A nicely written article by Mr King. The situation is similar on this side of Lake Michigan as well. I played this week at a parade of homes course design that was built about 3 years ago and had opened public with intent to garner enough members to go private, and has seemingly faltered. The original impetus I believe was the home building frenzy. Low interest rates stimulated this particular local area real estate developer to grab a totally unremarkable series of flat fields to offer relatively moderate priced lots amidst a golf course lay out. In their haste, they didn't seem to think about the fact that the homesite area is in the middle of one of Wisconsin's most stinky towns (Kaukauna paper mills) and that shortly after the homesites commenced building, a huge unsightly oil fired power plant was to be built in some cases 1/4 mile from the homes!
But, low interest rates stimulated early sales of lots and the building of 250-500K homes which is pretty nice for this area (2300-4000sq ft).
The course opened with about 50-60$ green fees, and now is offering discount cards that work out to about $28 per round. Another new course (well designed) nearby has gone through bankruptcy two years after opening, and the new owners (who bought it for less than 1/2 construction costs) aren't reportedly doing much better.
Could it be that banks lend $$$ for stupid and untested reasons to enterprises and developers that are inadequately prepared to demonstrate realistic proforma data including proper golf market demographic analysis?
To be sarcastic; I think that too many banker-lender-private $ placement specialists are playing too much golf with big new drivers that lengthen their senior feeble games and inflate their perceptions of golf - the buisness. Because their drives go longer with new ball and impliment tech, they somehow think that golf is getting bigger - like their drivers. So, they place the $$$ on new unneeded golf development.
I may not know much from a truly educated financial analysis stand point, but I think the whole golf development business has become something of a psycological confidence game anyway.
