[Lou_Duran]

Doug,

You are absolutely right.  I meant to note TOC's special status, but when I was there a couple of years ago, the New seemed pretty expensive as well and it was mostly filled up.  North Berwick and Carnoustie were hardly cheap, and it is my understanding that most courses with name recognition are very high priced.

Sean,

I avoid amusement parks like the plague.  My impression of St. Andrews is the opposite of yours.  It seemed like a very quaint town where golf and its history is celebrated.  A bit commercialized and expensive for my tastes perhaps, but a most enjoyable place nonetheless.

Why you hope that the project fails is beyond me.  There is plenty of fallow land out there and a substantial need for jobs.  If someone can build an upscale project without cannibalizing rounds from other courses, who loses?

[Tags:]

Tags:

[Tags:]

Tags:

Call to undefined function theme_linktree()