The Pellucid Perspective - July 2024 - 10

COMINGS
& GOINGS
Pretty Quiet as Expected During Peak Season
J
une activity across the public domain sources we monitor
(as well as our weekly conversations with various business
associates) was sub-5 activities which is comatose. We recognize
however that we don't have complete knowledge or visibility
so there's likely still 25-50 activities out there not on our
radar for this column. Per the current trend, nearly everything
is transactional vs. openings and closings but we did have a 27for-25
swap this month in Detroit that was years in the making.
Here's the month's scorecard:
* Opens/Re-opens - 1 (might this be the only non-profit
golf facility in the US?)
* Closeds - 0
* Transactions (continuing golf operations including For
Sales & Auctions) - 3
* Redevelopments (transactions not continuing as golf
operations) - 0
* Other (name change, Priv-Pub switch, downsize holes,
Priv->Muni ownership etc.) - 0
The table provides details and commentary for each activity.
For those not into detail (or our entertaining commentary),
we continue to expect that the continuing COVID " lift " would
increase and improve liquidity in the industry by making golf
courses more desirable and improving valuations for those wanting
to exit the industry (retirements, end of targeted holding period
etc.) but it appears that things are so good that prior sellers
are choosing to " ride the wave " a little longer. That said, we're still
seeing some number of challenged properties (see Maggie Valley
listing this month) which are struggling to find a buyer/consensus
value point even in this favorable market for golf operations.
One of the things to consider is the location of these facilities
and it would be interesting to cross the challenged properties
with our US Golf Markets Strength Scorecard (see the Market
Focus section and Jim's article for more detail) to see if there's
a correlation between weaker markets and properties that aren't
moving (we'll bet there is, maybe not linearly).
In this monthly section we focus only on green grass facilities
but virtual golf continues expand and franchises are sprouting up
with one of the latest in Chandler, AZ (Phoenix market) called
Golf's landscape changes
Course
Event
Saint John's
Golf Club-The
Cardinal
Open/Re-open
DMA
Detroit MI
Stinger's Golf Club which features 6 Golfzon TwoVision simulator
bays, a putting green, pub fare and adult beverages (full disclosure,
Golfzon is a Pellucid client but we weren't paid for this
mention). Founder Tyler Wilson sees Stinger's mission as creating
" an inexpensive, non-intimidating golf experience accessible
to all our guests year-round " adding that " we're excited to build a
new community of golfers around Stinger's Golf Club. " Maybe
somewhere in there as well there might be some outreach to the
most proximate courses for some cross-promotion?
Finally this month, colleague Harvey Silverman and Pellucid
have been following the ongoing, unending saga called
Ahwatukee in the Phoenix metro market. For those catching
up on the story, the course was closed back in...2016 and it's
been the center of controversy, a mess for adjacent residents
and lined the pockets of many a lawyer ever since. Original
owner Wilson Gee successfully extracted himself from the
mess by selling to Shea Homes who wanted to develop the
land but later sold it to a local investors entity called The Edge.
The homeowners and interested locals (Club West Conservancy)
successfully gummed up Shea's attempt to develop the land
which contributed to the last sale but now, interestingly, wants
to tie Shea into its lawsuit to force the golf course to be restored
and re-opened. The latest chapter in the saga is the local judge
ruling on whether Shea should be involved or whether it's just
the Conservancy vs. The Edge. The Conservancy is using a
fairly liberal and interesting approach to homeowner's rights
saying that adjacent homesites paid lot premiums (really, that's
some binding stipulation that the golf course can't be sold or
redeveloped?). It also invokes in the CC&Rs a statement that
says " The golf course property and all portions thereof shall be
used exclusively as a golf course... The use of the golf course
property other than for said purposes during such time shall
be prohibited. " That sounds like to us, not that it will be a golf
course in perpetuity but that, as long as it's a golf course, it can't
be used for, say, outdoor concerts a tough mudder or alternative
activities. We'll see what the judge says first about who has to
defend against this and then, in another couple of years, they'll
get down to the final decision on whether it has to be restored
and re-opened as a golf course or not. Jim will be retired by
then...
Type/Holes Summary
PUB/25
Sold in Aug '21 by Archdiocese of Detroit (guess
where that money is going?) to Pulte Family
Charitable Foundation (trust). Changing legacy
27 hole config. to 18 hole championship course
(Cardinal) + Par 3/7-hole course (Little Cardinal)
and 18 hole, natural grass putting course
(Cardinal Putting Course, everything's coming
up cardinals!). " We want to be the Disney World
of Michigan! " (go big or go home!). All courses
debuted Jun '24, 100% of profits go to charity
10 The Pellucid PersPecTive
July 2024
The Pellucid Perspective - July 2024

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