Golf Course Failure

[Kyle Harris]

Does poor golf architecture cause golf courses to fail and close?

If yes, any examples where it was an architectural reason?

If no, what can good architecture do to prevent the other reasons?

[James Bennett]

Good architecture can encourage a second owner to come in and re-establish/retain the course.  Hopefully (thinking of StAB).

James B

[Kyle Harris]

Good architecture can encourage a second owner to come in and re-establish/retain the course.  Hopefully (thinking of StAB).

James B

James, that's a great example actually.

I'm really trying to determine if there is a true critical market for golf architecture? Is bad architecture ever really rejected by the public to the point where the course cannot sustain itself, or do other factors like poor business planning and management have more to do with a golf course failing?

Are golfers really more like PT Barnum's fool?

[John Moore II]

Kyle--I would say that architecture can play a part in a course closing. If a public course is designed to be very hard, but doesn't have a high magazine ranking (for whatever they're worth) to cause the public to play them regularly, then it stands a fair chance of folding. I have heard this about North Palm Country Club, the Nicklaus redesign I have heard is very hard and very few people are playing there compared to before. In that way, the architecture is hurting the course, even though its a Nicklaus "Signature." But other than that, I would say that architecture does not affect the course very much. Poor architecture that is fun and cheap for the public to play will make money. So in most cases, courses fold because of poor business planing, not poor architectural planning.

[Kyle Harris]

JKM,

But is it also reasonable to say that the cost of doing the remodel for North Palm is a MAJOR contributing factor? How much did green fees go up to cover the cost?

Here's the ultimate goal of the thread: Can golf architecture be considered an art or CRAFT with no real critical market? I've never heard of a painting not selling because the supplies were too costly...

[John Moore II]

I am not sure how much the fees at North Palm went up after the remodel, but the fees seem to be in like with other mid-upper level courses in the market. I do not think the general golfing public wants art, so to speak. The normal public golfer is like the man who walks up to the bar wanting Coors Light on Tap. He simply wants to drink. If you can give him Coors in the bottle or maybe Rum & Coke for the sam price, he'll be happy, but he won't pay any more. Good architecture can sell a course to the public, but not if it is a very hard golf course and expensive. There has to be value somewhere.

[Steve_ Shaffer]

North Palm Beach CC is a public course with yearly memberships available for residents of the Village of North Palm Beach. Many residents, those of the senior persuasion, found the Nicklaus redesign "too difficult" and chose not to renew their memberships. Public rates, in season, went up to the $100 range. Even Cary L. found the new greens "too severe." I thought they were "challenging" and required multiple plays to figure out. In any event, the financial impact remains to be seen. Nicklaus did waive his design fee as he is a resident of the Village. This was his second muni.

www.village-npb.org/index.asp?Type=B_BASIC&SEC={6D232B5E-0AB1-4D56-B46C-A3F78421D5D1}

[Tom_Doak]

Kyle:

Markets are what really cause golf courses to close.  If a course is unpopular because it's too hard or too easy or whatever, but there's a market there, then the golf course will be redesigned and there are obviously tons of examples of that.

Your question says "architecture" but implies that you want examples of courses where the design strategy is what was faulty.  I would think it would be much more common for courses to fail because they're too expensive to maintain properly ... and that is "architecture" to me.

[Kyle Harris]

Kyle:

Markets are what really cause golf courses to close.  If a course is unpopular because it's too hard or too easy or whatever, but there's a market there, then the golf course will be redesigned and there are obviously tons of examples of that.

Your question says "architecture" but implies that you want examples of courses where the design strategy is what was faulty.  I would think it would be much more common for courses to fail because they're too expensive to maintain properly ... and that is "architecture" to me.

Tom,

That's another consideration I've thought of. Are there courses where maintenance (either in keeping grass alive or simple logistics) has caused the place to price itself out of the market? I think we should exclude all the non-golf course infrastructure like clubhouses and stick to what's between the 1st tee and 18th green. These days, I'd even lump the practice facilities with the clubhouse, since it's ultimately the golf course that draws the consumer.

What factors make an architect refine the craft? What have you refined or honed in terms of your techniques of design between High Pointe and your latest project?

[Peter Wagner]

Hi Kyle,

Courses rarely fail completely.  Developers fail all the time but usually the developer goes under but the course remains.  Out of the 15,000 course in the U.S. only 153 were closed for good in the last 5 years.  Out of the 153 I think it was 96 were sold to develop houses.  Courses rarely fail completely.

What is more common is for a business plan to not match a course design (and vise versa!) but that usually ends up with the developer going under.  The course remains and is bought for cents on the dollar and run at a lower level for a lower daily or monthly fee.

This is many peoples prediction for the newish Classic Club in Palm Desert.  The course design fell well below the expectations of the business plan so poof - lower prices quick!  And all of a sudden the original developer could be in trouble.  Will it fail?  No, the course will be there 50 years from now.  The developer on the other hand...

Best,
Peter

[SB]

I like to think of it as this:  There is a base value that a typical golf course is worth given its location.  Average course in Chicago:  $8M, average course in Indianapolis:  $3M.  With a "typical golf course" being an decent track by a good regional designer and a standard, 7,000 SF clubhouse (for daily fee courses).

From there, there are a great number of factors that influence whether a particular course exceeds or is below that average value, the largest of which is location (freeway access, side of town, etc.)  Other factors include the size and efficiency of the clubhouse, management, and architecture, which can be very important.  Difficulty, maintenance cost, uniqueness, designer name, are all contributors to the revenue and expense.  That determines the profit, which in turn determines the value. 

What determines whether or not a course "fails" is your definition of failure.  Most people generally consider bankrupcy or foreclosure a failure.  But debt, cost, value, and purchase price are all independent of each other and you can have a course worth $20 million go bankrupt if it has $30 million in debt.  Does that make it a failure, not really, it just means their loan is too big.  On the other hand, if you spend $20 million to build the course, have no debt and it turns out to be worth $1 million, you aren't bankrupt, but I would call that a spectacular failure.   

Long story short: architecture isn't the biggest determinant of financial success, but I would say it's up there.

[Adrian_Stiff]

I think if a golf course is badly designed it can have a significant impact but it needs to be bad rather mediocure, because plenty of people are happy enough with mediocure.

From a UK perspective 70% of new golf courses (last 20 years) constructed have gone bust, although probably 97% have been taken over via a sale from the bank etc.

Plenty of 'named' course have fallen as well, some well designed as a golf course but probably a bit too expensive to maintain.

The general reason is the losses generated by a lavish clubhouse.

[TEPaul]

"Are golfers really more like PT Barnum's fool?"


Kyle:

Yes they are although I don't think P.T. Barnum called them fools. He called them suckers!

I believe that this particular vein is the only area Max Behr's general philosophy about architecture was wrong and I think the ensuing years since he wrote it has proven that to be the case.

In other words, it seems like golfers generally pretty much just except what they are given but the question remains if they were generally given architecture that was really good would they understand the different and like it better?

In my opinion, that is essentially the central question for golf architecture's future for people such as us.

[BCrosby]

From a UK perspective 70% of new golf courses (last 20 years) constructed have gone bust, although probably 97% have been taken over via a sale from the bank etc.

Plenty of 'named' course have fallen as well, some well designed as a golf course but probably a bit too expensive to maintain.

The general reason is the losses generated by a lavish clubhouse.

Adrain - 70% failure rate ?!? That's incredible.

As for lavish clubhouses, we in the US know from lavish clubhouses. Your admonition about them is a lesson US developers are learning the hard way.

Bob

[archie_struthers]

 

Absolutely Kyle ..  golf courses that are too difficult are almost guaranteed to fail...if people play bad they lose interest...with a few famous exceptions to the rule..

cheers

Archie

[Mike_Young]

The absolute biggest reason for golf course failure in the US is EGO plain and simple.
In so many cases these courses are big boy toys and the owners become caught up in them....grow tired and then sell at a loss or bankrupt.....almost always they are fairly succesful people who make decisions pertaining to golf that they would never make in their own business. 
AND the toughest part of taking these courses and making them work is the "built-in expense" whether it be clubhouse or course maintenance. 
Golf is an addiction that can be as bad as alcohol for some....

[Bruce Katona]

We look at perfect examples of overspending on construction all the time to see if a good facility fits our business plan and model.  If an asset can be acquired at the correct price so debt levels are reasonable, operational budgets realistic, local demographics strong enough to support the asset, and the course reasoable to get around (speed of play with moderate challange) as pace of place drives revenue, we'll bite and acquire.

[Lou_Duran]

Bruce,

Can you disclose the financial criteria that your group looks for?  Is your determination of the price you will pay for an asset influenced by future performance based on better managment and/or capital infusions?  Or is the basis solely on currently cash flow?  I am just curious, but what are the going cap rates on properties that are fairly stable?

[Forrest Richardson]

Many judged the closure of what was once a Greg Norman course (now Mirabel, by Fazio) to be a failure. I cannot say one way or another — but it does pose the question of how $15 million could be spent on a course, and then it was closed before it was a month old...only to be redesigned.

[Steve_ Shaffer]

Re Mirabel(Fazio), formerly Stonehaven(Norman)

I understand the reason for the closure of the Norman course was that it was deemed "too difficult" for the new owners(Discovery Land) to sell as a private membership club for residents. After spending big bucks for houses who wants to get beat up on the golf course? As it turns out, not many buyers at Mirabel were spending the additional money(100K+) for the memberships so Discovery opened up membership to non-residents. I understand that about 50% of the membership is now non-residents.

[Jim_Coleman]

    Here's a course that failed because of bad architecture  -  Inniscrone in Eastern Pa.  Any other explanation is just an excuse.

[Craig Van Egmond]

Careful Jim, I think you may be picking on a GCA favorite Gil Hanse, so that can't be possible. 

[Joe Bausch]

Careful Jim, I think you may be picking on a GCA favorite Gil Hanse, so that can't be possible. 

Thank you for your response Craig!  I'm confident Jim knows his golf courses, but this one has apparently slipped under his radar.   

Here is a classic case of the course making it out to be something, foolishly, that it could never attain.  I heard they claimed in promos to be like Merion.  I don't remember those ads, but perhaps they really did exist, which would be silly.

So if you go into a course with expectations of a 10, of course you'll be disappointed.  I also think other things are coloring the opinions of people like Jim on Inniscrone:  you park about 1/16 mile away from the course and must take a cart to the clubhouse (originally a big clubhouse was supposed to be built near the parking lot).  But this obviously has nothing to do w/ the architecture.

[Jim_Coleman]

    I've played Inniscrone.  I know Inniscrone.  Not only do I think it is a bad golf course, I know many people who agree.  Indeed, other than the Gil Hanse admiration society here, I don't know anyone who has anything particularly nice to say about it.  THAT'S WHY IT FAILED!
    Having to travel 1/16 of a mile from the parking lot to the clubhouse is hardly the reason it failed.  Nor is the fact that it's not Merion the reason it failed.  If that were a reason for failure, there wouldn't be very many courses around today.
   I've opined here before on which holes are bad.  10, of course, is notoriously bad.  So are 7, 16 and 17.  And, as I've said here before, I don't believe 5 was actually designed by anyone.  I think Hanse delivered a 17 hole course by mistake, and so someone who knew nothing about golf (maybe he was building the clubhouse) had to create an 18th hole somewhere.
   Sorry.  I like much of Hanse's work.  I love Applebrook, for instance.  And I thoroughly enjoyed Rustic Canyon.  But Inniscrone is a badly designed golf course, and that's why it failed.  Capitalism works.
   

[Mike_Cirba]

Jim,

You're wrong to blame that on architecture.   There are plenty of clubs in the Philly region with WAAAAYYYYY worse designs that have succeeded in bringing in membership, and there's one in Oaks that comes to mind immediately.

Inniscrone is not without a couple of bad or compromised holes, but it also has absolutely knock-out, fabulous holes and way more of the latter than the former, but any golf course that takes an hour to get to from 15 miles away is doomed from the start.

No matter which large population area you start from, you can't get there from here, and therefore makes no sense to join.

Hartefeld National, a course with bland Tom Fazio architecture that most every "Joe Sixpack" golfer would love, suffers from the same location problem and has been through much the same revolving door of ownership and private/public rotation.

The fact that the only highway of any note out in that part of Chester County is the Bataan Death March of Route 1 dooms both courses to early graves.

Location, location, location...