Deeds and Weeds

Results for March 2009 Back to Deeds and Weeds Index

A Short Heritage

Tuesday, March 31, 2009 Comments
Picture 1.jpgThe developer of Heritage Plantation, an upscale-minded community in the Florida panhandle town of Crestview, has put the brakes on his plans and is handing over the keys to his lender, BB&T.

The development features a Bill Bergin-designed course that appeared as No. 5 in Golf Digest's Best New Public rankings this year.

That wasn't enough of a draw, apparently. There were supposed to be nearly 800 homes, with prices starting at $359,000 for homes of 1,700 square feet. Yet developer Steve Riggs has sold only 57 lots and only four homes have been built, according to the Northwest Florida Daily News. "I would have been OK with 20 to 25 lots a year," Riggs told the paper. "But I think we sold one in all of 2008."

The development may be a bust, but Riggs scores points with me for his honesty: "It's not my first failure and it probably won't be my last," the paper quotes him as saying.

My Deeds & Weeds colleague, Geoff, notes this is the second 2009 Best New Public finalist to make headlines for financial problems. A couple of weeks back he posted an item about Cottonwood Hills, a Nick Faldo design in Kansas. Cottonwood Hills shut down in December but is supposed to reopen later this week.

-- P.F.

Posted by Peter Finch
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U.S. Travel Officials Fight Back

Tuesday, March 31, 2009 Comments
Business travel has been pummeled by the public reaction to corporate entertaining, particularly by businesses that have received federal relief funds. Now, as this story in today's New York Times explains, the travel industry is starting to push back.

As the piece explains, "In a lobbying effort spearheaded by the U.S. Travel Association, industry representatives have met with President Obama, released a flurry of statistics about the economic contribution of meetings and events ($101 billion in spending, one million jobs) and have even established a 'rapid-response war room' to address 'false accusations against legitimate travel activities.' "

According to the story, a USTA study showed that hotel companies lost $220 million business in January and February alone. Starwood Hotels and Resorts, where group revenue is down 40 percent so far this year and cancellations are up 50 percent, was forced to lay off 10 percent of its staff, about 6,000 employees. 

The story goes on to make the case that most business travel is justifiable (in that it has a healthy impact on areas like product sales, customer loyalty and employee retention) and more often than not does not involve senior-level executives. 

--G.R.
Posted by Geoff Russell
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Second-Home Sales Slump

Tuesday, March 31, 2009 Comments
rug.jpgSales of vacation homes plunged by almost 31 percent last year, the National Association of Realtors reported yesterday. The median price was $150,000, down 23 percent from 2007's $195,000.

Investors have been staying away from second homes too. They bought 17 percent fewer homes in 2008, a decline to 1.12 million from 2007's 1.35 million. (Over the same period, primary-home sales fell by 13 percent, to 3.77 million.)

From the NAR's report: "The typical vacation-home buyer in 2008 was 46 years old, had a median household income of $97,200, and purchased a property that was a median of 316 miles from their primary residence; 35 percent were within 100 miles and 36 percent were 500 miles or more."

Interesting side note: More than four out of 10 investment buyers and more than three in 10 vacation-home buyers paid cash for their properties last year. Large percentages said  portfolio diversification was a factor in their purchase decision.

-- P.F.
Posted by Peter Finch
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'People Are Going To Keep The Hobby Going'

Monday, March 30, 2009 Comments
Marlborough CC.jpgThe headline in today's Marlborough (Mass.) Enterprise is "Country clubs whacked by economy," and there's no doubt clubs in this area just west of Boston are hurting. But I was actually surprised by how well they seem to be holding up -- at least to judge from the article.

The GM at semi-private Marlborough Country Club (pictured) tells the paper his club lost 67 members last year, a little more than double the usual annual attrition. But it signed up 60 new members. One reason: It decided to waive its $4,000 initiation fee and has frozen annual dues at $3,300 a year.

Framingham Country Club, meanwhile, reports a 12 - 15 percent decline in membership. Normally it has about 5 - 8 percent turnover per year, says the manager. It hasn't cut the cost of joining (a $17,000 bond and a $15,000 fee) but it is allowing new members to pay it off over time.

The area's more elite clubs seem to be less affected, unsurprisingly. The manager at the Donald Ross-designed Charles River Country Club in Newton says he's got a four-year waiting list for new members.

At Golfer's Warehouse in Natick, a spring sale last weekend drew a decent crowd, its manager told the paper. "People are going to keep the hobby going," he said. "Golf is kind of addicting, but I think anything is vulnerable."

UPDATE: A similar article appears in England's Daily Telegraph today. It contends that about half the U.K.'s 2,500 clubs have lost members and 19 of them have gone into administration this year alone. (When an entity goes into administration, that means an outside agency has been called in to unload its assets and pay off creditors.)

-- P.F.


Posted by Peter Finch
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Greens Fees Falling in Palm Springs

Sunday, March 29, 2009 Comments
Greens fees are dropping in Palm Springs, as golf course operators slash rates in an effort to generate business. According to this story in today's Desert Sun, prices have fallen to pre-2000 levels. And it seems to be working -- for course owners and their customers.

At Eagle Falls GC in Indio, operators dropped greens fees $20 (to $75 weekdays and $95 weekends) after one of the slowest Januarys in years. "I don't think since Feb. 1, we've had any less than 150 rounds a day," Eagle Falls director of golf Willie Maples told the newspaper. "I don't know where [all the golfers] are coming from, but thank goodness for the business. We made the right decision."

Other courses in the area have adopted similar strategies, including Trilogy GC in La Quinta ($130 greens fee to $100); Indian Canyons in Palm Desert (discounts of $20 to $30, depending on the day and time); and Desert Princess in Cathedral City (which is offering a deal of five rounds of golf and $100 worth of food for $349).

-- G.R.
Posted by Geoff Russell
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Chapter 11 Filing For Edra Blixseth

Saturday, March 28, 2009 Comments
Edra.jpgEdra Blixseth, ex-wife of Yellowstone Club founder Tim Blixseth, has filed for Chapter 11 bankruptcy protection. She says the move was designed to keep creditors from seizing her various properties, valued at $100 million to $500 million (against debts of $500 million to $1 billion).

The now-bankrupt Yellowstone Club is among these assets. She intends to sell the club at auction, with Boston-based CrossHarbor Partners as lead bidder.

This is where a messy situation turns even messier. CrossHarbor principal Sam Byrne, a Yellowstone member, has been working with Edra on a rescue plan for the club. Last year CrossHarbor even lent her $35 million, a loan that is now in default.

Tim Blixseth and the club's lenders, headed by Credit Suisse, oppose the sale. They claim CrossHarbor's goal is to gain control of Yellowstone for a fraction of its real value.

Based in Big Sky, Mont.,Yellowstone Club opened in 2000, attracting the likes of Bill Gates and cyclist Greg LeMond as members. It features a private ski mountain and a golf course designed by Tom Weiskopf.

Articles on Edra's bankruptcy appear in NewWest.net and Bloomberg.

-- P.F.




Posted by Peter Finch
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Four Memberships For The Price of One

Friday, March 27, 2009 Comments
We've been saying it for the last few months: In this turbulent economy (in the golf market as well as the overall business world), there are incredible opportunities for golfers. Here is a great example of what we mean:

Four private country clubs in the Tampa, Fla., area -- all owned or managed by ClubCorp -- have banded together to offer a joint membership. The clubs are Hunter's Green, Countryside, East Lake Woodlands and Tampa Palms. The deal is called the "Cross Bay Club membership." Members get access to all four facilities, including 99 holes of golf, 59 tennis courts, six pools and a variety of health and fitness facilities. They also receive discounts on a number of golf-related amenities, including 10 percent off golf cart rentals and 25 percent off food and beverage purchases.

You can't beat the cost: new members pay a $250 fee to join (initiation fees to the four clubs, in better economic times, range between $3,000 and $6,000), and monthly dues of $265 (for members younger than 41) or $415 (for those older than 41). They also sign a one-year loyalty pledge to the club promising not to resign and join another facility for 12 months. Existing members of one club pay the difference in dues in order to upgrade to the Cross Bay Club membership.

For more information, you can visit the club's website here.

-- G.R.

Posted by Geoff Russell
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When Golf Is 'Discretionary'

Friday, March 27, 2009 Comments
url-3.jpgA couple of guys I know have either dropped out of golf clubs or put their memberships "on hiatus" because of the economy. It seems like a reasonable thing to do. They're worried, and this is one pretty easy way to cut costs from the family budget.

Today's Baltimore Sun has an article on folks like these, avid golfers who've had to give up their club memberships and are now often found on Maryland's public courses. One of them has even started an outfit called the Poor Boys Golf Club, a club-without-real-estate that now includes 55 members. They have a "tour" that includes weekly events at different courses and a Fed Ex Cup-style points system.

A few private clubs in the area are responding to the downturn by cutting fees. Hillendale Country Club has cut the initiation on its priciest membership in half, to $11,000. Towson Golf & Country Club is waiving its initiation for the second year, a savings of as much as $10,000. 

The article points out that not every course is struggling. Some of the area's lower-priced tracks, such as Rocky Point and Clifton Park (where peak green fees are in the $30 range), are anticipating busy seasons -- fueled in part, no doubt, by some of those private-club refugees.

-- P.F.



Posted by Peter Finch
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Spending Money To Make Money

Thursday, March 26, 2009 Comments
2greenb_mtogden.jpgSome try to get ahead by cutting back. Others take the opposite approach, figuring you've got to spend money to make money. It's not easy taking Door No. 2 these days, but that's what a group in Ogden, Utah, is proposing for the city-owned Mount Ogden Golf Course.

The course, which carries four stars out of five in Golf Digest's Places to Play ratings, has been posting annual losses of $250,000, reports the Ogden Standard-Examiner. A citizen advisory group is proposing to build a $70 million condo/hotel complex overlooking the course to attract more golfers and increase revenue.

The plan includes $6 million to $8 million of work on the course by Nicklaus Design, an expense that would (theoretically) be offset by the sale of timeshare condo units. Also part of the proposal: a new clubhouse. "I'm excited that they have come up with a solution that doesn't involve taxpayers footing the bill," Ogden Mayor Matthew Godfrey is quoted as saying.

-- P.F.
Posted by Peter Finch
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'This One's Different'

Wednesday, March 25, 2009 Comments
url-2.jpgThe Bay Point Marriott Golf Club near Panama City, Fla., is using billboards along U.S. 231 to advertise discounted rates of as little as $39 a round. So reports the Panama City News-Herald in a roundup look at the struggling local golf economy.

Normally the Jack Nicklaus-designed club (pictured) would charge $75 for a morning round in peak season.

The article quotes Jack Seltzer, general manager at Bay Dunes Golf Club, as saying the economy feels unlike any he's experienced. "I've been in the business for 35 years ... [and] all the other times we've had a downturn in the economy, the golf business was real good, at least our golf business was. This one's different. This one's real different."

Seltzer is thankful his "snowbird" traffic has been fairly strong this year. Local play, he notes, has been off lately.

Nearby, Hombre Golf Club shut nine of its 27 holes for the winter to save on maintenance costs. General Manager Dan McGrath told the paper, "We're just hoping the rounds pick up so we can start using all 27 again."

-- P.F.
Posted by Peter Finch
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