Construction blitz

During the Blitz, Prime Minister Winston Churchill famously advised his fellow Britons, “When you’re going through hell … keep going.” The same advice has applied for golf course builders since 2007, when construction slowed from the previous record-setting decade. During golf’s blitz, most course builders soldiered onward, adapting to new market conditions and tepid demand. What‘s next for course construction? For answers, the wisdom of recent presidents of the Golf Course Builders Association of America is insightful.
 

The Best of Times

After the National Golf Foundation produced findings in the late 1980s suggesting that golf demand was sufficient to sustain 365 new golf courses per year – a golf course a day – high net worth individuals, homebuilders, fraternity brothers, land developers and darned near anyone who ever wanted to own a golf course wanted to build one.

The exuberance for new golf courses led to a boom in construction like never before. NGF data indicates that more than 3,400 golf courses were built between 1995 and 2005. Then the housing market went cold and the oversupply of golf in most markets revealed a serious market imbalance. All of a sudden, it wasn’t a great time to be a course builder.

The downturn that impacted course development so dramatically forced many builders to adapt and reinvent themselves. They became smaller and more nimble. Some diversified beyond golf – into sports fields and playgrounds. Today, as many developers look to less capital-demanding amenities for master-planned communities, most builders are keeping their lights on through renovations and remodeling.

As the housing cycle built momentum over the past year, new golf projects have emerged. But the pace is a drip compared to last cycle’s flood.
 

Design, Build with End in Mind

Tommy Sasser, who has built more than 100 courses with Jack Nicklaus and others, believes golf construction will become an even more detailed endeavor as environmental limitations, zoning and cost restraints impact construction. “Design and construction will have to develop ways and means to decrease or at least stabilize the cost of construction and the impact on long term maintenance cost,” he says.

Designers and builders need to bring courses online with the end result in mind. “The developer wants to sell real estate; the membership wants a facility for recreation, and a place to enjoy community living at a price that won’t break the bank,” Sasser says. “Developers eventually turn clubs over to a membership. So they need to design and construct a facility that makes that easier.”
 

Limited Budgets for ‘Cool’

Tom Shapland of Wadsworth Golf Construction was GCBAA president during the toughest years of the recession. He offers these insights: “Do not overreach.. When someone says, ‘Wouldn’t it be cool if we…,’ remind yourself that your business plan did not include large sums of money for cool. And, third, borrow enough to pay for the project plus a contingency plus the interest on the loan. Everyone needs to be paid and decisions critical to the success of the project should not be made on a cash-flow basis.”

Why does anyone develop golf projects in today’s market? The answer remains the same as it has for decades: Only big views of water and mountains rival golf as a source of incremental revenue from lot premiums. In addition, golf serves as a means to meet permitting and planning requirements for the open-space and community-drainage stipulations with which developers must reckon.

From our vantage point, we see the next generation of courses characterized by the following:

• Efficient and sustainable designs with reduced maintenance costs.
• Changes in irrigation planning and bunker design and shaping that reduce construction costs.
• Grasses that require less irrigation, drainage and mowing.
• Courses that address a wider audience of players, especially women and beginners.

Courses will be built – although not at the pace as the ‘90s. Nor will they resemble immaculate landscapes. That’s just one of the ways the game is adapting to a changing marketplace.

Henry DeLozier is a principal in the Global Golf Advisors consultancy. DeLozier joined Global Golf Advisors in 2008 after nine years as the vice president of golf for Pulte Homes. He is a past president of the National Golf Course Owners Association’s board of directors and serves on the PGA of America’s Employers Advisory Council.