Lemonade For Sale

Jim Taylor and Chip Hanly

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August 27, 2009

Jim Taylor is the first to admit his timing was less than ideal. Co-owner and developer of Clear Creek Tahoe, a new high-end golf club near the California-Nevada border, he bought the property in mid-2007 -- as demand for such developments was peaking. Undaunted, he and co-developer Chip Hanly (on the right in this picture) went ahead and built a Bill Coore/Ben Crenshaw-designed course on the site and opened it this summer, right in the middle of a worldwide economic slump.

"To say it's contrarian would be an understatement," Taylor conceded in a recent interview with Deeds & Weeds.

Taylor and Hanly originally planned to sell 384 lots near the course along with a like number of memberships. But the brutal economy iced that idea. So now they've had to readjust their marketing plans -- indeed, their entire business model -- to reflect the new reality. The two decided to "mothball" their real estate sales operation and focus instead on selling the golf club.

The goal is a membership of just under 500 golfers. They hope many of these members will eventually get around to buying a lot and building a home...but members are under no obligation to do either. In the meantime, Taylor and Hanly -- who made their money in southern California and Arizona property development -- are essentially financing the club out of their own pockets.

"The reality is, the circumstances changed and we reacted to them," Taylor says. "It took away some things. It also gave us an opportunity to really reach out to a membership that wasn't driven by real estate but by people who want to actually be part of the amenities and who we can invite to join. We have an opportunity to put together a really fun club."

Handed lemons, in other words, they're giving the lemonade business a try.

Will it work? Impossible to know, of course. But Clear Creek Tahoe does offer an interesting window into the world of high-end golf course development these days. Here is my Q&A with Jim Taylor, in which he discusses his five- to 10-year time horizon for making money on Clear Creek Tahoe, why Arizona's Whisper Rock serves as a sort of model for his club, and more.

-- P.F.

Jim Taylor, co-owner/developer
Clear Creek Tahoe

Q. Even a casual reader of Deeds & Weeds would probably guess this is not the greatest time to be opening a new golf course community.

A. There's no question. To say it's contrarian would be an understatement.

Q. Has the plan been underway for a long while?

A. My partner and I, Chip Hanly, purchased the property in May of 2007. A number of golf course architects had made a pitch to route a course up there -- including Nicklaus, Jones, Greg Norman and then around the time I first got involved we had Fazio up and also Tom Doak. When Chip Hanly and I actually closed on the purchase, we shifted gears when we learned Bill Coore and Ben Crenshaw might be available to do the project. The land is so unique, we felt it needed an architect ...and Tom Doak would certainly be in that category ... that would find the golf course on the land and not make a golf course on the site, if you follow me. So Bill Coore came out and spent 10 days at the property before he agreed to take on the assignment. But getting back to your original question, we felt we had a unique opportunity to get Bill and Ben to do the project.

Of course, hindsight is 20/20 but at that point in time we felt that it was a fortuitous set of circumstances to get a piece of property special enough that they'd be willing to go forward, and No. 2, to fit into their schedule, because they only do one or two a year and don't vary from that rule. So we felt, "Let's grab 'em; let's go," and we immediately commenced moving forward with the golf course. We did not want to miss the opportunity of having them be our architects. The high-end market appeared to be unaffected by what was going on [in the economy].

Q. Did you ever give any thought to putting it on hold?

A. It got to a point in 2008, when the golf course was finished and we had to decide whether to open it or mothball it, we had a discussion of whether it would make sense to move forward or not. And we decided we had something so unique, provided we position ourselves properly in the market, that it made sense to go forward in spite of the circumstances that the world seemed to be going through. We decided it was in the best interest of the project to open it and to expose it to the people ... but we were already deciding at that point that it was not the right time to move forward with the infrastructure for our subdivision and we were simply going to mothball the real estate.

Q. What about the course is so unique?

A. We have an extraordinary setting. It's actually an ancient landform; it's a saddle between the eastern face of the Sierras and this really remarkably dramatic outcropping that towers up to 6,500 feet. ... This is basically a flat piece of land that sets in a mountainous setting. ... The site itself has hundreds of thousands of beautiful pines. And the soil is just remarkable -- it's basically composed, decomposed granite. The soils are such that we did not have to important any soil except for bunker sand.