Do the cool people really know affordable golf?

[Mike_Young]

Hell no. 
I read the $150 affordable thread.  I see the various conferences for affordable golf and muni golf etc and then I see the list of speakers etc.  There's about 12,000 golf courses out there watching and thinking to themselves....

Most golf is not sustainable at a $50-$60 rate and yet if done properly such a fee can produce a good profit.  The average country club dude really has no idea what he is paying for a round and what he is paying to have the conditions he thinks he wants.  The average real estate play course is only sustainable as long as there are more lots that need to be sold and then often the membership is left with a clubhouse built to sell homes which cannot be supported.  The average muni is a double edged sword in that it pays no taxes and competes with the local privately owned public track while not having to pay for it's improvements.  And I could go on...

The real affordable golf is local and cannot afford to be heard much outside of it's 20 mile radius.  Those are the people that need to talk affordable golf not management company dudes trying to land their next muni management contract. 

[Carl Rogers]

Mr. Young
Second paragraph, first sentence...
Please elaborate further, seems contradictory.

But who has the $$$$?  Can or will the local banks take the risk?

Agreed, more management layers achieve nothing.

[Craig Sweet]

I recently joined a club in the next town over.  They charge $17 per seat when you take a cart.  That seems rather steep.  So, maybe you make money on the accessories.

[Tom_Doak]

Mike:


I’m curious if you think it’s possible to build a new golf course that’s profitable at a $60 green fee.


I don’t disagree with you that a national magazine is unlikely to identify good examples, though they have stumbled across a few.  The whole reason their number was 150 is because that’s the level they seek out - a certain level of grooming (not conditions) that the affordable course can’t include in its business model.

[Brian Marion]

Mike,


honestly it's all about the expectation of value. And sadly, where you live or are visiting.


Examples: Portsmouth Elks in OH. $40 w/cart. Ross design that COULD be excellent but the bunkers and some features have been forgotten or just left to waste due to budget I'm sure. However, the skeleton of the course is there and can be enjoyed if you can look past the "ghosts".


Reynolds Park: Winston-Salem, NC. Old Town's poor sibling built on the wrong side of the tracks. Still, a good routing and an example of "what could be."


Tanglewood Park Championship, W-S - $59 w/Cart. RTJ Snr. While maybe not the greatest PGA Championship location ever, it did host a major once.


Coronado GC: San Diego: $63 on Monday


Sadly, Tom is correct. Having been around the various magazines, they are looking for or are forced to look for, a certain level. This appeases a lot of movers and shakers in the industry and keeps a lot of people happy.


Truth is, don't look to a magazine to tell you what's good OR affordable. Just like restaurants, the fun is in the journey most of the time.

[Mike_Young]

Mr. Young
Second paragraph, first sentence...
Please elaborate further, seems contradictory.

But who has the $$$$?  Can or will the local banks take the risk?

SECOND PARAGRAPH, FIRST SENTENCE..I'm saying most of the dudes you see preaching affordable golf can't make $50 work but the family run places can.


"[size=78%]But who has the $$$$?  Can or will the local banks take the risk?"  you got to buy right and spend right...[/size]

[Mike_Young]

I recently joined a club in the next town over.  They charge $17 per seat when you take a cart.  That seems rather steep.  So, maybe you make money on the accessories.

If that sounds steep..well hmmm...

[Mike_Young]

Mike:


I’m curious if you think it’s possible to build a new golf course that’s profitable at a $60 green fee.

TD,
I think about that a lot.  The stars would have to align.  Right land on sand with no greens construction, minimal sodding, cheap water and 50% budget for irrigation....get it in for around 2 million or so and 25,000 rounds...then perhaps...
BUT...find one you can buy for $500,000 and rework it...Yes...

[Mike_Young]

Sadly, Tom is correct. Having been around the various magazines, they are looking for or are forced to look for, a certain level. This appeases a lot of movers and shakers in the industry and keeps a lot of people happy.

the "movers and shakers" thrive from the 12000 course we never hear from...

[Jim Sherma]

The key is whether the mortgage is paid off. Not dissimilar to the grocery business. If the land and building is paid for you do all right.  That’s why you see very few new entrants in an established market.

[Charles Lund]

Affordable golf near where I live outside of Seattle includes Gold Mountain, in Bremerton, and Port Ludlow.  Gold Mountain is a 36 hole facility, with an original 18 hole course, Cascade, and a John Harbottle designed ciurse, Olympic, which opened in the late 90s.  Port Ludlow was built in the mid to late 70s, designed by Robert Muir Graves, and opened as one of the top five in the state.The original Port Ludlow course is rated 5 on the Doak scale.  The Trail nine closed in the recession around 2009.  Neither of the Gold Mountain courses is included in the Confidential Guide, but the Olympic course has hosted the 2006 U.S. Public Links, 2011 U.S. Boys Junior Amateur, NCAA Regional Championships, U.S, Open Qualifiers, and University of Washington NCAA events.  Port Ludlow has been public and associated with a residential development. Gold Mountain is a municipal facility.


I can play Port Ludlow walking in the afternoon in summer for about $45.  I bought a Senior Punch card at Gold Mountain for Monday to Friday play for 10 rounds for $250.  After 8:00 a.m., there is a surcharge of $8 to $10 or $12 for the Olympic course.  Both are walkable, with Olympic being a slightly more difficult walk.  On Monday of this week, I played each course, going out on Olympic before 8:00 and Cascade later in the day for two punches or $50 for the two rounds.


The Gold Mountain courses have good natural drainage for the most part and are playable in winter.  Port Ludlow  plays well from May to late October.  Gold Mountain is included in best value lists.  Quite a few things worked with the Olympic course.  Some locals prefer Cascade and some play both.  I mostly play Olympic.


Charles Lund

[Garland Bayley]

And, golf.com listed Gold Mountain in their list without specifying a course. So they really have a list of 101 courses.

[Charles Lund]

Weekday public rate on Cascade is $36.  Olympic is $56.


Surprised it isn't higher up on the value list.


I have no idea what it cost to build Olympic .  I was told John Harbottle proposed a project for $6 or $7 million to build a course where Pierce County spent over $22 million to build Chambers Bay, about 25 miles away.


Charles Lund

[Jeff Schley]

Weekday public rate on Cascade is $36.  Olympic is $56.


Surprised it isn't higher up on the value list.


I have no idea what it cost to build Olympic .  I was told John Harbottle proposed a project for $6 or $7 million to build a course where Pierce County spent over $22 million to build Chambers Bay, about 25 miles away.


Charles Lund

I think Chambers Bay is a poster of lack of discipline with taxpayer funds.

https://www.thenewstribune.com/news/special-reports/article25858759.html
For all the anticipation that 2015 US Open would solve all the financial problems and right the ship take a look at the financials and 2019 budget. Red ink prevails. If I had time and was a resident in the area I'd love to do a deep dive on the financials, however the bottom line is telling.


Now they have leased land to an investment group to build a hotel that is still on hold due to the pandemic.

[Garland Bayley]

Jeff,

What you may be overlooking is that Chambers Bay is a large public park that gets heavy use, especially in the summer. Public parks don't charge admission.

Are you going to next investigate the NYC Central Park financials?

[jeffwarne]

I recently joined a club in the next town over.  They charge $17 per seat when you take a cart.  That seems rather steep.  So, maybe you make money on the accessories.

If that sounds steep..well hmmm...

First thought I had...

[Tom_Doak]

Jeff Schley:


Thank you for posting the financials on Chambers Bay.  That will scare off a lot of people thinking of building a golf course someday -- and save them a lot of money!


The most amazing part of it is that they lost money on all aspects of operations in 2018, and then budgeted to spend slightly more on each aspect in 2019 even though their bottom line said they would lose $1.8 million that way.


On the other hand, they've got $1.3 million in "overhead" distributed among the various operations, and they don't say anything about what that is.  Presumably a lot of it is paying off the bonds that were used to finance the course; for most places this would also include insurance and property taxes, but I'm not sure if they have to pay property taxes to themselves or not.  So it's possible some of the "overhead" is an accounting exercise that's not really costing them $.

[Jeff Schley]

Jeff,

What you may be overlooking is that Chambers Bay is a large public park that gets heavy use, especially in the summer. Public parks don't charge admission.

Are you going to next investigate the NYC Central Park financials?

Who doesn't love parks? Necessary and especially during covid appreciated. Although many feel that public golf courses should be converted back to open space for all to use, not just golfers, but let's park that (no pun intended) for this discussion. We all value our public courses, but it doesn't mean that it is a good investment for local governments to try and build Taj Mahal scope golf projects.

 It was a park before pouring $22 million to build the course. The land cost $33 million (930 acres in 1992) and maybe 150 or so acres is the golf course so let's say about $6 million (1992 dollars) is allocated on top of the $22 million. Garland find us a public park that cost $22 million to build without the land costs  . THEN use loans to do it with.  Then, despite hosting the biggest nations biggest recreational tournament (2015 US Open) has lost money it appears almost every year with more public loans to keep it afloat.
Now a couple considerations for and against and others can point out some to.

• Against - time value of money of using $22 million elsewhere from 2005/6 to build the course. Someone can do the calculation of using different interest rates. I'd love to know what discount rate they used for proving the financial projections using an NPV model and what rationale they used.
• Against - we don't have the full picture, but they have borrowed money several times before the US Open, it appears the sewer cash flow and at least one other loan from somewhere.
• Against - Who is running the GC operations now?  It is owned by the county, but are they running it themselves? Didn't anyone consider making changes to the operations. They are losing money on operations, before any loan payments which is a terrible sign. Anyone know if they have considered a long term lease with Troon or others? Seems like that should be considered as they have proven whoever is making decisions they aren't viable financially.
• For - Terrible time to open right before the 08 financial crisis and probably the cause for at least their first loan. Not much did well and will give them a pass.
• For - I don't know the economic impact of business around the course, but certainly it helps the local economy. However, it is a public subsidy almost as the course operations are losing even right now.
• For - It seems like a resort or hotel was in the plans early in the project and just never materialized, to date they did award a long term lease in 2019 to a investment group to do so. However, it doesn't seem to have even broken ground yet due to covid. Once this gets online (and all with investor money) it should help drive play to the course.
• For - I'm all for giving public recreation outlets and public golf is one. IF and I don't know, but would assume they do, if they offer a healthy discount to county residents like a Torrey Pines deal for locals vs. out of towners.

As a golfer, what do I care if the locals subsidize the building of a great public course? I'll go there and play it. However, if it was my money to do so and local officials have a fiduciary responsibility to act in the best interests of the public, it is clear this endeavor has never been justified to use public money to do so. Does anyone know of a more expensive government built golf course?

[Ira Fishman]

Are University courses subsidized by their institutions? They often have annual memberships that make the per round cost in the affordable range if one plays regularly. And even their daily fees are well under the GM definition.


Ira

[PCCraig]

I was at Sand Valley this week and I saw minivan after minivan with plates from all over the midwest of guys loading and unloading their clubs. If you're staying on site you're essentially in for a $1,000/day even before the optional caddie.


So I suppose affordability is all relative?? $150 for a day at Lawsonia sure would seem affordable after a couple of days at Sand Valley or Kohler?


I tend to be more impressed with places like Winter Park where a team can take a renovate an existing course for $1mln, and while running lean (no carts, small clubhouse, no restaurant) can offer good quality golf for ~$20.

[Sean_A]

Are University courses subsidized by their institutions? They often have annual memberships that make the per round cost in the affordable range if one plays regularly. And even their daily fees are well under the GM definition.


Ira

UofM relied on donations and athletic department funds for its recent 15 million new house.


Ciao

[Dave Doxey]

Course economics interest me.  I can see how it’s difficult to break even on a new course with big debt.  On the other hand, I play with 2 groups of seniors who play weekday golf that never exceeds $70 riding, and often as low as $35 walking.  Most of the courses are municipal or daily fee courses giving discounts to senior outings.  Add to that some private clubs that give good prices to senior outings. Being retirees able to avoid weekend crowds and rates helps.


The munis and daily fee courses have been around for quite a while and were built in the time before construction costs skyrocketed.  Conditions are generally very good, so it seems that they are covering operating costs.  I doubt that debt service is very high.


On the other hand, there is a 27 hole private course near me that was built 20 years ago for a reported $20 million  and went bankrupt after 3 years open, taking with it a lot of $50K initiation fees.  After getting it from the lien-holder for an amazing amount of $1, the HOA has been trying unsuccessfully for 15 years to find a golf operation firm to run it for no annual cost.  Amazing that given a $20 million course for free, it does not appear break even is possible.  Zoning prevents that land being used for other than recreation.


With land and construction costs in a demographic area that would support it, I don’t see how the finances would work to open a course today.  Even for courses that have no debt one has to consider that value of the land for purposes other than golf.

[Jin Kim]

While I have a season pass at Commonground ($2600/yr that I have amortized nicely this year) for the majority of my rounds, Denver has a great municipal golf scene.  Willis Case is 5 minutes from me and I enjoy playing it on occasion for $31 a round.  According to this article, the golf courses are mostly self funding and even manages to have positive cash flow that is reinvested in the golf program.  https://www.westword.com/news/denver-golf-pandemic-social-distancing-development-11760363


Most of the courses were constructed decades ago so they can make the economics work.

[Tom_Doak]

Are University courses subsidized by their institutions? They often have annual memberships that make the per round cost in the affordable range if one plays regularly. And even their daily fees are well under the GM definition.

In many / most cases, the cost of constructing the course is paid by donors, so the university only has to take in more in green fees than the course costs to operate.  That's not foolproof, but it's a lot better place to start!

[Tom_Doak]

I tend to be more impressed with places like Winter Park where a team can take a renovate an existing course for $1mln, and while running lean (no carts, small clubhouse, no restaurant) can offer good quality golf for ~$20.

I've heard nothing but great things about Winter Park, but, if you're going to make comparisons there you should really double the numbers, since it is only a nine hole course.