Featured Golf News
Arizona Courses Suffering
While perhaps not as bad as some other areas in the U.S., namely Michigan, golf courses in Arizona - one of the nation's prime winter retreats - are hurting. Typical of major golf destinations throughout the U.S., about a dozen courses in the state have gone through foreclosure or bankruptcy proceedings since 2008, and many others are for sale.
Roger Garrett of Phoenix-based Insight Land & Investments said the problems stem from several factors: tourism is down, fewer locals are playing, water and labor costs have increased, and competition from a plethora of courses in the state has forced course owners to lower membership fees and greens fees, while some private clubs are now opening to the pubic.
Also hurting the industry is that the three lenders which once provided the bulk of financing for golf courses - GE Capital, Textron Financial Corp. and Capmark Financial Group Inc. - "have all three closed their doors" to buyers, Garrett told reporter Craig Anderson of the Arizona Republic. According to Garrett, golf courses have been placed on these lenders' "toxic-asset list," adding they won't consider lending money for a golf property under any circumstances.
While the course owners themselves are hurting, local golfers are enjoying bargain rates at once-high-end or private facilities. Richard Kufner of Phoenix recently played a round at the Arizona Biltmore, buying discounted greens fees for $55 each on the internet. Two years ago, the fees would have been at least twice as high, Kufner told Anderson. "The fact that I can play the Biltmore for $55 in December, it blows my mind," Kufner said.
The former appealing symbiosis of golf and homes is also souring in the desert, where many master-planned communities have sprouted up over the past 20-plus years. With the real-estate markets still in the recovery mode, some courses inside subdivisions may close.
The major appeal of living in a "golf community" is the "exclusivity," with residents only seeing other homeowners on their course. Now, with the new economic reality along with the other factors, that's changed.
Tony Kingsbaker, vice president of the Arizona Golf Association, told Anderson he believes outright closures will be rare in Arizona, but residents of high-end golf developments may see their courses open to the public, some of which already have.
"These people who bought into this high-end exclusive club, they're now having to play with 'Charlie Six-Pack,' " Kingsbaker said to Anderson.
Even though 2009 was the fourth consecutive year that the U.S. has seen more courses close than new ones open, residential developers around the nation are still building new courses. None, however, were built in Arizona in 2009.
"Without the continued use of golf as an amenity in real-estate developments - although that practice has certainly declined - there would be virtually no golf-course development at all," stated the fall 2009 report by the National Golf Foundation.
In a January 2005 Arizona Republic article, SunCor Golf vice president Tom Patrick, after evaluating diminishing rounds and green fee averages, warned: "Right now, we have about 60 courses too many," Patrick said. "It could take another 10 years to fill them."
Five years later, SunCor is getting out of the golf- and residential-development businesses, selling off many of its assets, including courses in Goodyear, Scottsdale, Sedona and Fountain Hills.
The problem, according to Garrett, is not limited to Arizona and the Southwest. "There are some predictions, and I think they're probably accurate, that we're going to have about 1,000 golf courses close around the country," he said to Garrett.
According to the AGA's Kingsbaker, private clubs will be having the most difficulty with their bottom lines. In many cases, there is a growing list of members who are in arrears on their monthly dues, he said, and another long list seeking to sell their memberships. "They thought their clientele was insulated from the bad economic times," he said of the private club developers, "but that's clearly not the case."
For Craig Anderson's complete article, visit http://www.azcentral.com/news/articles/2010/01/04/20100104biz-golf1231.html.