As the supply and demand of golf courses continues to self-balance, some owners are taking advantage of the current real estate market—by choosing to sell.
From 1986 to 2005, the U.S. golf industry experienced its largest building boom, as almost 5,000 new courses were opened within that timeframe. Such exponential growth simply could not continue forever. As expected, openings have declined sharply over the past 12 years, with only 492 new courses opening since the boom ended.
The total number of U.S. golf courses decreased by 171 last year, representing a 1.2 percent contraction in a market that still has more than 15,000 facilities. This gradual reduction is actually indicative of the market’s healthy self-balancing of supply and demand — a trend that NGF researchers expect to continue for several more years.
Encouragingly, the contraction in supply has shown no direct impact on frequency of play, as rounds-played in the U.S. have increased each of the past two years.
Considering the strength of the real estate market – both commercial and residential – the reality is that golf course properties are often in high demand. No sport has the spatial demands of golf, with the exception of ski resorts, perhaps, but those mountaintop locations don’t have the same appeal as much of the desirable land upon which golf courses are built.
“There really aren’t any large tracts anymore for these developers to gobble up, so this is the next best thing and it drives up the cost of the land,” says Vince McLaren, golf course appraiser for the Palm Beach County (Florida) Property Appraiser’s Office.
Facility owners, on occasion, are using this demand as their exit strategy, echoing NGF president and CEO Joe Beditz’s sentiment that sometimes “the dirt is worth more than the grass.” Consequently, these golf courses are often sold to be re-purposed as multi-use parkland, nature conservation areas or needed development projects in high-density population centers.
“I love golf and I’m bullish about the sport,” says Jeff Woolson, who has been involved in the sale of more than $1.6 billion worth of properties as the managing director of CBRE Golf & Resort Properties Group. “But, with the exception of maybe Sand Hills and Augusta National, there’s probably not a golf course in the country that wouldn’t have a higher and better use as something else, economically.”
The following courses—within four of the country’s primary regions—have been sold in recent years for “higher and better uses,” as Woolson would say, resulting in benefits not only for the previous and new owners, but for the residents who live near the properties as well.
Midwest: Nature Center Purchases Former Highlands Golf Club
After purchasing Highlands Golf Club, a 121-acre property in Grand Rapids, Michigan, for $2.6 million from owner Steve Scheuermann, Third Coast Development intended to transform the land into a housing development. But after further consideration, it decided to sell the property to the Blandford Nature Center, a 501(c)(3) non‑profit, instead.
The change in plans occurred after The Land Conservancy of West Michigan partnered with Blandford to raise the funds necessary to purchase the property. The Conservation Fund also offered assistance through a $3 million short-term loan, while the Wege Foundation, the Grand Rapids Community Foundation, Pioneer Construction and the Cook Foundation also provided financial support.
When all was said and done, the 143‑acre nature center, along with The Land Conservancy of West Michigan, was able to purchase the former course for $3.5 million this February. Michigan still ranks fourth in the total number of U.S. golf courses behind Florida, California and New York.
“This project provides a big boost to our community’s efforts to ensure quality of life for all of our residents,” says Rosalynn Bliss, the mayor of Grand Rapids. “It also offers a rare opportunity to create significant green space and focused tree canopy in the city — priorities for our community, as we work to make sure this is a great place for everyone.”
“The Highlands offers an extraordinary opportunity to foster a stronger connection to the natural world through habitat restoration, environmental education and recreation—all things that will make sure our city is a great place to learn, live, play and work,” adds Jason Meyer, the nature center’s president and CEO.
Northeast: Solar Array Replaces Tallgrass Golf Course
On New York’s Long Island, Tallgrass Golf Club is being converted from a public course to a 127‑acre solar array known as Shoreham Solar Commons.
Invenergy, a Chicago‑based clean energy company, purchased the two-decade-old course this March from DeLalio Sod Farms with a high‑powered plan. Although it will not be the state’s largest solar array – it would trail only Brookhaven National Laboratory’s 32‑megawatt array – the Shoreham Solar Commons project is projected to produce the same amount of energy, approximately 50,000 megawatt hours on an annual basis. According to the Solar Energy Industry Association, one megawatt of solar can power roughly 175 homes in New York.
The 24.9-megawatt array has already been approved by the Long Island Power Authority (LIPA), as well as the state comptroller and attorney general. In fact, LIPA’s 20‑year contract with Invenergy is currently valued at $177 million, according to the comptroller.
As construction begins, nearly 100 workers will likely be employed over the next few months. Trees will not be removed at all during the process; instead, Invenergy will plant 2,000 evergreen and deciduous trees, as a means to screen the array.
Additionally, the array itself will not require any usage of fertilizers, herbicides or pesticides, which is a significant benefit for Long Island’s freshwater aquifer.
With almost 800 golf facilities, New York ranks third in U.S. golf supply.
“The array may not be as aesthetically pleasing as Tallgrass Golf Course was, but it’s likely a cleaner, better and more reliable use of land for the community as a whole,” says John Napier, the former vice president of field services at Tallgrass Golf Course. “DeLalio Sod Farms’ exit strategy was not only smart, but influential, as the array will positively impact the local community for years to come.”
Southeast: Redeveloping for Residential and Commercial Use
In February 2014, Marriott Grande Pines Golf Club in Orlando, Florida, was purchased by Florham Park, New Jersey‑based Ridgewood Real Estate Partners.
Since then, the company has rezoned and entitled the property – which is based in one of the world’s top tourist destinations — for 423 single family lots, 770 multifamily units and seven acres of commercial land.
“We purchased the property because we thought that the highest and best use would be to redevelop it for a residential and commercial use,” says Jonathan Grebow, president of Ridgewood Real Estate Partners.
Florida is the most golf‑rich state in the U.S., with more than 1,000 facilities, and leads the nation’s supply in both public and private courses.
In addition to the rezoning and entitling, Ridgewood Real Estate partners, along with New York‑based Angelo, Gordon & Co. LP, sold 16 acres of the former course to Altamonte Springs, Florida‑based Picerne Development Corp, which has developed a 282‑unit, luxury gated apartment complex known as The Oasis at Grande Pines. The one-, two- and three‑bedroom apartments include gourmet kitchens, granite countertops and security systems.
“When we purchase these well-located golf courses, it’s a way to be able to pay the owners more than their properties are currently worth as a golf course, and it allows us to repurpose potentially underutilized land,” Grebow explains. “We are then able to redevelop them into thoughtfully designed projects, which include amenities that can benefit future residents.”
West: Building a Beach on the Las Vegas Strip
A recreational lake, possibly with a white sand beach, could soon be a premier destination on the Las Vegas Strip, fully utilizing land occupied by the Wynn Golf Club.
Steve Wynn, the chairman and CEO of Wynn Resorts, has detailed plans for a new entertainment complex on the same 130‑acre property that’s currently home to lush fairways and greens. The concept – Paradise Park — would include a 20‑acre lagoon surrounded by meeting and ballroom space, a 4,000‑foot boardwalk, cabanas, attractions and food service.
The Wynn Golf Club is the only golf course attached to a resort on the highly-trafficked Las Vegas Strip, with casinos on one side and the Las Vegas Convention Center close by on the other. The location alone makes the land highly desirable, especially as a multi‑use entertainment venue, and the course is set to close at the end of 2017.
The Las Vegas/Paradise, Nevada area is still home to more than 1,000 holes of golf, with more than 80 percent of those open to the public in some fashion.
Wynn has said the proposed expansion could feature a new 1,000‑room hotel tower, a small casino, a pristine beach and an array of daytime activities that include water skiing, paddle boarding and parasailing. It could also be a downtown entertainment attraction at night, with elaborate fireworks launched from a 120‑foot center island as well as surrounding areas. For now, only the lagoon, the boardwalk, meeting space and cabanas have been approved by the board of directors, with construction tentatively set to begin in January 2018.
“We have a chance to reinvent Las Vegas and make the whole venue an idyllic beach paradise,” Wynn said. “People come to Las Vegas from all over the world to live large and have a good time, and we can dish up an irresistible entertainment attraction.”
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