Anybody want to buy a great golf course?

[duketaylor]

Arnold Palmer designed course here near Richmond has gone belly-up. It's an awesome course, trust me on that. Ozzie, come up here and we'll play it for free or close to free. I'm trying to put together a group to buy it. This is my dream. Lots on the course go for $300K, houses for $800+, it's just an amazing property.

Any Duke alum or affiliated folk, please let me know. I'm no realtor. I've had a dream to own and run a golf course for a long time.

One of the best courses I've played in the Mid-Atlantic.

[dukeforester]

What course is that? I live in the Richmond area and have not seen anything in the Times Dispatch about this. Maybe not such a good sign for the PGA-championship course going in around the corner from me at New Kent Vineyards. Unless that's the course, but I don't think that course is completed nor are there any homes built on it yet.

[OZZIE4DUKE]

Arnold Palmer designed course here near Richmond has gone belly-up. It's an awesome course, trust me on that. Ozzie, come up here and we'll play it for free or close to free. I'm trying to put together a group to buy it. This is my dream. .
I'll see what I can do about that. When is it going to get a warm, dry day?

What course is that? I live in the Richmond area and have not seen anything in the Times Dispatch about this. Maybe not such a good sign for the PGA-championship course going in around the corner from me at New Kent Vineyards. Unless that's the course, but I don't think that course is completed nor are there any homes built on it yet.
Almost every course is in tough financial shape. My home club is hanging on by a thread and has been for two or three years. Membership is way down, so dues keep going up, so membership drops even more - it's a vicious cycle - too many courses and clubs, not enough players/members.

[Tarheel]

The name of the course that went in to bankruptcy protection is called The Federal Club, not the The Club at Viniterra in New Kent Vineyards.. The Club at Viniterra opened this past September, was designed by Rees Jones and has gotten off to a great start. The Club at Viniterra is a private club for members and their guests. It is the 2nd amenity to be completed in the past two years, to compliment the neighborhoods that are being developed as part of the master-planned community called New Kent Vineyards.

[YmoBeThere]

The fact that it went under is a pretty telling sign....

[rthomas]

I wouldn't mind buying one hole. A par 3 where I could pitch and putt all day.

[Jeffrey]

I'm trying to put together a group to buy it. This is my dream.

How much do you expect it to cost (originally and on-going)?

[Indoor66]

How much do you expect it to cost (originally and on-going)?

Also the number of lots that would go with it, price range of lots, % of total development sold and sales history.

[Schwarz]

I share your dream, but all I could afford would be a lot on the course.

[Jeffrey]

I share your dream, but all I could afford would be a lot on the course.

Stick around.... we might want to sell you one. :D

[duketaylor]

I made a few phone calls as a friend of mine, maybe 3 or 4, are on the board there or otherwise very involved. There are lost on the property for sale, very nice property where the homes go for anywhere from 600K to about 900K, then there's the golf course, available I'm told for 2.5M-3M (a very reasonable price, IMO), then there's a water treatment plant. I'm trying to get as much info as I can, but I want to be anonymous in the process, at least early on. I have a stockbroker/deal-maker friend who I've contacted to try to work on the numbers. He specializes in taking small banks to larger ones to be bought out, mergers, etc. He is brilliant and his dad is a professor at UVA's business school (Darden).
I'm off from work Tuesday and Wednesday this week (I work a crazy schedule) and will find out more.
For "Tarheel", who posted here, it is The Federal Club and I'm sorry someone may have mistaken it for another club. I have yet to visit your but would very much like to, so you may see me Tuesday or Wednesday, hope you don't mind. I live 30 minutes from the winery.

I'm trying to weigh everything as I watch the economy unfold. Golf is recessed, housing may be close to some kind of modest recovery but I still see very little discretionary funds available. I'm apprehensive with where the government is headed and try to take all of this into consideration.

Here is just a broad outline of what I'm thinking:

I'm most comfortable with simply owning and running a golf course. It costs 800k just for the maintenance of this course-it is all bent grass-see an expensive course to maintain. It is currently private. I would make it semi-private and allow daily fee play (gotta generate revenue). I would also have agreements with other private clubs, to allow their membership to play for a reduced rate (a very nominal rate) to help attract prospective members. I would carefully support company/organizational outtings to generate more revenue during off-peak times. I would invest time and energy in supporting junior golf as that is the future of the game.
I crunched a few numbers based on rounds played per year on my estimate that the course could easily generate about 2M in greens-fees alone. Another daily fee course near me (the one I belong to) does in excess of 50,000 rounds per year, I'm estimating 35,000. Currently lots of folks can't even get on this course and want to play it; I know all the current prices to play golf anywhere near here and understand the golf business very well.

I just wanted to take this next step in this thread and expound on where I am and where this could lead if anyone has real interest. Ozzie and others here can tell you I'm decently connected and I know golf. When I see and opportunity I'll do my due diligence and see if it makes sense. This may very well be a very strong opportunity and I'm continuing to look into it.

I'm really happy I've received some input here from you guys/gals. I'm so busy with work I hadn't visited the off-topic board in a few days. I'll remind myself I have something going on over here and keep my eyes on it.

Thanks for your interest. Chuck

[Schwarz]

Do you have to buy out all of the existing members to take the course from private to semi-private?

[Jarhead]

Do you have to buy out all of the existing members to take the course from private to semi-private?

My guess is that would only apply if it were an equity club. On ther other hand, the club may be encumbered by covenants attached to the properties in the residential part of the community, but duketaylor should already know that. I wish him luck on his endeavors. It looks as if he has a good plan in place.

Down here in Southern Pines, I live on a pretty nice course that is on the market right now, but fortunately for us members the current owner is doing a good job of keeping it up. He intends to sell it. His good fortune of owning a course happened when he financed the purchase of the club by a group from Florida a couple of years ago. They had purchased it from th prior owner who ran it so poorly that he was sued in state court by the members. That suit caused him to enter bankruptcy which resulted in forced sale to the Florida. They knew even less about running a golf course, so our present owner found it necessary to foreclose on the Florida group.

The bankruptcy that caused the forced sale also left a few encumbrances, the most important of which is the right of easement of enjoyment the federal judge ordered. This right states that any resident of the subdivision in which the golf course is located can become a member simply by paying the then effective dues of the club without paying an initiation fee. I believe there some other things based on some agreements made between the developer of the subdivision and the first owner of the club who designed and constructed it. These agreements caused the judge to also limit the use of the course to being a golf course. It cannot be sold for residential development. It also causes some of the covenants on the residential property to also apply to the golf course. The initial developer of the residential property simply gave the golf course land to the course developer gratis.

So, the course is for sale. I'm guessing that it can probably be gotten for round 1.9 million, more or less, but that's just my guess. Some of the residents had wondered about having the home owner's association buying it, but they came to their senses very quickly. If you'd like to own a golf course that's on the four mile boulevard known as Midland Road, you can buy it. All told, there are 9 golf courses along that boulevard that runs from the Town of Southern Pines
to the Village of Pinehurst, including the renowned Pinehurst #2.

[YmoBeThere]

Not trying to rain on anyone's parade, but hasn't golf been on a secular decline since the late 90's? Meaning fewer rounds of golf played per year countrywide since then? I say this, because like owning an airline stock, one should be very cognizant of where the industry is headed and it's ability or inability to generate returns that exceed its cost of capital.

[YourLandlord]

Not trying to rain on anyone's parade, but hasn't golf been on a secular decline since the late 90's? Meaning fewer rounds of golf played per year countrywide since then? I say this, because like owning an airline stock, one should be very cognizant of where the industry is headed and it's ability or inability to generate returns that exceed its cost of capital.



Rounds played changes year-by-year
Year Change
2008 -1.8 %
2007 -0.1%
2006 +0.8%
2005 -0.1%
2004 +0.7%
2003 -1.5%
2002 -3.0%
2001 -0.1%

http://www.waggleroom.com/2009/2/9/754131/us-golf-rounds-drop-most-i



Over the past decade, the leisure activity most closely associated with corporate success in America has been in a kind of recession.

The total number of people who play has declined or remained flat each year since 2000, dropping to about 26 million from 30 million, according to the National Golf Foundation and the Sporting Goods Manufacturers Association.

More troubling to golf boosters, the number of people who play 25 times a year or more fell to 4.6 million in 2005 from 6.9 million in 2000, a loss of about a third.

The industry now counts its core players as those who golf eight or more times a year. That number, too, has fallen, but more slowly: to 15 million in 2006 from 17.7 million in 2000, according to the National Golf Foundation.

http://thegnnblog.blogspot.com/2008/02/ny-times-confirms-participation-trend.html

[OZZIE4DUKE]

Almost every course is in tough financial shape. My home club is hanging on by a thread and has been for two or three years. Membership is way down, so dues keep going up, so membership drops even more - it's a vicious cycle - too many courses and clubs, not enough players/members.


Not trying to rain on anyone's parade, but hasn't golf been on a secular decline since the late 90's? Meaning fewer rounds of golf played per year countrywide since then? I say this, because like owning an airline stock, one should be very cognizant of where the industry is headed and it's ability or inability to generate returns that exceed its cost of capital.
Yes, I believe you are right.

[duketaylor]

Making some headway finding prospective investors and building a team to make it happen. Stay tuned.

[Reisen]

Chuck, I ran into a guy at a holiday brunch down in Kingsmill that own a Golf consulting business in the area, and is very familiar with the Federal Club situation. He's a former Tarheel golfer, but I'm forgetting his name right now (I have his card at home). You probably already know him.:p

[duketaylor]

I wouldn't mind talking with him if you can find his info. I talked with a friend in Durham this morning who is good friends with MJ, to see if MJ would be interested. MJ said, "No thanks," but I'm trying. I have a call into Joe Ogilvie now. We'll see what happens, I'll continue to pursue this.