High Pointe won't open--what does that mean?

[Peter Pratt]

I was up in TC last weekend and heard again what Tom Doak mentioned on an earlier thread: High Pointe won't open this year.

What exactly does this mean? Will someone still be maintaining the course, so that it might be able to open in future years?

I pray that this is true. I've had the good fortune to play High Pointe often over the years and, ratings aside, it is a GREAT course. Every time I play it I have a new favorite hole, a sure sign of a superb golf experience.

[C. Sturges]

Is there anyone there or could you go out and play it?  I never got the chance but would drive over to play it before the grass starts growing.  Any ideas.
Chris

[John Moore II]

Is there anyone there or could you go out and play it?  I never got the chance but would drive over to play it before the grass starts growing.  Any ideas.
Chris

I suppose you could get the phone number and call the pro/gm over there and see what he says. I figure he'd say no. And I would certainly advise against just going out there on your own, you may find yourself on the wrong side of the law.


As far as the course goes, I can see the reasoning for not wanting to open. I mean, you can half-way maintain it a little bit while its closed, keeping it playable for next season. But given the severe loss of jobs in Michigan with more to come possibly, it would likely not make enough money to cover expenses at all if opened. Though I feel like if it was me, I'd do what I could to run the shop and carts with just 2 or 3 people total and cut back to 3 or 4 on the green staff, just enough to put carts out in the morning and run the register, and mow the greens daily and the fairways every so often. And cut back on everything else. But, as I said, given the likelyhood that they won't make nearly enough money to cover expenses, I might make the choice to keep closed for the season myself.

[RSLivingston_III]

I just popped in to see if there was anything on High Pointe. Just saw their website and the statement that they weren't opening.
I do hope they can maintain it and reopen in the future.

[Craig Van Egmond]

Tom Doak had this to say on another thread about High Pointe..

"I may put together a group to buy or lease High Pointe, provided they are willing to deal for a reasonable price.  But it may have to sit for a year before they see the reality of its present market value."

[Richard Hetzel]

Just in case anyone wants to see some pics of the course....here are a few from 2006. I wonder if the Grand Traverse Resort will go after it considering they now operate Lochenheath as well as their 3 other courses....hmmmm....

[Tom_Doak]

Rich:

Grand Traverse Resort lost money on Lochenheath last year and probably won't repeat their mistake this year.  That's why they also have little interest in buying High Pointe, except at a "fire sale" price.  They think those courses take play away from the Resort, and would prefer to see them close.

[Buck Wolter]

The Grand Traverse Resort & Spa operated Lochenheath last summer after developers closed The Club at Lochenheath a year ago and laid off about 30 employees. But Resort officials said they have no plans to re-open the course this season.

"We just haven't had any conversations with them about doing that again," Resort spokesman J. Michael DeAgostino said.

http://www.record-eagle.com/local/local_story_065225527.html

I know the economy is rough but letting a course go fallow seems extreme in both cases. Couldn't you barter labor to mow the place? Once it's gone native I would think it would be tough to restore.

Maybe Michigan will stop being so beholden to the Auto Unions and let some entrepreneurial spirit flow, talking to people who run small businesses they say it's an onerous state to do business in.  Perhaps  it's just not worth the risk anymore.

[Tom_Doak]

Buck:

High Pointe management has asked for our advice on how to keep the course from "disappearing" while spending minimal dollars.

Lochenheath has an even bigger stake -- there is still a lot of unsold property around the golf course, the value of which has gone down considerably, but will go down even more if the golf course disappears.  I would think that they'll try to maintain it at some level whether they open or not.

I run a small business in Michigan and I don't think it's a particularly onerous state in which to do business ... but then again golf course design associates are not a union.

[Mike Nuzzo]

Though I feel like if it was me, I'd do what I could to run the shop and carts

Do you really need the carts at this point?
I'd make everyone walk and punch them in the back for not coming more often.

[Jim Nugent]

Though I feel like if it was me, I'd do what I could to run the shop and carts

Do you really need the carts at this point?
I'd make everyone walk and punch them in the back for not coming more often.

Sounds like quite a marketing plan. 

[Buck Wolter]

I run a small business in Michigan and I don't think it's a particularly onerous state in which to do business ... but then again golf course design associates are not a union.

Tom-
The Michigan Business Tax is what I've heard is the killer, hopefully you don't get taxed on revenue earned outside the state.

Here are some of the highlights:
-  Business income taxed at a rate of 4.95%
-  Modified gross receipts tax (sales minus purchases from other firms) at a rate of 0.8%
-  Banks pay alternate net capital tax (net worth at a rate of 0.235%)
-  Insurance tax rate increased from 1.07% to 1.25% (current credits retained

Michigan just ranked 47th in Best States to do Business in.

Expressing the prevalent attitude among CEOs, one CEO said, "Michigan and California literally need to do a 180 if they are ever to become competitive again. California has huge advantages with its size, quality of work force, particularly in high tech, as well as the quality of life and climate advantages of the state. However, it is an absolute regulatory and tax disaster, as is Michigan."

Buck

[Joe Hancock]

For many years, the Michigan Single Business Tax was based solely on payroll, not income. This is(was?) a tax on top off all other business and personal income taxes, BTW.

If I ran a small company that netted $100k and it took 15  well paid, full time employees to do it, it was taxed more than a company who netted the same thing with 5 minimum wage employees.

Joe

[Tim Nugent]

Tom Doak - just curious, what was your program on how to keep it from going fallow?

[Jeff_Brauer]

Tim

I am sure that is proprietary.  We will all be adding "fallow golf course consulting" to our resumes soon.

[Joe Hancock]

Tim

I am sure that is proprietary.  We will all be adding "fallow golf course consulting" to our resumes soon.

It's too nice a day to be so angry.

Joe

[Chris_Blakely]

I wonder home many other courses in northern Michigan will end up with the same fate in the coming years.

I hope something can be done to save Lochenheath and High Pointe.

[Steven_Biehl]

I don't see any reason why High Pointe can't open.  I know it is not the best in the long run(business wise), but in the short run, if they were willing to drop there rates to say $25 for 18 and a cart, they would be packed this summer.  Not only would they get the resort goers, but the locals would be willing to pay that price as well. Just keep the grass mowed and rake the bunkers to keep expenses low. They could cut expenses more by just being open on Fri, Sat, Sun also. Grass can go a couple of days without being mowed, so there would be no labor expenses for those days during the week when they are closed.  Lochenheath could do the same thing also, although I do not know the whole story management wise with that company.

I know it may not be what the management would want to do, but it would at least be a way to make money.  There are a lot of locals up here that would be willing to pay for golf at a reasonable rate, but there are not a lot of options.

[Ryan Farrow]

I run a small business in Michigan and I don't think it's a particularly onerous state in which to do business ... but then again golf course design associates are not a union.

Tom-
The Michigan Business Tax is what I've heard is the killer, hopefully you don't get taxed on revenue earned outside the state.

Here are some of the highlights:
-  Business income taxed at a rate of 4.95%
-  Modified gross receipts tax (sales minus purchases from other firms) at a rate of 0.8%
-  Banks pay alternate net capital tax (net worth at a rate of 0.235%)
-  Insurance tax rate increased from 1.07% to 1.25% (current credits retained

Michigan just ranked 47th in Best States to do Business in.

Expressing the prevalent attitude among CEOs, one CEO said, "Michigan and California literally need to do a 180 if they are ever to become competitive again. California has huge advantages with its size, quality of work force, particularly in high tech, as well as the quality of life and climate advantages of the state. However, it is an absolute regulatory and tax disaster, as is Michigan."

Buck

Buck,

Cali was really helped out when they deregulated the energy market. Right?

[Jim Thompson]

Maybe we should move the economics of Michigan to another thread.  The history and impact of Michigan tax policy, alternative tax items and the impact Michigan's approach to property tax valuations has on golf AND new business of any kind is incredible.  I hope the state powers learn their lesson over the next couple years and remember how the state was developed over the years.

[Robbie Roberts]

This would be a good time to allow High Pointe to return to the more native grasses of its youth -- it would firm up, require less water and lie "fallow" more easily, if indeed that unfortunate scenario has to be played out.  I'm hoping golf's better angels won't let that happen.

Robbie Roberts

[Tom_Doak]

My mother-in-law called this morning to let me know that the closure of High Pointe was noted today in  The Wall Street Journal!

I guess I am testing that theory that all publicity is good publicity.

Buck W:  No, the Michigan Business Tax does not tax out-of-state earnings ... each state chases taxes for all the business done in their states, so they have to exempt earnings from outside.  It's actually counterproductive ... we earn small amounts in many states, usually under the minimum amount required to pay state business taxes, while all of it reduces our liability in Michigan.  Although my accountant loves all the paperwork, this year I had to file seven state returns!

[Tom_Doak]

Jim Thompson:  As a potential future golf course operator in Michigan, I'd love to hear you expound on that last post, either here or in private.

Robbie:  There's not much fescue left in the fairways at High Pointe after the past few years of watering and fertilizing, so I suspect a dry summer will leave it in ragged shape.  But I'm curious to see what happens.

[Richard Hetzel]

Rich:

Grand Traverse Resort lost money on Lochenheath last year and probably won't repeat their mistake this year.  That's why they also have little interest in buying High Pointe, except at a "fire sale" price.  They think those courses take play away from the Resort, and would prefer to see them close.

Tom, they (Grand Traverse Resort) should close Spruce Run and purchase High Pointe! (IMO, I guess they could close the Bear too). We skipped playing SPruce Run for $80 and enjoyed HP for less than HALF that!

I usually spend a week at Glen Lake each summer, and I wish I had played Lochenheath when I was there....oh well, maybe next time.

Does the lack of a lengthy golf season hurt the courses up there as well? It must, as I bet revenues really drop off in September...

What about places like Arcadia Bluffs? Will they be "immune" from this economic downturn as well? Will their $180+ greens fee be lowered to attract more golfers? OR, do their high prices keep them in better shape, even with less golfers filling the tee sheet?

[Ed Oden]

Just curious, what if anything is going on with High Pointe?