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| Tax Assessment Strategies Landmark Case? In an ongoing case in Wisconsin, the Village of Kohler has sued in The Wisconsin Court of Appeals asserting that it can tax real property on the value attributable to typical management. This could become a landmark case. For years, the conventional wisdom was that personal property (tangible and intangible, including management) was not taxable as real estate. Thus, various methods of allocating real and personal property have been utilized by appraisers and courts in estimating the value (and setting assessments) on golf courses and other similar properties. If Kohler Company is successful in rebutting this appeal by the Village, at least in Wisconsin, does it alter how golf courses and other going concern properties (like hotels, amusement parks and ski areas) are assessed? Will the decision have a broader (geographically) impact? Counsel for the Village, Nick Boerke of the law firm von Briesen & Roper states that; "The question is not whether taxes should be higher for well-managed versus not well-managed golf courses. The law is clear that you do not tax business value that is separate from and not transferable with the real estate. If Kohler Co.’s management and brand name are so superior that no other operator could match Blackwolf Run’s performance, there is likely non-taxable business value. But, Kohler Co. admits that many other courses are managed just as well as Blackwolf Run. The actual question is whether taxes should be reduced because of alleged business value associated with the notoriety and reputation of the golf course even though that notoriety and reputation is associated with the quality of the course itself, not the management of the course, and is therefore transferable with the real estate." Also, according to Boerke, "In Wisconsin it stems from the a statute that says “real property” includes “not only the land itself, but all buildings and improvements thereon, and all fixtures and rights and privileges appertaining thereto.” Wis. Stat sec. 70.03. As a result, case law has interpreted this to mean that if a value is “inextricably intertwined” and transferable with the real estate, it is taxable as part of the real estate." For those inclined, the appellant's brief can be found by clicking HERE. Having played a role in this case, Golf Property Analysts will be watching and reporting more on as it develops.
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GROWING THE GAME
Recently, I penned an article to be published soon on stability of clubs in a recovering economy. Just last week, the National Golf Foundation (NGF) published some interesting statistics on how golf is viewed by golfers and non-golfers alike. Given that our collective goal is to help grow the game (unless you agree with Mr. Trump that golf should be an aspirational sport), I'd like to focus on the problem areas as shown in the adjacent graph, shown in the NGF article, which include how welcoming we are to new players, the social environment, rules and dress codes. There appears to be considerable room for improvement. It seems as though we seek women and young people to take up the game but many clubs resist their culture of being "connected" (cell phones) and modern clothing (LuLu Lemon and Cargo shorts), for example. By all accounts, especially in the private club market, the cost of participation is rising more rapidly than the national inflation rate. The question is how do we preserve tradition which is so important to our game and encourage the new, younger players to our game so vital to its future, when the cost (of club membership) is unreachable for many and the culture conflicts with many modern customs? I don't profess to have all the answers, and acknowledge that each club has its own culture to consider. I only encourage that we keep our eyes open and do what's in the best interests of the future of the game so that more courses and clubs can become economically viable and avoid the disturbing trend of course closure, forced repositioning and general distress that has befallen so many clubs in recent years.
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| GPA SEEKING GOLF PROPERTY LISTINGS Long a leader in the valuation and analysis of golf course and club properties, Golf Property Analysts is expanding our brokerage practice, focusing on the Mid-Atlantic Region (NY, PA, NJ, DE, VA, MD) and Florida. If you're seeking to market for sale a golf course property, call or e-mail Larry Hirsh at 610-397-1818. All such inquiries will be maintained with strict confidence.
PREPARING TO SELL YOUR GOLF COURSE? Check out this BLOG post.
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| MEET WITH GPA PRESIDENT LARRY HIRSH If you'd like to meet with Larry, email us to set up a conference call or visit to see how we can help your club. HIRSH SPEAKS AT GOLF, INC. GPA President Larry Hirsh will be presenting on a panel at Golf Inc. in Palm Springs, CA on September 28th on the topic of "Time for a change, Reposition, Repurpose or Sell?". Click HERE for more information. CURRENT ASSIGNMENTS- VA - Appraisal of private club for tax assessment appeal
- NC - Appraisal of daily fee golf facility for litigation support, partial interest valuation
- PA - Appraisal of daily fee golf facility for bank financing
- NJ - Appraisal of private club for tax assessment analysis and possible appeal
- PA - Appraisal Review of daily fee golf facility for tax assessment appeal
- NJ - Brokerage of Private Club
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