The Pellucid Perspective - April 2023 - 10

COMINGS
& GOINGS
13 activities, exclusively Transactions/For Sale
The second is the continuing saga in Watertown NY where
F
or a 2nd consecutive month, the sampling of golf activity
that we monitor in the public domain and through our
professional network showed liquidity as the key theme
(vs. " plants " or " plows " ) through a curious variety of transactions
with no discernable geographic or asset type pattern.
Here's the March scorecard (with lots of zeros):
* Opens/Re-opens - 0
* Closeds - 0 (now 8th month in a row, longest streak
since we began this column in '21)
* Transactions (continuing golf operations including For
Sales) - 13
* Redevelopments (transactions not continuing as golf
operations) - 0
* Reconfigurations (Priv-Pub switch, downsize holes,
Priv->Muni ownership etc.) - 0
* Other - 0
The table provides details and commentary for each activity.
For those not into detail (or our entertaining commentary),
below are our general observations on the patterns and trends.
From a valuation perspective, we only have selling prices on a
few but, of those, it appears the price metrics and premiums
over last purchases continue to be all over the board from giveaways
to bonanzas. This suggests that golf course valuation
continues to be as much dark art as science.
We selected 3 " human interest " stories to highlight this
month (none of them being April scoreboard events). First,
the dormant trend of massive real estate communities anchored
by golf and other high-end amenities appears to be
making its comeback. Exhibit A is a proposed " sportsman's
retreat " in North Augusta, SC (that's not a typo, yes, North
Augusta is in SC) named Cypress Shoals which is working its
way through planning and approvals. The development would
include 2 18-hole golf courses, hunting, fishing, equestrian activities
and 20 miles of hiking trails (basically, a marathon's
worth on property). Covering ~1.7K acres, it would be a return
of the big, hairy, audacious real estate development with
golf as a main draw.
Golf's landscape changes
Course
Event
Open/Re-open
Closed
Kenmure Golf
Club
Transacted/For
Sale/Auction
GreenvilleSpartanburg
SC-Asheville
NCAnderson
SC
Priv/18
Purchased by individual, Steve Schorr, reported
price was $10.8M for course/clubhouse ($6.7M)
and 84 acres of vacant land ($4.1M). Kemper to
manage but much speculation about whether the
course will continue or get added to 84 acres for
development (the price tag for the course might
support that conspiracy theory?)
10 The Pellucid PersPecTive
April 2023
DMA
the city of Watertown agreed to purchase, from a private owner,
the 18-hole Watertown GC for $3.4M. While many will
agree that the land on which that course sits is not cheap, the
recently-completed independent appraisal (which was done
after the purchase agreement?) came in at $1.1M. Adding
insult to injury, the city paid the private owner an additional
$850K for a deed restriction on nearby Ives Hill CC which
was supposed to enhance the value and marketability of the
Watertown facility whereas the appraiser noted that the deed
restriction likely " doesn't add any appreciable value to the valuation
of Watertown GC " (oops). But wait, there's more, adding
likely stupidity to injury is the fact that Watertown already
owned the land on which half the Watertown GC sits so they
either paid twice for that land or incredibly over-valued the
whole deal when that's factored in. Your taxpayer money hard
at work, residents of Watertown (but, in fairness, the elected
city council " did the deal " so taxpayers were adequately (if not
fiduciarily) represented).
The final story also comes to us courtesy of municipal government
and golf. In West Orange NJ, the Rock Spring GC
was bought by the Town of West Orange which wanted to
protect a golf course " on the block " and passed a bond for
$12M to cover the $11.2M negotiated price (that's also some
expensive dirt!). Surrounding Essex County had also shown
interest in it but couldn't find the " scratch " so they had to take
a pass and let West Orange snap up this once-in-a-lifetime(?)
for 18 holes of golf. Fast forward 3 years and West Orange is
experiencing the pain of an additional $1.3M annual expense
impact (don't think that includes the debt either) and Essex
County has now " come into some money " . Essex County has
floated the idea of taking Rock Spring GC off West Orange's
hands (price not mentioned) and West Orange has responded
" Over my dead body " or something similar. So, from our vantage
point, we have two municipal entities fighting over who
wants to lose money on this golf course for the next 10-15
years. Are we missing something here or could it be said that
some number of US municipalities currently suffer from the
challenge of having more money than brains??
Type/Holes Summary
The Pellucid Perspective - April 2023

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