What are the best most expensive golf courses?

[Jim Nugent]

I recall a number for Yale around $600,000.  Even if you say prices have gone up 20x since then, that comes $12 million.  Modest by some of today's courses. 

[Garland Bayley]

Chambers Bay

[Lester George]

Forest Hills Golf Resort, Hiroshima, Japan,  90 million dollar municipal course.

Lester

[Alex Miller]

Forest Hills Golf Resort, Hiroshima, Japan,  90 million dollar municipal course.

Lester

Crossings at Carlsbad was on the same order. I want to say 70M. 

[Pete Lavallee]

I believe the Crossings cost $76M, not counting the $5M cost for land aquisition.

[Tom Kelly]

Are these figures being banded about just for the golf course? Or are including maintenance facilities, clubhouse etc?

Either way, they are making me feel slightly sick.

[Garland Bayley]

Forest Hills Golf Resort, Hiroshima, Japan,  90 million dollar municipal course.

Lester

Crossings at Carlsbad was on the same order. I want to say 70M. 

Crossings is "the best"?

[Anthony Butler]

Anthony Butler,

Have you ever met or had any personal dealings with Donald Trump ?

The only personal thing I know about him is that he was forced to keep his opinions to himself at Winged Foot.. which after some trial and error he mostly did.. Given his need to impose his viewpoints, I imagine he's much happier ordering everyone about at Trump Bedminster, New Jersey, LA, West Palm Beach etc...  I know myself well enough, however, to understand people like Donald Trump are only amusing from a distance... preferably filtered through the lens of Bill Maher or Jon Stewart.

Why do you suppose Mr Hawtree agreed to do the second course for him in Scotland?

He probably paid his bill for the first one, which puts him ahead of Clifford Roberts I guess...

[Lester George]

In the case of Forest Hills, that is the cost of golf and clubhouse.  There was no land cost because it belonged to the government.

The biggest factor was moving 5.3 million cubic yards of material.  About 4 million of that was rock. 

Lester

[Tom_Doak]

I recall a number for Yale around $600,000.  Even if you say prices have gone up 20x since then, that comes $12 million.  Modest by some of today's courses. 

Yeah, but that's for a course with no cart paths and a single row irrigation system and no sand-capping and no waterfalls and no landscaping -- those are the line items that drive up costs on a Tom Fazio design.  Twelve million for clearing and earthmoving and greens construction and grassing is a chunk of change, even by today's standards.

[Paul Jones]

Didn't Fallen Oak cost something like 40 million? In Mississippi that's a pretty impressive number.

Yes, that is chump change in Louisiana and Texas 

[Niall C]

Two that could qualify , Trump National Scotland.  (Have not played ).     

Cascata.    Las Vegas.     Have played

Archie

Not sure if you're just being provocative or what, but out of curiosity, how much do you think Balmedie International (Trump) cost to build ?

Niall

[Wade Whitehead]

I recall a formula that dictates $10 per million spent as a benchmark for a profitable greens and cart fee.  A $3 million course should cost about $30 to play.

Does that mean Forest Hills has to cost $900 per round to operate in the black?!?

I'm not in operations, so my percentage may be off to begin with.

WW

[Lester George]

Wade,

That 10 dollar per million construction was a golf analysis benchmark that was floated around by developers, builders, architects and just about everybody in the nineties as a way to demonstrate (or justify one way or another) how much to spend on a golf course.  I don't know too many people who ever totally relied on that theory but it did hang around for a while. 

That model breaks down fast when you consider, for example, Sand Hills.  My understanding was it cost right at a million dollars to finish.  Therefore they could be profitable charging $10 per round.  The other side would be something like Independence at a cost of about 12 million.  They can't get anywhere close to $120 per round (more like half).

You can't use that formula at all in Japan.  First, they look at the investment as a 100 year return. We look at it as 20 to 30 years.  They charge (last I heard) about $120 per round during the week and $150 on weekends, which is cheap in Japan.  They are municipal and they are located at the International Airport Village which hosts about 10 million passengers per year.  I would think they could count on 1 million per year profit. if so, their 100 year formula works okay.

Lester

[Alan Carter]

Wasn't Banff one of the most expensive courses ever at the time?

Banff was acclaimed to be the first course that cost a million dollars to build!

[Mark Bourgeois]

I recall a number for Yale around $600,000.  Even if you say prices have gone up 20x since then, that comes $12 million.  Modest by some of today's courses. 

Yeah, but that's for a course with no cart paths and a single row irrigation system and no sand-capping and no waterfalls and no landscaping -- those are the line items that drive up costs on a Tom Fazio design.  Twelve million for clearing and earthmoving and greens construction and grassing is a chunk of change, even by today's standards.

I think the amount was more like $460,000 but more to the point, using a "basket of goods" inflation calculator is the absolute wrong way to equate project construction costs in 1924 or so to present day.

I suppose one way to do it is as Tom implies: recalculate costs as though the course were being built today. Some of the inputs: ~20,000 sticks of dynamite, 16,000 cubic yards of muck dredged from swamps and used for ground cover, sand used from a seam found on property for bunkers and presumably some type / degree of sand-capping, and seven miles of pipe laid for drainage and irrigation.

Or: equate original cost to size of the economy at the time, ie cost share of national GDP. This represents the opportunity cost to the economy. (If this project weren't built the resources could have been deployed elsewhere; this metric provides an indication of the value of that project to society.)

By that metric, in current dollars Yale cost $79.9-million to construct.

[Jim Nugent]

Mark, U.S. population has nearly tripled since the mid-1920s.  So if you're going to use the GDP index, I think it should be per capita GDP.  That brings Yale's figure down to the high $20s. 

Also, taxes today are vastly greater than they were in 1925.  e.g. federal income taxes alone take about 20x more out of GDP than they did in 1925.  In terms of disposable income, that brings the figure down further. I'm guessing to around $20 million.     

But I'm not sure why share of GDP is the accurate way of comparing the cost to build Yale.  Society didn't build the course.  Yale did.  The basket of goods approach measures - with broad strokes - the opportunity cost to the university.  Why is that less valid? 

[John Kirk]

I don't have a number, but I've heard The Madison Club in La Quinta was expensive.  They built a 30 foot deep barranca to route the course through.  Moved several million cubic yards.  I'll ask somebody who probably knows, but I'm guessing $40-50M.

I've seen but have not played Madison Club.  It's pretty cool, big and snazzy.

[Mark Bourgeois]

Jim,

My way isn't the only way, this is an inexact science at best. The standard basket-of-goods inflator consists of items that have little to nothing to do with building a golf course. As I infer from your post, labor costs is another way to measure -- more broadly, as I mentioned in my earlier post, you could inflate the factor costs that went into the project by attempting to estimate the current costs of the activities performed. That's imperfect of course because the eras differ in terms of technology, regulations, etc.

Back to the GDP-based inflator: I'm not sure why you're offering the per-capita haircut or income taxes. If you take GDP as a fixed measure of an economy's output -- ie, that's all we as an economy could produce in that year -- then taking a project's investment / expense amount and dividing it by that year's GDP provides a measure of the outlay's significance relative to the overall economy. It tells us how big a chunk this project took out of the national output.

If that doesn't make sense, here's an analogous situation: who is the richest man in American history? Most methods just take a person's wealth at the time they lived and inflate it. But that doesn't measure the person's "wealth power;" it doesn't do a very good job telling us how much of the world in which they lived they could have bought.

For that, one measure is wealth divided by the total value of the nation. (BTW if you measure things that way, sometimes the calculations throw out a very interesting person as the wealthiest in American history.)

Like I said, all this is imperfect. Yale cost enough that it caused all manner of internal reports and concerns; perhaps that's the best indicator of all.

[Jim Nugent]

Mark, suppose population triples but prices and per capita GDP stay the same.  The people are no more wealthy.  In fact they and the economy probably are a lot worse off.  But the GDP inflator model you used would make it appear that a) the economy now is three times larger, so b) prices were three times higher before.  That is why I think per capita GDP works better.     

I take out taxes because they reduce what companies and people have to spend and invest.  I admit my bias/belief that government uses money less efficiently.  But there's another side to this, too.  Governments virtually always spend more than they take in.  So they must borrow the balance.  That ends up putting huge strains on the economy. 

Back in 1925 government borrowing in the U.S. was minimal.  Now the U.S. official public debt is nearly $17 trillion and counting.  Throw in state and local debt, and I think you have several trillion more.  Count off-balance sheet items -- like Social Security and Medicare -- and you may have several hundred trillion more.  That's the amount Boston U economic prof Laurence Kotlikoff cites, anyway. 

Point is, the higher debt-laden GDP is in large part an illusion.  It ignores, or covers up, all the debt that must eventually get paid back, or see services drastically cut.  As I don't believe we can possibly pay off hundreds of trillions of dollars in services, I expect huge cuts.  That also overstates the value of today's economy, and means the GDP inflator again overstates 1920's prices.       

I agree with you 100%, none of this is an exact science -- and Yale was expensive, definitely for its time, and maybe today as well.   

[Alex Lagowitz]

Yale and Banff and Lido were the three old-time courses that were always talked about as having been enormously expensive to build.

In the past decade or two, expensive has been the rule and not the exception.  Every course built out West that was sand-capped was very expensive.

Sebonack was a hugely expensive project ($100 million plus), though 40% of that was the land acquisition, and a bunch more went into the clubhouse and cottages.  The golf course also cost way more than it should have, due to paying two designers and making expensive environmental promises and building things the most expensive way possible -- and, on top of all that, because it was in the Hamptons and you pay double for everything out there.  But, even with all that, there are modern golf courses that cost twice as much to build as Sebonack.

P.S.  You are just talking U.S. here.  Pretty much every course built in Korea in the last twenty years, and in Japan in the 80's and 90's, cost $40 million or more to build.  I just don't know that any of those count as "best".

Tom,

In addition to the trio of courses you list, I've also heard that CC of Fairfield was very expensive to build.  I think it was a similar project to Lido, in that they dredged the sea for infill.

[Mark Bourgeois]

Jim,

We're broadly in agreement so I'll just add my thoughts on your thoughts then let it go before we crush each other under the weight of deathly boring economic measurement approaches.    Anyway, I'm no expert on this stuff.

I see your point about per capita GDP but to me that measures the "contribution" of each individual to the project rather than the actual size of the project. Seems to me a "counting" denominator like GDP works better than a "rate" denominator.

Regarding GDP, it's just one measure of national economic output. It's not perfect, especially when used to compare output  across very differently structured economies, as I guess1926 and 2013 are. There are other measures as you note.

Hmm, just had a thought about a qualitative way to compare: use of the adjective "expensive." What counts today as an "expensive" course is sort of the same as what was claimed as such back then. Supporting this view, it sounds like building mountain courses in Japan involves a lot of the same "factors" as  building Yale.

[Rich Goodale]

Keep this up, Buckaroo.  You are on a roll!

[Mark Bourgeois]

Rich, I'd like to stop by your house when convenient to discuss your medical, property, and liability insurance needs. Won't take long but I'll need a projector and a high-speed printer. Also a machine that links to Google so I can pretend I know what I'm talking about.