As touched on earlier the costs associated with construction and maintenance is an interesting topic to me. George Thomas gives some general dollar amounts in his book:
Clearing....$4k (5%) approx. $54k after inflation adjustment
Grading....$18k (22%) approx. $243k inflation adjustment
Water system....$24k (30%) approx. $324k inflation adjustment
Seed....$2k (2%) approx. $27k inflation adjustment
Sowing fairways....$4k (5%) approx. $54k after inflation adjustment
Labor...$20k (25%) approx. $270k inflation adjustment
Sand for traps....$4k (5%) approx. $54k inflation adjustment
Other infrastructure costs (roads, bridges)....$5k (6%) approx. $67k inflation adjustment
Total $81k approx. $1.1million after inflation adjustment.
There is really no reason for me to know this information but it is interesting to me…despite the unrealistic dreams, chances are I won’t build a course anytime in my life.
As far as operating budgets I do feel this topic is a bit more important to know about, especially when joining a private club, and hopefully the budget includes the loan payments from building/purchasing the land/course. Not sure if the affordable golf symposium goes into details about golf course budgets but there are tons of reports on the internet written by consultants that analyze the operations of golf courses. Here’s one about the LA municipal courses and then an aggregated study on all courses. Not surprising the budgets for private courses are significantly higher than public courses. (
http://www.laparks.org/golf/pdf/Final%20Golf%20Study%20Report_September%202011.pdf http://www.golfcourseindustry.com/gci0212-state-of-industry-report.aspx)
To discuss the topic further I’m 30 and joined a private club at 28 that I think falls into category 2 (semi-private club which is a 501c4 non profit model - example Cape Arundel). I don’t understand all the tax implications for clubs, and figure most people don’t understand the tax codes. When I was looking at clubs to join it was frustrating to try and find out what the costs were going to be. I’m sure there is a subset of people that says if you’re concerned about costs you shouldn’t be joining a club…well that’s not me and I don’t think that’s a realistic viewpoint for most perspective private club members. I didn’t like that I had to give my name and information to the club and then have the club contact me. I felt like it was the same process when buying a car. We do our research online and are forced to enter our information and have a representative contact us and give us a price. Why do they add this unnecessary layer? Just publish the information online. From my perspective the only logical reasons to keep the information under wraps is so they can charge different customers different prices without upsetting those that pay more and to allow the sales guys to sell. Even after two years I’m still getting occasional e-mails from clubs asking about my interest (just got one 2 weeks ago from a top 100 club). There are some that say they want their finances private. I get that but people who want to know can find out, they just have to do a little more leg work. Further I would much rather have my neighbor know what I paid than spread rumors that I paid 200k to join such and such club. I feel expectations on privacy are changing, you can figure out when someone has a bowel movement by following them on twitter or friending on facebook.
When we joined the club I was able to find an archive of the minutes from the board of directors and in the minutes they seemed to be discussing changes in the membership structure and the initiation fees. When I asked the membership coordinator about this she wouldn’t provide any details about the potential changes. About 3 months after we joined the initiation fee went down 66% for the category we joined.
To be honest joining the club clearly wasn’t the smartest economic decision we’ve made. We’re both in careers where we move every few years and joining a private club really doesn’t make a lot of sense in this situation. I think moving often due to multiple job changes is becoming more of the norm. All of my college friends have moved multiple times (this is a bit unique) but even when looking at my high school friends I can only think of one that has stayed with the same company since finishing undergrad, and even he has moved once in the last 9 years.
I also agree with everything JC said in his last post and I think courses that want to attract younger members are going to have to change if they want to survive.