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Matt_Ward

WSJ's article -- the collapse at Hokuli'a
« on: May 20, 2010, 11:08:44 AM »
Saw the WSJ article the other day on the collapse of Lyle Anderson's mega development on The Big Island -- Hokuli'a.

I played the Nicklaus course a few years back and really enjoyed the layout. The views are outstanding but the development was quickly involved with a range of lawsuits plus the falling out of the economy resulted in just nine (9) completed units there.

Anderson had great success w Desert Mtn but Hokuli'a's failure is indeed a great example of what casualities lie ahead in the golf industry.

An auction on the property is going to be held soon -- but the prices to be paid will be far less.
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Kirk Gill

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #1 on: May 20, 2010, 11:32:42 AM »
Matt, is this what's ahead for the golf industry, or for the high-end real-estate industry?

Or has the former become so entwined with the latter that they cannot be separated?
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Steve_ Shaffer

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #2 on: May 20, 2010, 11:37:05 AM »
Here's the link:

http://online.wsj.com/article/SB10001424052748704912004575252713409264610.html?mod=WSJ_Real+Estate_MIDDLETopNews

Anderson's Superstition Mountain in AZ was recently sold to a member or group of members after a foreclosure or a deed in lieu. It is now semi-private-one course public on alternating days. Membership costs have dropped significantly.

Discovery Land, another high end developer, seems to be hanging in there.

The Cliffs is having problems.
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"Some of us worship in churches, some in synagogues, some on golf courses ... "  Adlai Stevenson
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George Freeman

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #3 on: May 20, 2010, 11:49:11 AM »
Quote from: Steve_ Shaffer on May 20, 2010, 11:37:05 AM

Discovery Land, another high end developer, seems to be hanging in there.


From my understanding, Discovery Land developments are the absolute crème de la crème, servicing the wealthiest top 1-2% of Americans/others.  Looks like if done right, this model works; but it is a VERY small niche I would imagine.
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Matt_Ward

Re: WSJ's article -- the collapse at Hokuli'a
« Reply #4 on: May 20, 2010, 02:14:39 PM »
Kirk:

The property in Hawaii had some really serious issues that would have been present irrespective of the economic collapse.

The shame of it is that Nicklaus did a sensational job with the course there. Few will likely play it and the future is quite uncertain with the facility there.

Great view of the ocean and plenty of neat things when there.

But ...

The market for such places is not really happening -- buying on spec is over. People want a good deal more before even contemplating the thought of a purchase.

Hokuli'a could be the golf industry Edsel -- sad to say -- but the layout, minus some miracle, will not be able to rise above the anchor held firmly in place around its neck. A pity ...
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Jim Franklin

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #5 on: May 20, 2010, 02:18:21 PM »
Is Gozzer Ranch a discovery property? I thought it was and they do a wonderful job.
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Mr Hurricane

John Foley

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #6 on: May 20, 2010, 02:26:47 PM »
Quote from: George Freeman on May 20, 2010, 11:49:11 AM
Quote from: Steve_ Shaffer on May 20, 2010, 11:37:05 AM

Discovery Land, another high end developer, seems to be hanging in there.


From my understanding, Discovery Land developments are the absolute crème de la crème, servicing the wealthiest top 1-2% of Americans/others.  Looks like if done right, this model works; but it is a VERY small niche I would imagine.


What I don't understand is how does develeopers like Discovery (and not sure if there are others like them out there) think the over the top services they provide are helping golf and real estate developments? Sure there will be people who enjoy it, but doesn't this over the top excess hurt them in the end?

I would say the top 1-2% is waaay high, more liek the top 1000 people in the world.
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George Freeman

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #7 on: May 20, 2010, 02:44:20 PM »
Quote from: Jim Franklin on May 20, 2010, 02:18:21 PM
Is Gozzer Ranch a discovery property? I thought it was and they do a wonderful job.

Yes, it is.
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Mayhugh is my hero!!

"I love creating great golf courses.  I love shaping earth...it's a canvas." - Donald J. Trump

Michael Huber

Re: WSJ's article -- the collapse at Hokuli'a
« Reply #8 on: May 20, 2010, 04:57:15 PM »
Thingsi take away from this article:

1.)  Bank of Scotland really got bent over the barrel on this deal

2.)  Vog is a pretty funny word

3.)  The WSJ is pretty consistent at finding train wrecks to write about in the property report.

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JLahrman

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #9 on: May 20, 2010, 05:29:34 PM »
Quote from: Michael Huber on May 20, 2010, 04:57:15 PM
Things take away from this article:

3.)  The WSJ is pretty consistent at finding train wrecks to write about in the property report.

Probably not a lot of great success stories to write about these days, at least from a financial transaction standpoint.

I was just on the Big Island a few weeks ago, not surprisingly our hosts were talking about the lack of visitors given the recession.  It's obviously just not a place you want to go to for a weekend.  And with land being expensive because it is at such a premium, there is no room for error when making large investments...
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Greg Tallman

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #10 on: May 20, 2010, 06:06:04 PM »
Quote from: john_foley on May 20, 2010, 02:26:47 PM
Quote from: George Freeman on May 20, 2010, 11:49:11 AM
Quote from: Steve_ Shaffer on May 20, 2010, 11:37:05 AM

Discovery Land, another high end developer, seems to be hanging in there.


From my understanding, Discovery Land developments are the absolute crème de la crème, servicing the wealthiest top 1-2% of Americans/others.  Looks like if done right, this model works; but it is a VERY small niche I would imagine.


What I don't understand is how does develeopers like Discovery (and not sure if there are others like them out there) think the over the top services they provide are helping golf and real estate developments? Sure there will be people who enjoy it, but doesn't this over the top excess hurt them in the end?

I would say the top 1-2% is waaay high, more liek the top 1000 people in the world.

WAAAAAAAAAAY more than 1000 people John.

Their obver the top does not hurt them in the end. Don't think it has hurt them to date. Of course they are pretty lucky the walked away from the Chileno Bay project here in Cabo at the right time.

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cary lichtenstein

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #11 on: May 20, 2010, 09:16:23 PM »
Hokuli'a's starter properities start at around $5 or 6 million. I'd say the market for them is pretty darn thin, like 14,000 foot altitude.
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Andy Hughes

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #12 on: May 20, 2010, 09:34:04 PM »
Quote
The Cliffs is having problems

Steve, can you elaborate?
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Steve_ Shaffer

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #13 on: May 20, 2010, 09:46:57 PM »
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"Some of us worship in churches, some in synagogues, some on golf courses ... "  Adlai Stevenson
Hyman Roth to Michael Corleone: "We're bigger than US Steel."
Ben Hogan “The most important shot in golf is the next one”

Erik Mosley

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #14 on: May 20, 2010, 10:32:14 PM »
Quote from: Steve_ Shaffer on May 20, 2010, 09:46:57 PM
Re: The Cliffs

http://www.golfdigest.com/golf-courses/blogs/golf-real-estate/2010/01/our-timing-could-not-have-been.html

http://www.golfdigest.com/golf-courses/blogs/golf-real-estate/2010/02/cliffs-asking-members-for-help.html

http://www.golfdigest.com/golf-courses/blogs/golf-real-estate/2009/04/the-tiger-effect.html

Hi all, I'm new to the boards here - been reading for awhile, glad to be on board!  Not sure if there are many other Clevelander's here, so hopefully I can add a little bit from the North Coast.

Anyway, I just visited the Cliffs at Keowee Springs a couple of weeks ago and they had just reached an official agreement with their members to lend $160 million - well above what the one Golf Digest article said they were asking for. The staff that we talked to seemed very happy about it and there are definitely construction crews still working on the community buildings.  The courses/clubhouses/restaurants at the 3 Keowee neighborhoods were beautiful, but completely empty - makes me wonder if even $160 million is enough!
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Matt_Ward

Re: WSJ's article -- the collapse at Hokuli'a
« Reply #15 on: May 21, 2010, 09:42:15 AM »
As I said previously -- the shame of it is that the development name blocks out what is really a solid layout at Hokuli'a.

The Nicklaus team often gets more raves for other layouts they have done on the islands but Hokuli'a's penchant for controversy has all but eliminated the focus on the course itself.

One can only wonder if the course will ever get its fair share of attention.
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Mike Hendren

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Re: WSJ's article -- the collapse at Hokuli'a
« Reply #16 on: May 21, 2010, 10:39:38 AM »
Quote from: Michael Huber on May 20, 2010, 04:57:15 PM
Thingsi take away from this article:

1.)  Bank of Scotland really got bent over the barrel on this deal


I think it's more accurate to say they assumed the position.

Bogey
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