The Morals of a GCA

[Ian Andrew]

When you are short and your livelihood is on the line, you have to make completely different choices and architects should be judged by the circumstances they find themselves in and we need to be careful.

Ian:

"But your definition of ethics is a bit more changeable than mine, judging from the line above."

Tom,


Mine are not flexible.
How I judge others has become flexible because I've watched friends/architects lose their business.
As the saying goes, walk a mile ...

[Peter Pallotta]

This is a very good thread, asking for and eliciting some difficult questions and nuanced answers. It reminded me of what humourist Fran Lebowitz said, something like: "For decades we've been reading  'The Emperor's New Clothes' to our children, but we've forgotten to tell them that the person who says 'The emperor isn't wearing any clothes!' will have to pay a price for their honesty'.

Peter
 

[JMEvensky]

This is a very good thread, asking for and eliciting some difficult questions and nuanced answers. It reminded me of what humourist Fran Lebowitz said, something like: "For decades we've been reading  'The Emperor's New Clothes' to our children, but we've forgotten to tell them that the person who says 'The emperor isn't wearing any clothes!' will have to pay a price for their honesty'.

Peter

I just wanted to give you props for the Fran Lebowitz quote--I'm a big FL fan.

[Kalen Braley]

This is a very good thread, asking for and eliciting some difficult questions and nuanced answers. It reminded me of what humourist Fran Lebowitz said, something like: "For decades we've been reading  'The Emperor's New Clothes' to our children, but we've forgotten to tell them that the person who says 'The emperor isn't wearing any clothes!' will have to pay a price for their honesty'.

Peter

Peter P, certainly in light of current events in this election cycle and world events, this couldn't be more true. 

[Jeff Taylor]

Thanks for the responses gentlemen. I will need to reread some of them before I write anymore.

"As a financial/business advisor it does not look good if half the businesses they were involved in go belly up"

Comparing your professional responsibilities with that of the GCA is the fundamental flaw with your question. Given all of the money decisions that must be made when building a golf course or club, you ask if the architect should be the voice of reason? There is no GCA equivalent to FINRA nor should there be.

Jeff,

I need to make clear I am not a financial advisor but having read what I wrote I can see how it reads that way so I have amended it to make it clearer. Sorry for the confusion.

One point I was making was more do you think it is a good advert for a GCA to be seen to have a high % of their projects go belly up? The other was that many developers do not really understand the golf industry and build courses that are never going to succeed. Is there not an onus on anyone seeing this to advise?

Jon

Greetings Jon. There are many reasons why I may want to associate my work with success. However, the reviews of my work while it existed would be more important than whether it lasted for your desired period of time. It just doesn't seem reasonable that the GCA should bear the responsibility for informing the investor about the so-called wisdom of their investment. I endorse economic Darwinism.

[Tom_Doak]

 
In an ideal world, a portion of everyone's design fee would be taken over the long term, so that the architect has a real vested interest in building a successful project.

Are there any arrangements like this? Maybe a 5 or 10 year payout combined with a club's Master Plan for the golf course would seem an ideal situation for the club members.

For the members, I'm sure it would be ideal if architects extended credit, like banks.  But in the real world, letting payment lag very far behind the work accomplished is asking for trouble.  "Collections" are the least fun part of business.

[John Kavanaugh]

I once put in paved cart paths in exchange for $1 per cart rental plus 3% interest on the balance due. The only people who bitched were the walkers because I put the paths near the greens. Paid off quicker than anyone thought.

[Tom_Doak]

I once put in paved cart paths in exchange for $1 per cart rental plus 3% interest on the balance due. The only people who bitched were the walkers because I put the paths near the greens. Paid off quicker than anyone thought.

Funny.  For 2-3 years I had in my contracts a provision that we'd discount our design fee by $50,000 if the course was operated as walking-only.  This was not just to help promote the trend, but a fair exchange for avoiding having to deal with the headaches of locating cart paths where they wouldn't detract from the course.


That was in 2006-08 and in that period, none of the clients I signed took me up on the offer.  Most of them were real estate projects that never got off the ground.

[Thomas Dai]

How about turning the matter around................what about the morals of the client? "The cheque's in the post" is a phrase that comes to mind.
Atb

[SL_Solow]

I bring a different perspective to this question because I have spent a good part of my career dealing with troubled or failed businesses from a variety of perspectives.  There are many businesses that have a relatively low percentage of success over the long term.  restaurants come immediately to mind.  Yet people continue to invest in restaurants, sometimes for many of the same non-economic reasons that other people build golf courses.  If the proposed owner asks the architect his/her opinion about the feasibility of the project, I believe the architect is duty bound to give an honest answer or to suggest that the customer undertake a feasibility study.  But if the developer has made up his/her mind, absent some special circumstance, the architect is being hired to provide a service, not to act as a business adviser.

As far as the delayed fee model, unless the architect has a piece of the upside, I see no reason why the fee should be delayed.  Contingencies should come with a reward as well as risk.  Those who make it a practice take the risk of collection may need to talk to someone like me in my professional capacity before too long.

.

[Jeff_Brauer]

 
In an ideal world, a portion of everyone's design fee would be taken over the long term, so that the architect has a real vested interest in building a successful project.

Are there any arrangements like this? Maybe a 5 or 10 year payout combined with a club's Master Plan for the golf course would seem an ideal situation for the club members.

How it happens is an Owner asks the gca if they want to be literally an investor. It happens, but I often joked to staff that the only projects I got offered a partnership were for the wrong reasons - they were cash strapped and under funded, and yes, I felt may be in trouble.  Not many smart investors offer to make an architect a partner when he could simply hire a good one for a lot less money long term, especially on projects that are likely to be home runs.

In many cases, the gca's answer would seem to be a good indicator as to how successful they think the project would be, but that is not always the case. 

Going back to Ian's thoughts on financially strapped archies, a gca could possibly love to be involved as an owner, but also in dire need of a big fee right then to....well, eat.  In other cases, the architect might like the project's chance for success, but not want to partner with near total strangers (which would never be a great idea) and is often problematic.  Lastly, if you put your fee in as sweat equity, it still has value and you still pay taxes, hard enough on money in your account, much harder on theoretical money in your account. 

And even a half million dollar fee gives you only 5% of the project as a limited partner or stockholder.   Having had such a small share of the deal once, it is never a good feeling.  You really don't have a say in the project as a minority partner.  You probably have more say as the hired architect, outside and independent consultant because you can stand your ground a little better on the legal aspects of a contract.

So, there are some negative aspects of being a partner in a golf project.  And all for what?  Because a few people on the internet somehow believe architects aren't as ethical as they should be?  No matter what the business relationship or contracts, it all goes back to people.  In general, golf people are honest and hard working, as are golf course architects.  Changing up the generally accepted fee for service guidelines because some people perceive a problem that by and large isn't there really isn't going to happen, nor should it.

[cary lichtenstein]

This is a very interesting thread and it relates to the real estate business I am currently in. I express my opinion up front and steer my clients away from properties that I believe will decline in future value. "Eyes wide open" is the expression I use. I'd rather lose a sale, than allow a client to make a mistake.


I will concede that I would have flunked the whole Bandon Dunes project because of its remoteness, but the land is fantastic, ditto the Nebraska successes, but those developers were very smart and knew quite well the tremendous risks.

[Kalen Braley]

Cary,

Thanks for those comments.  I wish you were around when we bought our home a few years ago.  Our agent tried to push anything and everything we looked at, she just wanted any sale. I didn't much care for her, but my wife liked her a lot.

Once again, in general I think this stuff applies to every industry, whether we want to admit it or not. 

[Tom_Doak]

How it happens is an Owner asks the gca if they want to be literally an investor. It happens, but I often joked to staff that the only projects I got offered a partnership were for the wrong reasons - they were cash strapped and under funded, and yes, I felt may be in trouble.  Not many smart investors offer to make an architect a partner when he could simply hire a good one for a lot less money long term, especially on projects that are likely to be home runs.

Bingo!  To your whole post really, but especially to this part.  I've learned two rules about considering investment in a project:


1.  Our clients are nearly always more successful at business than we are, so,


2.  They are only going to offer us equity in the project when they are skeptical of its success.


Mike Keiser would not have made such a deal with me at Bandon Dunes ... though he might have done so with David Kidd on the first course, if David had asked.  I did that at Barnbougle, and the project was quite successful ... but I still would have been wiped out in the lawsuit there among the investors, had I not been paid out at the time of the settlement.  A good cautionary tale there for anyone thinking about taking equity in a project.

[cary lichtenstein]

If you believe in the project, always take equity because it is an annuity or capital Gain

[Tom_Doak]

If you believe in the project, always take equity because it is an annuity or capital Gain

... if you also believe in the client, and your ability to collect from the client, then Yes.

[Mike_Young]

Sometimes the line between morals and ethics is confusing.   

When I first got in the business it was considered by self annointed professionals of the design industry that one could not build his own courses.  And yet some of the very guys frowning on the subject were having their own companies bid their work without the client knowing it.  One or two even had two construction companies so that both could bid his projects and he would win either way.   The explanation was that an architect could not represent the owner if he were also building the project.  It was total BS but it was used to sell against one unless you were someone like a PeteDye who had national recognition.  The other interesting issue of the business was the "closeness" of some of the architects and the large builders.  Often a national signature would name the builders who could bid his projects.  Truth be known a few of these national construction companies could actually build a certain archies project w/o him ever showing up.  Also when the construction companies knew you built your own and were not going to be contacting them, you certainly did not get good referrals.   But things have changed....The funny thing is that in the last few years so many of the same have begun to construct their own projects.  And my opinion is that most all of the good projects done in the last few years were built by architects with their own crews. 

[Jeff_Brauer]

The difference isn't confusing if you use the "know it in your gut" principal.......

Whether Pete Dye, Tom Doak, or Mike Young, there is nothing unethical about pursuing a design build approach (even if led by one of the major contractors, which is pretty typical, too) as long as the client understands what the arrangement is.  Design build has been around a lot longer than RTJ, it goes back to Ross, maybe Old Tom Morris, who knows. 

From the Hansen book, if all true (I wasn't there), it would seem RTJ providing multiple bidders, all of whom he secretly owned, was probably unethical and immoral, in that there was the undisclosed relationship.  I think RTJ also had an interest in an irrigation company, too, but I think that was well known. (the old Buckner Binar System.....whether it is unethical to recommend what turned out to be a dud of a system is a complicated question, made more so by any ownership, but probably wouldn't be considered unethical.  In those days of irrigation, it would be like expecting the Wright Bros. to have started with a  747 instead of a bi-plane)

I[/size]n more modern times, you might say Arnie has an interest in Toro, having done ads for them, but then, that was well known and a client probably understood he would recommend Toro irrigation.  It would be interesting to know if Rainbird ever slipped into a Palmer job, but I suspect it did at some point.[/size]


Yes, some gca's don't do design build, because as a sub to the contractor, you often run into areas where you can't represent the owner (typical case - being asked to approve a cheaper greens mix for the contractor to make his bid price, even if out of normal spec, downsizing drainage designs, etc.) 


And yes, presenting yourself as someone who takes a fee purely for design and as a third party contractor watchdog is a sales point, because using that design-bid-supervise method is appealing to some owners.  After all, without a competitive bid (often required by cities, etc.) they never really know if they got the best price possible going to one source.  On the other hand, anyone pursuing design build often touts cost savings of that method.  (and it does happen)


That probably never worried Pete's clients, so there is no moral breach, unless you consider making a profit on construction a crime (some ultra liberals seem to think that, but that's another story....I have a FB friend, architect to boot who regularly advocates offing anyone who makes more than X per year.)


As to architects who can't get a course built without a certain crew, you could obviously say a lot of things, but it's really not unethical for a gca to request a limited number of independent bidders familiar with their work. You can make the case that it helps the owner. 


And, basically, any architect who provide their own crews is basically in the same position as a design bid architect who requests contractors they are familiar with - they represent that they can't get the results they want without using their own crews, no?

[cary lichtenstein]

There are 3 rules: disclose, disclose, disclose


If one does not disclose his relationship with whomever, I believe it is unethical,

[Tom_Doak]

That probably never worried Pete's clients, so there is no moral breach, unless you consider making a profit on construction a crime (some ultra liberals seem to think that, but that's another story....I have a FB friend, architect to boot who regularly advocates offing anyone who makes more than X per year.)

Jeff:


To the best of my knowledge, Pete Dye never had a financial interest in a construction job.  [His sons each had a different approach.]  When I worked for Pete, at least, all of us were put onto the developer's payroll for the duration of construction, and it cost what it cost ... no bids, and no percentage to Pete.


When I started, I operated the same way, but over time I found that clients were more comfortable with a set fee from us for our time for shaping, so we went to that approach.  [And, it was easier to get my crew more money that way ... paying Eric Iverson or Brian Slawnik by the day at what sounds like an exorbitant price is still a bargain, because they work so damned fast.] 


My interns usually go onto the developer's payroll, just like I did for Pete.  I believe Bill Coore operates the same way.


The quandaries you describe in the design build [lowering specs] are not a factor for us, because we do design/shape.  Drainage is either done by bid, which I can oversee, or just at cost, by guys on the payroll.

[Mike_Young]

Jeff,
Not going to delve into it but I don't care how someone gets their course to opening day as long as the client feels they did him right.  My entire issue is with some casting stones as to how others do it.

As for Arnie, I was selling Toro when they hired him because of the fact that the Pennzoil commercials showed him putting that oil in his father's old Toro Parkmaster.  He was hired to promote consumer products such as the riding mower used for lawns.  As soon as Toro hired him the Echols at JN let Toro know they were gong Rainbird.  Palmer being the class act he was, allowed Toro to ease out of the contract at his suggestion becuase neither realized it would affect business.  Same thing happened a few years ago when the bermuda researchers at the UGA Foundation announced they would be forming a partnership with JN...didn't last too long. 

And sorry that I always call something design/build when I mean to just call it designing while building or could be just plain building.
Happy Easter

[Mike_Young]

Jeff,
I work the same way as TD mentions above.  We also will allow the owner to choose things such as irrigation brand if he wishes. 

[Jeff_Brauer]

Tom,

I was aware Pete didn't have financial interest in construction. Wording was awkward. 

That said, I have seen some questions come up contractually about only doing design shape as well.  Like Mike says, it seems accepted for "names", but when others try it questions come up.  I am aware of one lesser light that requires contractors to use his shapers and pay them, plus time off etc.  What ends up happening is that the contractor has responsibility for timely completion, but doesn't end up with control over the operations, because the architect can delay shaping, etc.  Of course, when an owner hires a celeb architect, it may be tacitly agreed that work product is more important than meeting a seeding date.  Not having done one of those contracts, I can't really speak to how that works.  Many projects are done that way, but any hybrid contract has its problems, like the old saying if two are in charge, none are in charge, etc.    And, there are problems in all contract types. 

Mike,

I agree if the Owner felt he was done right (which isn't always low price only) then everyone is probably ok.  That said, there is always the possibility that the owner never finds out he wasn't done right, too.......and ethics/character/morals are what you do when no one is looking.  But, in general, you are right.

The pro endorsement was a kettle of fish for ASGCA.  At one time, the bylaws said you had to make the majority of your money from gca, but even some non-celeb types were making money from golf course ownership or related ventures, but still practicing full time.  I don't recall the exact wording now but these by laws were never written by attorneys, just guys who wanted to form a group, and I doubt they thought of every ramification there might be over the next 50 years. 

In reality, Ross was your first honorary Prez and RTJ was there, too.  Robert Bruce Harris owned courses, and put guys out full time in construction supervision roles, etc.  So, from the very beginning of ASGCA, there was tacit agreement that construction was okay, as long as everything was above board.  Like I say, if some plans only guys touted that as the best way to design a golf course, that is obviously their right, just as you can sell the advantages of design build, or design in the field, or whatever we want to label it.

[Tom_Doak]

What ends up happening is that the contractor has responsibility for timely completion, but doesn't end up with control over the operations, because the architect can delay shaping, etc. 

Oh, yes, some contractors can be bullies about such things, particularly toward young architects!  Fortunately, whenever I've worked with contractors [which is not that often], I've explained this tendency to my client up front, and written out a schedule of construction, just to refer to later if the contractor is complaining about us holding him up.  It's harder for them to make the case when the schedule shows we are three weeks ahead!


After a while, the smarter contractors realized that not only were my guys getting what I wanted, faster than anyone else could, but that they didn't have to bring their "A" shapers to the job because I brought my own!  And we haven't had a problem with any contractor since then.  But, as I say, the beauty of minimalism is that many of the projects are so simple, we often avoid having a general contractor altogether.


P.S.  One of the reasons I like running the jobs myself is so I can put off a design decision for a while if I'm not 100% happy with it.  It seems like contractors are always insistent on finishing some particular green RIGHT NOW even though it would be easy to go finish a different one instead.  I just got tired of those sort of games possibly influencing the quality of the finished product.

[Jeff_Brauer]

Tom,

All the more power to you as long as you can pull it off.  Most of us end up having a bad schedule experience at some point, and depending on the nature of the Owner, they look to find blame.

Usually, schedule is paramount, because a week delay waiting for the architect (under any scenario) can cause a month delay in construction (it always rains the day we miss.....) and a month can cost the Owner a year of revenues, not accounted for in their pro forma (again, always pays to avoid underfunded clients)

Just out of curiosity, do you need separate insurance for the construction, and do you have any trouble getting E and O with your involvement with construction.  My guys get really nosy as to what exactly I do during construction, LOL.  It almost pays to tell them you hand the plans over and never even go on site, which probably leads to the stereotype here that architects hand over plans and never work in the field.....I guess the golfclubatlas.com crowd has access to our insurance policies for pleasure reading......