Quality and Number of Courses

By Barton Tuck 

You’ve made the decision; you are going to find that dream home within a golf-oriented private community. You’ve narrowed your search to a specific region of the country and even to a very short list of properties. But still you have questions.

One important question deals with the golf amenity itself. That is, will I be satisfied in a community that offers 18 solid and challenging golf holes or should I look at communities that offer two or more courses?

That one seemingly simple question, however, gives rise to a number of related inquiries. First and foremost should be availability; how much use and therefore, how crowded will the golf course or courses be? Also, there is the cost consideration. What is the cost difference for me, the member, if I join an 18-hole club, versus a club with 36 holes or more?

The answer to these and other questions ultimately comes down to pure numbers. At completion, how many members will the community have per 18 holes? The number that comfortably works is somewhere between 350 and 400.

This may sound low to some, especially those who have heard a developer say something like “yes, we’re going to have 650 members, but most who are buying here are purchasing secondary residences. They will only be here a few months out of the year.”

Don’t automatically accept such statements as gospel. Ultimately, you have to assume the entire community will be permanent residences. It may be some years from now, but eventually, the community you are buying into today is going to be predominantly primary residences. If you go back and look at the communities that were developed in the ‘70s, that is what has happened.

So the most important thing you need to do, as a potential investor, is look carefully at the numbers going into the project. For the sake of simplicity, let’s look at a 1,000-acre development. If the developer says there will be 350-400 members in the club at completion, something is wrong. The numbers indicate otherwise.

Typically, an 18-hole facility, with clubhouse, practice area, parking and maintenance area, requires approximately 250 acres. Take out another 25 percent, or 250 acres, for roads, common areas and utilities. Now, if the average lot size for the development is three-quarters of an acre, you will see that this particular development will yield 550 to 600 lots. If that is the case, you can expect that all 550 to 600 residents will someday want to get on that golf course.

Likewise, if a development promises 750 lots and two golf courses on that same 1,000 acres, that won’t work either. Despite the sales pitch, the numbers tell us it simply can’t happen.

Here, we are primarily discussing communities still on the upside of the development curve. Obviously, if you are looking at a property that is completed or nearing completion, amenities are already in place. But often, potential investors are asked to evaluate a community on what it will become, not what it is. This is when it is important that you do your homework.

The savvy consumer needs to be aware of and understand certain basic principles of the development business. And as a savvy consumer, never assume that there will be a second (or third) golf course, just because the developer says there will. Though the plans may call for such, no developer should “cast in stone” that the community is going to include a second golf course.

Permit me to site one of my own current projects, Forest Creek in Pinehurst, as an example. Going into the project, our plan was to have two golf courses and 750 lots, average size eight-tenths of an acre, on 1,265 acres. The numbers work perfectly because it’s an ideal site—rolling land in the North Carolina Sandhills—where the great majority of the land is usable. We had only about 150 acres of wetlands in the entire site, much of which has been incorporated into the golf course routings, providing natural hazards that add to the challenge of certain holes.

Even though the numbers were perfect, we established parameters that provided assurances for our property owners. We stated, from the beginning of the project, that once we sold 350 lots, we would begin construction of the second course. And we would not sell another lot until construction of the second golf course began.

That is exactly what we did, and now, Forest Creek has two Tom Fazio-designed courses in play for the members.

As a developer or as a property owner, there are advantages to having a second course, assuming the membership numbers support the facility. Obviously, for the member, there is the variety of having more holes to play, but the advantages go deeper than that.

Assuming both courses play out of the same clubhouse, you only have the overhead of one clubhouse—staffing, hard costs, etc.—spread over a larger membership. Similarly, maintenance costs for a 36-hole facility are cheaper per hole, than with 18 holes because you only have one superintendent. (You may have two assistants, but only one superintendent.) Also, the costs of equipment are averaged over 36 holes, rather than 18. Yes, you may need more equipment overall, but your equipment needs are not doubled, even though your facility is twice as large. So if it cost $800,000 per year to maintain one golf course, you may be able to maintain 36 holes for an additional $500,000, or $1,300,000 total. You are able to double the amenity without doubling the cost.

As a potential investor, the advantages of having more than one golf course available to the membership are many. Should one course be needed to host a tournament, like the Member-Guest or Club Championship, or a private function—a wedding party, for example—members not involved in such events can still play on the other course. Routine maintenance practices, such as overseeding, aerification and topdressing, often require that a course be closed for a day or even a few days. By scheduling maintenance on two courses alternately, a club can always have one course available for member play. Similarly, private clubs routinely close one day a week, most of them on Monday. But clubs with more than one course can allow each course a day of “rest” without costing the membership the opportunity to play seven days a week by closing courses on different days. The additional tee times add value to your membership and provide added revenue for the club.

While there are advantages of having more than one golf course within a community, such communities will always be the exception, not the rule. The reason is simple—space. Particularly along the East Coast, there are not that many tracts of land available where a developer can purchase 1,265 contiguous acres like we have at Forest Creek.

We are currently developing a private community in the North Carolina mountains, near Hendersonville, called Bright’s Creek. It represents a truly rare opportunity in today’s market in that it is 4,700 acres. To put that into perspective, that is four times the size of Colleton River Plantation at Hilton Head and roughly the same size as Kiawah Island, without the wetlands. Those are two very successful and very well done developments; Colleton River has two golf courses and Kiawah has four on the island (two more just off the island). But there are very few such parcels remaining.

To this point, we’ve talked primarily about numbers. The other question you need to ask, as a potential investor, when you are looking at any golf community, regardless of its size, deals with quality. Make sure that the developer is committed to a degree of quality that satisfies your demands. And make sure the developer has the wherewithal to complete what is promised.

When you are considering purchasing within an established community, it is much easier to assess both the quality and commitment of the developer. But often, potential investors are asked to look into and predict the future when they consider purchasing property in a community that is in its earliest stages of development. And this is always the case when communities launch pre-construction sales campaigns.

Regardless of how many golf holes are promised, it is more important that a potential buyer knows exactly what is planned for the overall development. Will it be all single-family homes? Or will it be a blend of single- and multi-family housing? If so, how many condominiums are planned and what will be the total number of housing units at build-out? All of these things affect the club experience. It all goes back to what we talked about earlier; what is the ideal number of members per 18 holes of golf? You may have 36 holes within a community, but if you have 1,200 housing units, you’re still going to have an oversubscribed club.

The best advice one could give a potential buyer is simply “do your homework.” Look at the developer’s track record, the company’s history. When people come to look at Bright’s Creek, we often suggest that they go and look at Forest Creek. If the developer has done other communities, go look at them. The time it will take is the best investment you can make.

— About the Author —

A resident of Greenville, S.C., Barton Tuck has more than thirty years experience in the golf industry, including development, designing, construction and management. He is the owner and president of Wingfield Properties, a company that manages seven golf courses. Currently, he is the developer and managing partner of Forest Creek, a private, upscale residential community in Pinehurst, North Carolina and the developer and managing partner of Bright’s Creek Golf Club, a private, upscale residential community being developed in the foothills of the North Carolina mountains near Hendersonville and Lake Lure.

Prior to that, he served as founder and chairman of GolfSouth. During his tenure with GolfSouth, he was responsible for successfully developing 10 high-end golf properties, two of which he personally designed. Prior to founding GolfSouth, Barton was president and chairman of U. S. Shelter Corporation, one of the largest developers and managers of real estate properties in the United States. 

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