Interesting question for those of you in the business – what are the options here?
The homeowners association faces decisions with the opportunity to get Miller's Beacon Hill course for $1 plus minor back taxes & fees.
Having an abandoned course in a development cannot help home values. The objective is to have a course with a good reputation that at least breaks even and again serves as the centerpiece of a housing development.
It would seem that a fairly new course, in the absence of any debt load, should be able to at least break even. The alternative is open space that must be managed and maintained at some level by the homeowners.
Positives:
They get a Miller designed 27 hole course that cost an estimated $20M to build. No debt.
The course was completed and operated for 2 or 3 years
Since closing in 2006, the course has been kept mowed, but had nothing else done
A recent engineering study reported that cart paths and bridges were in generally good condition, requiring only minor repairs
Loudoun county VA is close to Washington DC, growing rapidly, and affluent. There not much quality golf to be had within 20 mile radius.
Negatives:
No clubhouse was ever constructed. When operating, it used a temporary building, since removed
The county is rumored to be ready to ask for new permitting before the course could reopen
No info on condition of the irrigation system.
Zoning and land use restrictions prevent any residential or commercial use of the land, other than agriculture. The course was included in the housing development approval as open space. Essentially zero value if not a golf course.
The club, when operating, was private, with $50K initiation fees, which were lost to members in the bankruptcy. This might present an image problem with a new private club
Now the discussion questions!
Having been mowed, but not otherwise maintained (water, fertilizer, etc.), what investment would you envision that would be needed to bring the course back to playing conditions? Expect the fairways to need re-grassing? What would the greens likely need? Big $$?
How would you proceed?
Buy a market/operation/feasibility study? - How would that work? I assume that there are golf consultants that do this. Get one consultant's advice, or more than one?
Any potential to sell the course to an operator? (The loan holder tried, with no luck – asking price unknown)
Explore course operating/management companies looking for bids to operate? - Would a management company be expected take on the P&L? Would they pay a for lease? Or, would they expect some funding guarantees? Share Profits? Who pays who?
How to decide if being private, semi-private, or public course is the best approach?
Keep all 27 holes? Keep 18 or 9?
I expect the answer is “it depends upon the results of a study”, but I'm interested in a discussion of approach and expectations. To my knowledge, the association has not gotten far along yet, working to date mainly on opinions & debate within the community.
BTW. I have no role in any of this. I'm not in or associated with the Homeowners Association, nor do I have any contacts there. I'm not in any way affected by how this ends up, nor do I stand to gain by whatever happens.
I'm just a nearby resident and a golfer who has an odd fascination with golf business models & who hates to see a golf course die.