[BHoover]

I was not questioning the current business models of Trump, etc.  I was throwing out the question of whether there is a scenario where affordable golf is a plausible investment.  Could a business person see him/herself buying up some affordable courses and get a reasonable return on the investment with a greater return as  the courses become busier and operate more efficiently?

I'm sure it's possible, but until we see someone actually do it, it remains theoretical.

[DMoriarty]

Sven, thanks for your post 93.  It is spot on.  You have more patience than I do.

[Mike_Young]

Jerry,

I'm still not sure what Keiser and Trump have to do with it...the question is really " Re: Is affordable golf a realistic option?"

IMHO all affordable golf has one thing in common.  It's not owners or architects or style.  It's location both demographically and geographically. 

[Jerry Kluger]

Donald Trump likes making money and massaging his ego. Perhaps he will find it sufficient monetarily while greatly boosting his ego when he is able to say that not only was I able to develop the greatest courses in the world but I was also able to build the greatest courses that anyone can afford to play.

[Sven Nilsen]

I was not questioning the current business models of Trump, etc.  I was throwing out the question of whether there is a scenario where affordable golf is a plausible investment.  Could a business person see him/herself buying up some affordable courses and get a reasonable return on the investment with a greater return as  the courses become busier and operate more efficiently?

I'm sure it's possible, but until we see someone actually do it, it remains theoretical.

Jerry:

Trump's model is (a) to buy an already well-known, yet distressed, propety, (b) throw some money at it and possibly use the designer du jour to get some press, and (c) profit.

The ideas behind Keiser's model goes a bit deeper.  He's try to provide accessible facilities that are based on the ideals of the game that he holds dear.  Namely links golf, or golf that is closer to its roots than the game played in most parts of the country.  

I don't think the Donald really gives a crap about what kind of course he buys or builds, unless it helps in creating a few taglines he can throw out to the press.  I say this purely based on his public persona, his bravado and the incongruous (perhaps schizophrenic?) list of courses he has amassed so far under his brand.

For those reasons, I'm sure if there was enough publicity and enough money to be made, Donald would get in the distressed course game.  I could see Keiser stepping in to save something he considered worthy (let's use a course like Askernish as an example), but I doubt he would try to make a buck off of saving golf courses unless there was something deeper attached to it.

Just my two cents, and I hope it gets closer to answering your question.

David,

My pleasure.  

Sven

[BCowan]

Jerry, I don't know what your definition of affordable golf is.

http://www.bandoncrossings.com/course-rates

Bandon Crossing is $35 for twilight and $55 during the summer for locals.  Privately owned and seems pretty good?  Do you want ocean side golf for $40?  It would be nice to bring up Bandon Crossing every once in a while.

[Sean_A]

Jerry,

I'm still not sure what Keiser and Trump have to do with it...the question is really " Re: Is affordable golf a realistic option?"

IMHO all affordable golf has one thing in common.  It's not owners or architects or style.  It's location both demographically and geographically. 

Bzzzzzzz, thanks for playing.  IMHO all affordable golf has one thing in common, its affordable    Everything else is dependent on god knows how many factors.  Why is it that folks think there isn't great variety demographically and geographically when speaking of affordable golf?  I know a lot of guys with money who don't want to waste on $150 green fees and some guys with not so much money that they are happy to do so.  Geographically - affordable gof is all over the map.

Ciao   

Ciao

[PCCraig]

I think Mike Keiser has been great for golf and golf course architecture, but let's not forget he is a businessman. He is also an investor in The Glen Club outside Chicago, a Kemper owned CCFAD designed by Fazio, which is hardly walking only and costs $200+ to play.

[Sven Nilsen]

I think Mike Keiser has been great for golf and golf course architecture, but let's not forget he is a businessman. He is also an investor in The Glen Club outside Chicago, a Kemper owned CCFAD designed by Fazio, which is hardly walking only and costs $200+ to play.

Pat:

I really don't know what relevance his investment in TGC has in this conversation.  Unless you know exactly why he invested, it really doesn't say anything other than he supported the development of a new golf course in Chicago. 

The CCFAD/Fazio/Walking/Cost info speaks more to what the Chicago market demanded at the time, and not Keiser's ideals.

Sven

[Jerry Kluger]

Okay, so Trump or Keiser is not about to get involved with affordable golf but that still leaves the question of whether affordable golf can make economic sense.  My view is that the semi-private model works best as it gives the guy who wants to play a lot of golf the chance to do so but the other guy who just can't play that much or doesn't want to play that much, can still enjoy a golf course that is a good value.  Here in NC there are some options like that and they are out there primarily because they were part of a real estate deal which never took off.  The courses are really good and quite reasonable and somehow they have been able to keep going. 

[Patrick_Mucci]

We all love and certainly appreciate what Donald Trump, Mike Keiser, Mosaic, etc., have done for the game but is there a realistic possibility of someone taking up the cause of affordable golf? 

No.

It has recently been pointed out on GCA how expensive it is to play courses like Streamsong, Doral, Pinehurst, Bandon, etc. so they are not going to attract the casual golfer and most serious golfers cannot afford to make them a regular stop.

So can quality affordable golf work today or are the costs just too high? 

Can't work unless it's subsidized.

You can certainly find a local community that is willing to subsidize a golf course because of its benefits including recreational as well as green space. 

But can you make the case to someone like Keiser or Trump that here is a plan for you to take these courses and keep them affordable but still make money?

Tell us how Trump can buy Doral for $ 150,000,000, invest another $ 100,000,000, then offer affordable golf and make money ?

It's an inherent financial contradiction 

I attended Richard Mandell's symposium and Ron Whitten demonstrated that no matter how little you pay for a course you can still lose money as a course operator. 

So again, is there a way to propose to a wealthy businessman that affordable golf can be a profitable venture?

NO.

The only way to achieve your desired goal would be for the golf course to be run as a "non-profit" venture, with the wealthy individual funding the capital and operating losses through charitable donations

[Jerry Kluger]

Patrick: I was not suggesting that Doral or Bandon, etc., could possibly be affordable golf. I was putting out there the idea that someone of means buy some courses that are struggling financially and can be bought very cheaply and then operate them in such a way that they will make a profit for the owner and possibly an overall gain in the future.  There are plenty of folks on GCA who believe that courses can be well maintained at a much lower cost if the operator knows how to do so that can be a start.  Not every course will succeed but if there is a group of 5 courses and 3 or 4 are profitable then maybe it makes sense. 

[Patrick_Mucci]

Patrick: I was not suggesting that Doral or Bandon, etc., could possibly be affordable golf.

I was putting out there the idea that someone of means buy some courses that are struggling financially and can be bought very cheaply and then operate them in such a way that they will make a profit for the owner and possibly an overall gain in the future. 


The problem is your premise, that someone could walk in an buy 200 acres "cheaply"

I don't know much about the value of land in your neck of the woods, but, there's not a lot of "cheap" 200 acre parcels in my neck of the woods.
And, when you consider the uses of raw land, commercially or residentially, it tends to knock out the "cheap" element.

When someone buys an operating business, they're not buying it to lose money.
And, they have to recapture their investment before they get a return on their investment.
So, how can a "purchaser" make money by offering rock bottom green fees ?
As I said, your question/premise is inherently conflicted, ergo flawed

There are plenty of folks on GCA who believe that courses can be well maintained at a much lower cost if the operator knows how to do so that can be a start. 


Really ?

And how many of those GCA folks are actually in that business ?
How many of them have a clue on what it takes to run a successful operation ?
As Jeff Warne stated, GCA.com nerds often don't have a clue.

Not every course will succeed but if there is a group of 5 courses and 3 or 4 are profitable then maybe it makes sense. 

Jerry, how does it make sense ?
The purchase price alone will prevent you from turning a profit in your lifetime with low green fees.

[Lou_Duran]

Patrick: I was not suggesting that Doral or Bandon, etc., could possibly be affordable golf. I was putting out there the idea that someone of means buy some courses that are struggling financially and can be bought very cheaply and then operate them in such a way that they will make a profit for the owner and possibly an overall gain in the future.  There are plenty of folks on GCA who believe that courses can be well maintained at a much lower cost if the operator knows how to do so that can be a start.  Not every course will succeed but if there is a group of 5 courses and 3 or 4 are profitable then maybe it makes sense. 

Jerry,

Most investors look at each deal individually.  Unless there are some fantastic economies of scale or competitive advantages, there is no financial reason to be involved in an asset that has unfavorable future prospects.

On the private side, Club Corp has been successful in acquiring and operating mid-market properties and providing value options in that category.  There are other operators (Casper, Palmer, American) who also play in the "affordable" private and public golf markets (though the ownership is not always clear- sometimes they manage, other times they also have an ownership interest with financial partners).  I am sure these groups are driven by the profit motive.

With the exception of municipal courses, "affordable" is dictated by what the market will bear and not the philanthropic motives of the owners, their financial structure, or the costs of their inputs (e.g. water).  Sound capitalization and efficient management go a long ways toward surviving in a competitive environment, but when volume is declining and you're barely covering variable costs (not to say anything about debt service), the long term gets on you very quickly.

I've seen golf courses offered for 20% of replacement cost, what brokers call "real asset buys", which require a real optimist with lots of time and deep pockets.  Barring a sudden change in economic policy AND consumer trends, I don't see too many of these "investors" getting in line.

[Jerry Kluger]

Pat: You may not find the model economically possible in Northern New Jersey but in other areas of the country it can work.  There are plenty of businesses that have been turned around and become profitable when someone knows how to operate them more efficiently and market them properly.  What makes it impossible for golf?  Who says the purchase price has to be so high that you can not charge a reasonable greens fee - you say it but how many public golf courses have you operated?  There are certainly efficient and inefficient ways to operate a business and the same with the maintenance of a golf course.  My old course had better playing conditions than another course nearby that spent nearly double on course maintenance. There is no absolute - even if Pat Mucci says there is.

[DMoriarty]

Okay, so Trump or Keiser is not about to get involved with affordable golf . . . ."

Again, Keiser is involved with affordable golf.  He has been trying been trying to get an affordable golf course (Bandon Muni) built for years.  

Some here want to try dismiss this as some sort of convoluted get-richer-quick scheme driven by self-interest, but Keiser is nonetheless involved in affordable golf.

[Brent Hutto]

So I've lost the thread. Are we talking about creating new courses to provide affordable golf? Or are we talking about being the oft-mentioned "third owner" of an existing property after its original debt has been wiped away in a couple bankruptcies?

[jeffwarne]

So I've lost the thread. Are we talking about creating new courses to provide affordable golf? Or are we talking about being the oft-mentioned "third owner" of an existing property after its original debt has been wiped away in a couple bankruptcies?

Brent,
Affordable golf will work well for Trump because it won't cost him a nickel due to the fact that there are so many people that won't play Doral even if it's free

[Paul Gray]

Jerry,

I'm still not sure what Keiser and Trump have to do with it...the question is really " Re: Is affordable golf a realistic option?"

IMHO all affordable golf has one thing in common.  It's not owners or architects or style.  It's location both demographically and geographically. 

Bzzzzzzz, thanks for playing.  IMHO all affordable golf has one thing in common, its affordable    Everything else is dependent on god knows how many factors.  Why is it that folks think there isn't great variety demographically and geographically when speaking of affordable golf?  I know a lot of guys with money who don't want to waste on $150 green fees and some guys with not so much money that they are happy to do so.  Geographically - affordable gof is all over the map.

Ciao   

Ciao

Clearly, Sean, I'm missing as much as you are.

It comes as a shock to me to discover that all of those £10, £20 and £30 green fees I've paid at decent courses were just figments of my imagination.

Affordable golf is indeed everywhere. If Trump, Keiser or anyone else wants to get in on it, there are enough badly managed clubs out there which could be open to offers.

[Jerry Kluger]

Brent: I don't think that affordable golf is in the picture if it means building new courses.  What is important is if there is a way to keep the courses we have and stop the ever growing list of NLE.

[BCowan]

http://theworldlink.com/bandon/news/keiser-s-newest-golf-project-will-provide-overwhelming-benefit/article_11772096-78a4-11e3-bddb-001a4bcf887a.html

''The second challenge, if the final facility is 27 holes, will be creating three equally attractive nines, because nine holes will be set aside each day for local golfers, while the other 18 will be for the “retail” golfers. Which nine holes is set aside will rotate each day.''Funny haven't seen other periodicals mention this.

Interesting and I hope Bandon Crossing who relies on Local play doesn't go out of business, but I bet that wouldn't make any news feeds....

''If the main entrance to the proposed Bandon Muni turned out to be across from Bandon Crossings — and it might — “that would be lovely,” Smith said. “I love the idea that they would be getting some of these people off the resort and around in the community.”

On the other hand, Bandon Crossings has repositioned itself as a locals course, and Bandon Muni, with its “St. Andrews model,” would certainly siphon some Coos and Curry County players with lower greens fees.''

http://registerguard.com/rg/sports/outdoors/29676481-80/bandon-state-area-dunes-keiser.html.csp

[Lou_Duran]

From the first article:

"Hanse faces a big challenge, because in the economic model for Bandon Links, the courses need to stand up to those at the resort. Local golfers will pay a small amount, with out-of-state guests bearing the burden of funding the facility, paying the same rates charged at the resort.

“ 'It has to be good enough to attract the Bandon Dunes retail golfers to drive down there and pay a lot,” Keiser said. “It has to be as good or it won’t pay for itself.' ”

The "locals" pay a rather nominal fee to play on one of the nines each day.  The vast majority pay "retail"- $280 in peak season.  I guess it all depends on what the word "affordable" means and to whom.

The Crossings owner is being very nice.  Another owner might be concerned about having a "name" course across the street on a much superior location as a result of a land swap with the government with a price structure subsidized by "retail golfers" from out of town greatly undercutting his market.  She must either be very confident of her course and/or sees an opportunity to capture some of the resort's market.

[PCCraig]

Do the locals really need another 9 holes in Bandon? (This is an honest question, I have no idea how many golfers live in town).

There is already Old Bandon Links & Bandon Crossings. Are those courses full?

If Mr. Keiser was concerned about locals playing more affordable golf, why doesn't he just let them play for a "nominal" fee on one of his existing courses (could rotate every day) after the last scheduled tee time, already?

I think it's nice that they are thinking about the "locals" with the new "muni." However it strikes me as a bargaining chip to win favor with the state in an effort to swap out public land. Either way in the end Bandon/Kemper are working to increase the number of 18-hole resort courses by 25%, no?

[PCCraig]

I think Mike Keiser has been great for golf and golf course architecture, but let's not forget he is a businessman. He is also an investor in The Glen Club outside Chicago, a Kemper owned CCFAD designed by Fazio, which is hardly walking only and costs $200+ to play.

Pat:

I really don't know what relevance his investment in TGC has in this conversation.  Unless you know exactly why he invested, it really doesn't say anything other than he supported the development of a new golf course in Chicago. 

The CCFAD/Fazio/Walking/Cost info speaks more to what the Chicago market demanded at the time, and not Keiser's ideals.

Sven

Sven,

I believe the reason he invested had something to do with getting a piece of the land to be used for housing sales along #6, #7, and #8.

And I think the fact that he was (as of a few years ago at least) an investor is relevant in this discussion as we're talking about affordable golf as a realistic option. Sure, it's a different world now than it was in 2001, but with land and construction costs it doesn't matter who your owners/investors are...you can't justify a building a golf course in major metropolitan area without high green fees, a "name" designer, carts, real estate sales, and high green fees.

[Sven Nilsen]

Jerry:

Isn't this just the same battle cry that's been shouted out for years on this site?  Stop building courses that are going to cost a mint to maintain, find land suitable for the purpose and encourage a maintenance meld that won't drain the local reservoir.

If there's a model to suggest to someone looking to make money in the affordable golf market, I'd suggest they start by buying Wine Valley, Wild Horse, Rustic Canyon and Wolf Point.  But then again, those courses probably aren't for sale as I'm sure their owners are pretty happy with their little corners of the golf business.

The idea of minimalism goes a bit deeper than just aesthetics.  Maybe, just maybe, the "groupthink" crowd around here is on to something.

Sven

PS - Any time I can make a phone call to play 36 in one day at two universally regarded top 100 courses for less than $150, I'd call that "affordable" golf.  Mike Keiser doesn't need to build a muni to convince me that he's committed to providing value.

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