Closed Golf Courses Causes Huge Drop In Property Values
If you or a friend live in a golf course residential development, you must pass this message on to everyone concerned. Even the rumor that your neighborhood golf course is failing will affect the value of your property.
Here’s a sad situation going on right this very moment. It’s a once successful Florida residential community golf course that has failed after a succession of incompetent owners. I’ve followed this one since 1994.
I first visited the golf course just off Interstate Highway 4, just east of Tampa, Florida. It was in the mid-1990s. It was a proud 2,200 residential unit development with an excellent 27-hole golf course as its centerpiece. The golfing fraternity highly regarded the golf course.
I remember the full parking lot, the busy and bustling clubhouse, carts ready-to-go on the tarmac, golfers warming up on the practice range, and a lineup to pay green fees in the pro shop. The facility included a swimming pool and a fitness room in a nearby but separate set of structures. The main two-story clubhouse had full banquet rooms, grill room, lockers, and showers, offices, etc.
The golf course was in excellent condition in 1995.
Today (June 28, 2017) the golf course is closed, and the grasses are waist high. The clubhouse has deteriorated, the swimming pool closed, and the fitness room is close. There has been a string of owners of the golf course since the mid-90s - each apparently less competent than the other.
When I reviewed the property for a potential buyer-client in early 2000, I could see the place was deteriorating. I even took pictures of collapsing bulkheads usually a sign of a golf course in decline. Meanwhile, I saw evidence of incompetent management including dirty golf carts, ungroomed sand traps, greens sadly needing attention, and potholes in the parking lot. The clubhouse had also begun to deteriorate due to lack of general maintenance.
In around 2005 the business of golf was still a seller's market business. I felt the subject golf course under competent ownership should still have been a very good business. I felt the right owner should congenially re-connect with the 2,200 homeowners to create a sense of community care and involvement by the golf course. I knew there was a rift between the HOA and the golf course - a strange phenomenon I see too often (Strange to me because the residents and the golf course share a mutual interest). In 2005 I felt the golf course was still quite recoverable with a reasonable effort because there were plenty of golfers to populate the tee sheet.
I knew because, at that time, I was managing a popular 36-hole golf course on the north side of Tampa. The Tampa golf course was hosting close to 100,000 rounds with gross receipts over $4 million with food and beverage doing $1 million of that. We were hosting over 300 corporate outings a year. In fact, we were turning bookings away because we had no open dates. My experience at Tampa 36-hole golf course was evidence that a great golf course like the subject should easily attract all the business it wanted.
Unfortunately, the golf course suffered subsequent owners that completely bungled the business. So, today, 2017, the golf course is closed right down and its future uncertain. In interviews with residents, I learned they were threatened by the most recent golf course owner if they didn’t fork up a monthly fee to help support the golf course he would close it. Of course, the residents gave the golf course owner a two-word phrase and the war was on. The golf course closed.
Currently, threats to develop the property are concerning the very property owners who were more or less golf course adversaries for most of the time. They are about to lose their precious open space. Worse than that, they’re losing equity in their homes (10% to 30%). What they don’t yet realize is that neighborhood crime will spike – as it did in Alachua, Florida when a golf course closed in that community.
Associate, Bill McIntosh and I are in conversation with a concerned resident in this failed golf course neighborhood. We learned the HOA Board is more or less frozen to do anything. What’s left of the golf course is being cut with flail mowers instead of precision fairway mowers. The greens are totally gone. The once proud golf course neighborhood is deteriorating.
We are recommending a group of concerned residents forms a feasibility group to gather the facts and determine whether the golf course can be recovered and operate successfully. Our job, Bill McIntosh and I, is to analyze the landscape from our perspective and report to the feasibility committee. We don’t BS. If we believe the golf course is permanently doomed then that will be in our report.
Although initially, it would seem that 2,200 residents should be able to support a golf course, convincing people who don’t play to pay more cash to support the golf course is no simple task. It often only takes a handful of nay-sayers to kill that idea.
I have gained much experience in the HOA-golf course dilemma in recent years. The Tampa area 36-hole golf course I managed had 1,100 homes and the golf course and neighborhood is still healthy today. I was hired to advise an HOA group in Mesa, Arizona and the result there worked out beautifully. Unfortunately, I was unable to get my hands around the 1,100-home golf course development in Alachua, Florida and that one is still floundering. Another residential golf course in Louisville, KY, could not accommodate its 840-home residents and the golf course owners lost their golf course. Meanwhile, there is disarray and lawsuits flying around the once beautiful golf course neighborhood.
If your community golf course is rumored to be in trouble, you need to call me before it affects the value of your property. If the golf course ever starts to grow in, you’re going to lose from 10% to 30% equity in your residence. It can take ten years or more to recover – maybe never.
$110 MILLION LOSS IN GROSS PROPERTY EQUITY?
Figure it out. In the subject golf course neighborhood if 2,200 residential properties with a market value individually of $250,00 per unit lose 20% in value, or $50,000 when the golf course closes, $110,000 million just went up in smoke ($50K X 2,200 = $110 million).
You need to view this YouTube presentation showing the effect a closed golf course will have on your property: https://www.youtube.com/watch?v=KqScfxgYf7M.
Mike Kahn, President
St Petersburg, Florida