[Neal_Meagher]

Well, not now of course, but that is about what Cypress Point cost in 1927 dollars.

What I'm curious about is whether anyone has undertaken to study what some of the top and best-loved courses cost when built, but what their construction cost would be in today's dollars.  If anyone knows of such a study, please do share it.

By the way, that same $150,000 in 1927 would have grown to only $1,470,112.15 in 2002 dollars.  Try sliding one in under the nose of the California Coastal Commission for that amount today.

[Tim_Weiman]

Neil,

The only problem with simply running inflation adjusted numbers is that golf course construction today has whole categories of expenses that really didn't exist when Cypress Point was built.

The permitting process alone can take years and cost millions today.

[Jim_Kennedy]

Neal,
If you take the 150k figure and compare it using GDP, which  tells you how much money would be the same percent of all output when comparing one year to another, Cypress comes in at $16,300,000.  

[Neal_Meagher]

Tim and Jim,

Both very valid points, which underscores the difficulty of making such an analysis.  For instance, pvc products form the belly of almost every course now, but didn't exist then.  

As for the environmental costs, to simplify things, let's take that out of the equation and look only at the cost to build the golf course.  That will make it a little easier to compare apples to apples.

While I agree that just running inflation adjusted numbers don't tell the whole story, the GDP measure seems quite high.  Any other ideas?

[Bob_Huntley]

The Shore Course at MPCC was built by Bob Baldock for $150,000.00 in 1960. The land was bought from Sam Morse for $1.00. Not a top contender, but the greens were as keen as Kilspindie's and with a great deal more slope.

It's replacement will cost sixty three times more!

[A.G._Crockett]

Jim
The GDP % method doesn't really work because the economy has expanded so tremendously since then.  JD Rockefeller, Sr., for instance was at one point worth 5% of the total GDP of the country, a figure that will never again be matched.  If you take his net worth at the time, however, and adjust it to 2004 and compare it to Gates, JDR is well below.

Tim's point about categories of expense that didn't exist in 1927 shows one of the basic problems with price indexes.  They only compare dollar for dollar expenditures, without regard to other considerations like quality or composition changes.  For example, cars show up in the index as costing more, without regard to air bags, ABS, CD changers, etc.  Golf courses would be much the same, especially if you factor in real estate costs as part of the total cost.

[Jim_Kennedy]

A.G.,
I agree, it's never going to be apples and apples. What can be done with golf courses, or automobiles for that matter, would be to have an itemized list of "parts" that could be discounted using CPI. If permitting/enviro averages 20% of a modern course budget, or say 2 mil, in the coastal region of Ca. you can discount it using CPI and add it in to the 1927 cost of building CP. Same procedure with the pvc Neal mentioned.

If you look at the cost of the "new" Shore course that Bob Huntley spoke about, the multiplier they found was 63 times, or $9,450,000. I guess that course was nearly overhauled for that much loot but there must have been some savings in certain ares that might have totaled a few more million if they were building from scratch, I don't know. I would say you could split the difference and call CP a $13,000,000 build in today's market.  

[James Edwards]

Generally, today, too much earth is being moved IMO.  I believe the art of golf course architecture should lie in the ability to select natural greensites, fairways and tees with as little movement of the natural topography as possible.

[Mike Hendren]

What would it have cost/psf to build a 1500 sf bungalow nearby in 1927 and what would it bring today on a psf basis?
I'm guessing the construction cost increases would pale in comparison to the dirt's appreciation.

Mike

[BCrosby]

MacK was given a $100,000 construction budget for ANGC in 1931.

The course came in under budget.

Bob

[A.G._Crockett]

Bob,
True, and a great example of inflation. In 1931 you could have had the best baseball player in the game for approx. $100,000.  Change both accordingly, and we arrive in 2004.

[Bob_Huntley]

BCrosby,

Did AM get paid in full?

[Bill_McBride]

Bob,  legend has it that Dr MacKenzie was never paid in full and in fact was paid only part of his fee.  Somewhere I saw a copy of a letter in which he beseeched Cliff Roberts to part with some of the money as he was in somewhat desperate straits.  Sad given the income of the club today.  I wonder if the club is interested in settling with MacKenzie's heirs, one of whom is a country and western singer whose name escapes me.

[Tom_Doak]

It all depends how outlandish you want to get.  The shore erosion control work and bunker work they've done at Cypress in the past five years has cost $3 million or more.  But the construction of what they constructed back in 1927 should be fairly comparable to what we built Pacific Dunes for ... a lot of irrigation, but not much shaping or earthmoving.

[Jeff_Mingay]

Neal,

In the process of writing the history of Essex G&CC, I visited the Bank of Canada's website, which features an "inflation calculator". Essex was built in 1929, over a featureless tract of land, for about $150,000, which if I recall correctly, equals less than two million Canadian dollars today.  

Now, that's what I call economy in golf course construction! Very few people, if any, could built a top 20 golf course (Essex) in Canada, over flat, heavily treed ground for $2m Canadian.

[James Edwards]

Tom,

Thats good to hear that you used limited earth moving at PD.  I haven't visited the course yet, so I'm talking blind, but did the site lend this to you from the start (natural hole locations)or was it a client decision (budgets) to limit the earth moving?

James

[Bill Gayne]

Neal,

There is a good reason that economics is called "the dismal science."

If you go to EH.NET (Economic History.net) they provide five ways to compare the worth of a US dollar over time.

The $150,000 compares as follows 1927 to 2002:

CPI $1,550,000
GDP Deflator $1,310,000
Unskilled wages $5,260,000
GDP per capita $6,960,000
GDP $16,300,000

The numbers above really don't tell you much. What needs to be done would be to get the detailed construction budget for a project in 1927 and one for 2002 and break down the components and apply the appropiate factors. Also adjust for new technologies such as sprinkler systems. I suspect in 1927 the amount of unskilled labor was greater than today. You would also have to determine the amount of unskilled labor used in 1927 and amount used today and identify what is now substituted and apply productivity measures. If you actually did compare detail construction budgets from two different eras and converted them it may be an interesting exercise but I will leave that to you.

Bill

[Forrest Richardson]

Neal,

You know, we could do a course today for that amount...If we had a decent site with plento o' sand, 1/4 inches of light rain every five days, free fuel, our own dozer, an uncle who runs a seed company and an unconditional support for all who detest cart paths and carts.

Let's do it.

[Brad Klein]

Yale cost $450,000 in 1925-26. I guess that would place it in the $45 m. range today?

That's obviously an extreme, but I bet you Lido cost well over $1m after World War One. George Wright Municipal in Boston also cost $1 m. in 1936. Don't think all of those Classic era courses were cheap, though as a rule they were certainly on average much less expensive than today. But it felt expensive in those days nonetheless. Spending $100,000 for the CC of Waterbury (Conn.) in 1929 was a massive investment.

[Keith Durrant]

Brad,

George Wright looks a pretty rocky site - did they have to do a lot of rock-blasting? Is that why it cost $1m?

Is this a Donald Ross course which deserves to be brought up to date and invested in?

[Jim_Kennedy]

This about Eastward Ho! from a green section article titled "Efficiency in Golf Course Construction" by C. Ashley Hardy
  "On this eighteen-hole course of 6,350 yards, ten fairways were plowed and seeded, and trees removed from 17 1/2 acres thereof. The total labor cost, including horse and farm machinery hire, has been less than $40,000 to date, with greens. tees, and fairways finished. A not inconsiderable item of this total is the 10,000 two-horse loads of green compost moved twice, and the heavy grading necessary on some greens as well as fairways for which the Cape Cod “sand plow” proved a highly efficient instrument."

Another good one from 1922:
 "Cost of Building and Seeding a Nine-Hole Course in the Fall
of 1921 and the Spring of 1922" by William W. LONG,   (for the) Coatesville, Pa. Country CluB

"The total cost for fairways, greens, and tees for the nine-hole course, measuring 3,139 yards, follows" :
Labor-    $2275.95
Teams-    799.45
Seed-      1,168.00
Fertilizer-  340.46
Sand-      46.00
Total-.. $4,629.86

"Labor for the most part cost us 20 cents an hour. We paid a few men 25 cents an hour (ca.$9.00 today), and the labor foreman received 30 cents an hour. Labor has since been increased to 30 cents and 35 cents an hour. With the acquisition of reasonably good farm land I believe any club could closely approximate the figures I have given providing there is some member who understands work of this kind who will without cost devote
his time exclusively to the project during the course of construction. Most every newly formed club should be able to find someone who is interested enough to do this."

[Doug Siebert]

I'd lean more towards using a GDP basis to compare to the prices, because they seem realistic -- if they were built the same way.  But nowadays you'd have a lot more heavy equipment and a lot fewer people than you did to build a course in 1927.


OK, fair warning, the rest of this is OT....but you guys ask for it when you bring up Economics, my dad was an Econ prof for nearly 40 years so I've had this stuff drummed into me since long before he ever thought to take me out to a golf course

Not really sure whether this is a good thing or a bad thing, but the CPI is quite useless for measuring anything, so you shouldn't look at it.  It consistently understates the real rate of inflation, and has done so since the early 80s when some subtle changes were made (not blaming Reagan, the Democrats in Congress were just as guilty)  But since SS and tax brackets were indexed to the CPI, understating the real rate of inflation is a good way to reduce SS payments and increase tax revenue, allowing more money for government spending without making it as obvious to the public.

Basically the government removed home pricing from the index and replaced it with imputed rent, cars are carried on the CPI at a steadily decreasing percentage of actual cost (currently about 35%!) because stuff that is standard now on an average car like disc brakes, ABS, airbags, etc. are "improvements" that get deducted at inflated pricing (anyone think they could make a car equivalent to an average 1969 vehicle for 1/3 of a current car's cost?)

Then there's chain weighting, which basically means that if you have oranges in the CPI, and orange prices go up because Eddie Murphy screws up the market, making orange consumption drop because people can't afford it, then the portion of the CPI devoted to oranges drops.  When consumption of something else goes up, more of it goes in the CPI.  On one hand it makes sense, but it also guarantees the CPI won't rise for any item where there's a substitution effect unless real wages are rising by at least the same amount.

[BCrosby]

Bob Huntley -

MacK was never paid a portion of his design fee.

In 1932/3 ANGC filed for a receivership (a state law bankruptcy equivalent) and many of its unsecured creditors were not paid. Including the unpaid portion of MacK's design fee. To be more precise, MacK had died before the insolvency proceeding, thus it was his estate that never received the balance owed.  

In the realm of rank speculation:

I think Jones felt badly about what happened to Mack. Unlike other commercial suppliers to ANGC, MacK was in no position to deal with the financial loss. I think that is one of the reasons why Jones brought Egan (one of MacK's partners) 3,000 miles from Oregon to Georgia to build a public course in Atlanta (N. Fulton) in 33/34. As a sort of payback. Again, rank, unsubstantiated speculation.

Bob

[TEPaul]

Broken out into construction cost in 1912 Merion East cost app. $45,000. However, in its present form it was not completed until app. 1932-1934.

[TEPaul]

I'm somewhat surprised by the cost of ANGC and CPC which seem somewhat low for the late 1920s, early 1930s. We just came across the cost to repair or redo the so-called six "water holes" of the Creek Club of massive drainage problems in the early 1930s . The tab on those came to over $100,000!

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