Fazio's Hartfeld Nat'l Goes Private

[Craig_Rokke]

Southeastern PA's original high-end public course announced last week that it was going private. Ownership cited increased
competition (perhaps a dozen or more mid to high-end courses have opened in the region since Hartfeld did) and a
subsequent drop in rounds-played as contributing factors.

This change is typical of the nationwide trouble in the golf business. As another local club manager put it "We didn't grow the game like we grew the golf courses. Demand didn't keep up with supply." The rounds played at his course have dropped from 42,000 to 32,000 from 1998 to 2001.

As the industry looks forward, most acknowledge that they'll have to find new and different ways to attract people to the game. Among the ideas being mentioned are the construction
of courses with less than 18 holes, where the game can be played more quickly, and cost less.

It will be interesting to see how the somewhat rurally-located Hartfeld does going private. Individual membership are starting at $15,000, with another $7500 for spouses. Annual dues will come in at another $6000. The way I look at it, golfers don't mind driving a ways for an occasional expensive round at a good course. Will they mind driving a ways for a course they've paid good money to join?

[Eric Pevoto]

Logan used those quotes from "another local club manager" to great effect.  I can safely say that our owner is not sweating in the least.  

I worked for said local club from 1997 to 2002 and the 42, 000 rounds we did in 1998 was an anomaly.  It was the first full year of operation with a clubhouse and newly renovated golf course (Hanse), so we were the new kid on the block.  

Additionally, as the article mentions, there was very little competition at the time.  What's happened in the years since is growth on either end of the price spectrum.  D'town is very much in the middle; at the bottom of  "upscale" prices and at the top of "mid-range" prices.  The course is much more walkable than the others and is a good value if you don't take a golf car.  I believe this will be the third season with no change in green fees.

As for Hartefeld,  I hope they do well as a private club.  I believe the restaurant (very, very nice) will stay open to the public.  Additionally, a recent article in the local paper mentioned that Fazio was excited at the opportunity to come in and tweak the golf course.

[Tim Weiman]

Eric:

I came away from my only visit to Hartefeld a big fan of the clubhouse. Nice bar to have an after round drink and the food was very good.

Do you think the place will make it as private club?

[Scott_Burroughs]

Nowhere did anyone (in the article) mention that HN is way overpriced and too far from Philly.  HN is much more at Wilmington-area course than Philly.  It's about 7 miles from Wilmington.  Davis Sezna promised $30 green fees for HN while it was being built and they started in the $80-$110 range.  How's that for deceiving the public?

Craig,

Gonna have to disagree with you on HN being SE PA's first CCFAD.  Wyncote opened before HN did.

[Dan Grossman]

I played HN in the spring of 1996 (early March) and they "robbed" me and my friend for $78 / round.  This was right after the bad winter that the NE experienced that year and the course was in terrible shape (muddy, grass not grown in).  I was fairly unimpressed with the course and felt as if I was WAY overcharged.  And Scott is right - the place is nowhere near Philly.  

DFG

[Eric Pevoto]

Tim,

The clubhouse is a really nice spot and if anybody knows how to run a restaurant, it's Davis Sezna.  

Their market is very much a Wilmington market, though I'm sure they pull from the southwestern suburbs of Phila.  With the exception of Fieldstone, which I believe has done very well, there have been no new private clubs in that area.  I guess Inniscrone should be included, but it is pretty remote from Wilmington, even more so Philadelphia.  

In short, I do think Sezna has made a good move.  The only question I have might be with the prices.

Scott,

I never knew that about the pricing promise.  You're saying it was to be a temporary, "early-bird" price?  Who knows what might have happened?  

They may have had a more favorable grow-in or waited to open until the golf course was mature and felt the price was justified.  No way they could survive at $30 a head with that facility.  The number of places that opened after them with $100 green fees was pretty amazing.

You're right that Wyncote opened earlier, but they operated with minimal amenities for quite a while.

[Craig_Rokke]

Scott-
Correct you are. I believe Wyncote was around for a few years before Hartfeld.

I know that last time I played H.N, I dropped about $125 for a weekend round. Though I do like the course, and the restaurant is as good as it gets for a public golf course, there are plenty of other local courses that leave me
with the feeling that my money was better spent. I do
hope they succeed.

[A_Clay_Man]

It really sounds like someone didn't do their homework if courses didn't factor in less desirable market conditions. A 25-30 percent decrease should've been expected at some point and factored into the long term operational costs and expected revenues.

Is there something else afoot here now with Kemper lakes going private too is this just  a grab for cash?

[Scott_Burroughs]

Eric,

I worked in Wilmington while HN was being built (same time as your neighbor, Stonewall, by the way) and there was a series of articles in the News-Journal (Wilmington's paper) about HN during the building process.  One contained an interview with Sezna quoting the $30 green fees.  I re-read it later while in a local golf shop, where they had the article posted on the wall.

Every couple of months, I'd go on a long, uh, lunch break, to go and drive around HN during the process to see the course being built.  The nasty winter of '93-'94 contributed to delaying opening by a year and by then, I had left the area for NC.  I played HN on a northeast golf trip in '97 in conjunction with a VT football game at Rutgers.

Interesting note about that trip was Bethpage (Black) was to be the highlight round of the trip, but when I called about tee times, I found out the course was closed 5 years ahead of the 2002 Open for Rees' renovation to be done!  Big time bummer on that, luckily I got to play the Black 3 years later on a work conference trip.

[Late night Guest]

Current issue of the Philadelphia Golfer notes that the Excelon invitational (4-man pro toneamint) will be moving from Inniscrone (nearby) to Hartefeld National.

[TEPaul]

If John Daly is playing in the Excelon again they ought to play both Inniscrone AND Hartefeld National. I bet he could get from one to the other with a good drive and a 3 iron!

[zmatzkin]

Their market is very much a Wilmington market, though I'm sure they pull from the southwestern suburbs of Phila.  With the exception of Fieldstone, which I believe has done very well, there have been no new private clubs in that area.  I guess Inniscrone should be included, but it is pretty remote from Wilmington, even more so Philadelphia.  

Actually, Inniscrone is less than 10 minutes from HN.  They are both almost an hour from the center of Philly without traffic.

I think Inniscrone made the mistake of thinking they would get members out from Philly, and it didn't happen.  Anyone think this move by Hartefeld opens up an opportunity for Inniscrone to become a daily fee course?

Zach

[mike_malone]

Both Inniscrone and HN are in the boonies.I could have done the marketing research for them.When the Deer Park  closed at midnight (or maybe it was 1a.m---who knew at that time?),we used to pile into someone's car(who remembers?) to go to the Anvil Inn near Kennett Square.
   We drove on Rte 7 past where HN is now.It was nowheresville then (1970 ish)and still is.Maybe they thought farmers  would want upscale golf.

[Craig Rokke]

The move to go private by Hartfeld will be of immediate benefit to a number of local publics: Glen Mills, Downingtown, Pilgrim's Oak, Tattersall, and Wyncote. It may even provide some far-reaching benefit to courses down in Maryland like Bulle Rock and Beechtree.

As far as Inniscrone's goal of attracting people from Philly, I don't know that that was the case. I think they were probably focusing on the markets of Chester County, Delaware Cty, and Wilmington. I think where they may gone astray is their estimate of the number of golfers willing & able to pay some pretty steep initiation fees and dues..

[Tim Weiman]

I'm confused about one thing:

HN is public and wants to try going private. Inniscrone is private and wants to try going public.......in almost the same market.

Does this make any sense?

Are the costs just too high at both to attract a sufficient number of golfers?

[Matt_Ward]

I'm kind of amazed that Davis Sezna didn't include Hartefeld National in his partnership with Eric Bergstol for their joint efforts in Empire Golf. Having Hartefeld National included among the rotary of courses that Empire has in its portfolio would have made for an interesting extension for those not living in the immediate area. Clearly, the golf course is really a part of the northern Delaware / Wilmington area than the Phillie one.

No doubt the SE portion of Pennsy has a number of interesting daily fees to visit. Now, there will be one less to compete with.

[TEPaul]

TW wrote:

"I'm confused about one thing:

HN is public and wants to try going private. Inniscrone is private and wants to try going public.......in almost the same market.

Does this make any sense?

Are the costs just too high at both to attract a sufficient number of golfers?"

Fellas:

Don't speculate on things just golf and golf markets all the time! Sometimes people do a lot of things for a whole lot of reasons that don't always have to do with golf and golf markets! Perhaps this is one of those times.

[Kent Salisbury]

As a longtime Wilmington resident, Hartfeld offers a good opportunity for the public golfer to play an above average Fazio designed golf course. The difficulty it has had is there are only a limited number of golfers-most who belong to private clubs- who want to pay $115+ to play more than once a season. Over the last few years homes have been built that have really taken away from the onces spectacular views of the Brandywine Valley. This combined with the local mushroom farms will negatively effect their ability to attract people who aren't already members of private clubs to join HN.  

Inniscrone was dead from the beginning. This course has a great layout with alot of interesting holse, but too far from civilization-Wilmington. It tried to open around the same time that Fieldstone opened, but FGC is much more centraly located to the people who could afford steep inititating and dues. Initially, Inninscrone was charging $15k up front, $15k upon starting the clubhouse, and $15k upon completion. Inniscrone has some homes now, but they are only on 1 fairway. The public can play their too- from 11:00-1:00 for $100. if you are going to spend the money go to Inniscrone.

[Craig_Rokke]

Tim-
I doubt if Inniscrone wants to go public. I'd bet the limited, mid day tee times are solely to offset operational costs
and help them to buy some time until a new, hopefully financially sound ,ownership group is in place.

[Mike_Cirba]

About 3-4 years ago I posed a question in here asking who was going to play all of these new CCFAD's that would make them viable in the long run, particularly if the economy took a nosedive.

It wasn't a difficult diagnosis.  Simply put, the demographics suggested that there wasn't/aren't enough high-end growth in the salaries of the population with the aging of the baby boomers and the shrinking demographics on the lower end to support all of this unbridled course building.  

At this stage, I'd be very wary as a consumer in "buying into" any of these public to private transitions.  Without wanting to specifically address the situation at Hartefeld National, where Mr. Sezna has proven himself an excellent businessman in multiple ventures, I'd generally be dubious about investing in any venture that seems to be on the way down.  One has only to look at the financial pressures that have led to the sudden transition, and has to wonder how that is going to suddenly turnaround by excluding the paying public from access.  The questions are obvious; how many members must join, and how much need they spend to make the place financially viable under this new model?  What corners must be cut in the interim?  How are the problems that caused financial difficulties in the first place going to change under this new structure?  The list goes on...

Frankly, I believe that even if the economy does a quick 180, and we go back to the peace and prosperity of the 90s, my guess is that probably somewhere around 20% of the high-end courses built in the 1990's will eventually find a new home...as real estate.

[HW]

Ol' wise one.  TEPaul is again so insightful.  I am also surprised no one has commented on all the houses that now adorn HN.

HW

TW wrote:

"I'm confused about one thing:

HN is public and wants to try going private. Inniscrone is private and wants to try going public.......in almost the same market.

Does this make any sense?

Are the costs just too high at both to attract a sufficient number of golfers?"

Fellas:

Don't speculate on things just golf and golf markets all the time! Sometimes people do a lot of things for a whole lot of reasons that don't always have to do with golf and golf markets! Perhaps this is one of those times.

[Craig_Rokke]

I agree with Mike's prognosis. It will be strange to see courses
that I remember being built listed as "NLE's."  More new courses, many in that mid price range, will continue to be built, and that will squeeze the noose even tighter on those
golf-boom ccfad's.

[SB]

You're right that some courses will be bulldozed.  I'll make one slight change to your evaluation, however.  In an overcrowded market, the $100 CCFAD's will drop their prices, which will force the $60 courses to do the same, and so on down the line.  When the pain gets to the bottom, the inexpensive track will be the one to see the plow.  The two factors are:  1) more expensive courses (generally) make more money; and 2) older, cheaper courses generally have more urban locations which means higher land prices for houses.

[Craig_Rokke]

Does Davis Seszna have a financial interest in the periphery housing at Hartfeld? If so, does the course being private in a non-resort area stand as an advantage to home sales?

[SPDB*]

I'm kind of amazed that Davis Sezna didn't include Hartefeld National in his partnership with Eric Bergstol for their joint efforts in Empire Golf. Having Hartefeld National included among the rotary of courses that Empire has in its portfolio would have made for an interesting extension for those not living in the immediate area. Clearly, the golf course is really a part of the northern Delaware / Wilmington area than the Phillie one.

No doubt the SE portion of Pennsy has a number of interesting daily fees to visit. Now, there will be one less to compete with.

Matt - Hartefeld was originally included in the Empire partnership. plans must have changed. Indeed Hartefeld was pictured on the cover of the Philly Golf Magazine story on Empire.