The Pellucid Perspective - August 2019 - 9

nually or is there something else at play here? Let's look at the
underlying "stocks and flows" from NGF which are directionally
in line with Pellucid's figures through our Internet Golf Course
Database (email IGDB at support@theigdb.com to request more
info) asset:
*

*

In the '18 report, they showed 0.5 muni EHEs opening
and 12.5 muni EHEs closing which contributed to the
record number of muni facilities of 2,497 (yes, I know
I'm mixing EHEs and facilities, but stay with me here).
That's a net reduction 12 EHEs in my book and yet the
2,497 was a record number, how's that?
Likewise, in the '19 report, they again show 0.5 muni
EHEs opening but 14.5 muni EHEs closing which
contributes to the record number of muni facilities of
2,515. Now we can do the math since we know what the
'18 baseline number was (2,497). We increased by 18
facilities despite the "loss" of 14 EHEs (let's call those
EHEs facilities for the sake of argument) which means
there had to be a "net pickup" somewhere of 32 facilities
not accounted for in openings/closings.

And therein lies the rub. Our knowledge of the market as
well as our tracking of public-to-muni conversions suggests that
the muni "gains" which are producing the "high-water mark"

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and muni golf being "on the upswing" are driven exclusively by
municipalities taking over failing private enterprise golf courses. Wait, it gets even better (unless you're a taxpayer in one of
these municipalities, then "it gets even worse")... Based on the
public domain information published on a limited number of
these private-municipal transactions, the municipalities picking
up these non-performing assets are rarely, if ever based solely on
the public domain information we monitor, purchasing them at
any type of discount based on their underlying demand history
and financials. In a select number of cases (but not as few as I
would expect), the municipality is purchasing the course for abstract/aspirational reasons (civic pride, green space preservation/
limiting development etc.) and, for those future dreams, paying
a premium to fair market value. Ed Getherall, NGF Director of
Consulting Services in the same Q article pretty much nails it:
"At some daily fee courses that are struggling, owners are closing
the facility in order to cash out. Unless the land can never be
used as commercial or residential property, owners of a privatelyowned public course will usually try to sell it to the homebuilder. Citizen groups often oppose that effort and try to convince
the municipality to buy the course instead. But the cost often
comes at a premium since the owner uses the developer option
as leverage." Exhibit A is Northampton Valley Country Club
which the Township is pursuing to take over and run as a golf
course at a price of $12.5M (in Bucks County PA, not a thriv-

The Pellucid PersPecTive

9

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The Pellucid Perspective - August 2019

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