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What's an average fee for a golf course architect?

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Andrew Cunningham:
I was wondering what a licensed (I think they are licensed??) golf course architect would earn on an average project.  Does anyone know?  Stupid question given this site's membership, but I wonder what the range is between say a rookie and Tom Fazio.  Better yet, would the likes of Coore & Crenshaw and Tom Doak rake in the mega dollars of Pete Dye and aforementioned Fazio?  

I don't expect to receive exact figures (if any architects actually reply), but it would be interesting to understand what percentage of a total project’s cost – just the course that is – can be attributed to the architect.  On the professional golfer/architect side who would be the most expensive: Greg Norman or Jack Nicklaus?  And frankly, who’s better?  Do mega dollar architects necessarily guarantee you a great design?  Probably not, but I know when I spend $300 a night for a hotel room it is most likely to be superior to the $50 a night variety.

I assume when architects bid on a job they must submit at least a basic routing plan – please expound if qualified.  If this is correct, can or should the developer judge the submission based on the price vs. quality of the plan or is it just a gut feeling?  Or some combination of the two?  That said, how price competitive are golf course architects?  What margin do they expect for each project?  Can they really afford to get into bidding wars?

And lastly, are design associates and other staff strictly subcontractors who can leave at their will and who are hired/fired as the job(s) dictate?  Just curious.

Tom_Doak:
Andrew:

Depends on what you mean by "average".

The highest fee is $2 million per course.  The lowest is one dollar.  

I've never seen an official figure, but I would guess the median ASGCA member charges somewhere around $200K or $250K per course ... if the client pays in full.

As for me, all I will say is that I can charge a lot more now than I did five years ago, but I think I'm still well short of Tom Fazio's design fee ... my name doesn't sell real estate or memberships the way his does.

Now these are "design fees".  Don't forget to deduct all the expenses of running an office and paying associates and so forth.  A one-man operation is rare in this business, and most of them would not be able to charge nearly as much as the established firms.

Jeff_Brauer:
Andrew,

Fees of course, are all over the ballpark. The most recent Golf Inc. Magazine had its annual survey of the gca profession.  I was surprised to see how high each of the various architects were in quoting their fees, given the recent recession and my experience that competitors are really slashing fees.

Of course, the old saying "First Liar Doesn't Have a Chance" may not have been invented to describe golf architects self reporting of fees or numbers of projects, but it does apply!

Decades ago, the ASGCA (and most other professional socieities) had a minimum fee chart.  This is long since abandoned on the basis of price fixing.  However, in most design professions, a profit can be made at anywhere from 6-10% of design fee.  Given that new courses cost about $4Million, that should put most gca fees at $240K to 400K.  Big names charge more (or if Pete Dye, $1 for certain public courses)  Certain beginners may cut fees to a range of 3-4%.  Also, add ons and bigger budgets usually go for smaller amounts, percentage wise.

The percent is just a guide.  Most of us negotiate a lump sum, since a percentage may encourage us to "Gold Plate" the cart paths, knowing our fee will go up, while it doesn't take any longer to lay out any cart path, gold plated or not.  In other cases, the percent arrangement as a base works pretty well - if I am designing $500K of landscaping I don't normally do, then the extra $15-50 K comes in handy in covering my costs.

Even the big boys are probably in this range - at least for architectural services.  Placing a full time field rep is usually above that design percentage, and can easily also translate into 5-7% of construction costs.  And, the big boys usually require that they have a man on site full time.  So, of a million dollar design fee, about $400K may go to traditional design services, another $400 K to full time site reps, and the last $200K might be attributed to marketing pizazz, but its all rolled into one fee.

As Tom notes, a fee is not all profit.  A while back, I posted about how $32K per year apprentice architects bill out for about $75 an hour, about 5 times their nominal $16 per hour paycheck.  I won't type it again, but rent, utilities, marketing costs, errors and omissions, workmans comp, general liability, other employee benefits, etc, etc, etc. all contribute to the overhead of a design business.  As head of my own company, I have traditionally taken home about 15-20% of the total revenue in most years.  

Competing for jobs is a variable process as well.  Many owners expect that you will provide a routing, and some will actually pay a few architects to do one, knowing they will get a better effort if they at least cover expenses.  Others select only on qualification. Most cities don't negotiate on fee, and are happy if their selected architect falls in the ranges above.

That said, I will bet most fees are set by assuming what the competition might do.  As one gca told me, you get what you can get!  I usually run through the fee proposal based on percentages as above, a fee that would reflect the kind of money I should ideally be making, a few estimate of hours times hourly rate with overhead and profit that is high profit, low  profit and medium profit, and what the competition would do. I usually select one of the middle options, as I have found I can't often get the "dream fee."  Especially in the last few years, everyone seemingly scaled back fees to get jobs.

I suspect most architects have full time employees, who they try hard to keep employed through thick and thin - but not very thin!  As in any business, its tough to train someone and then find them gone, so we don't fire unless we really, really, have to.  (But, I have had too!)

In the good times of the late 90's, I always ran my office a "half man" long, to be sure I could provide timely service.  Now, I am running a half man short, and have used several sources on occaision to fill in as contract labor.  The layoffs in the industry have certainly produced some independent drafting contractors and I am sure others look at it the same way I do.  However, the IRS takes a dim view of contract laborers in general, and if they work anywhere near full time, they can cause tax problems.  Plus, I worry that they won't be there when I need them.

I do contract out some of my office stuff to my accountant, figuring why not leave that to professionals, and having had a chance to get better on may computer programs, and a bad run of secretaries, the office manager was the first posittion to go. Having said all that, I am in the office on a Saturday night processing my own invoices for the month.  I don't want to work fathers day, and the Rangers are playing just down the street - I need to wait until the crowd goes home to miss traffic.

Hope that answers your questions.

Mark_F:
Tom Doak,

I find it interesting that you might be well short of Fazio's fee because your name doesn't sell memberships or real estate.

What about a project like Cape Kidnappers?  Presumably the owner chose you because he thought you were the best person (s) for the job, so why shouldn't you get what the going rate for the best is?

Especially since Fazio doesn't like to travel?

Andrew Cunningham:
Jeff and Tom,

Thanks for the detailed info!  Just curious but I hope to someday put a plan together for an awesome (in my layman's opinion) piece of property just down the road from me.  As you guys indicated it's unfortunate that GCA’s frankly net as little as they do at year's end, especially if you added up all the hours you put in over the course of a year.  Thanks again!

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