October, 2018 - In this issue

GOLF, INC. 2018

WRAP UP

Last week, I was privileged to attend and participate in two presentations at the Golf, Inc. conference in San Diego. As a consultant/appraiser, I’m always interested to hear the thoughts and comments of those in roles with direct consumer contact in the golf and club industry. I came away this year (maybe even a bit more than in past years) with two words in my head – FUN and EXPERIENCE.

As one lucky enough to grow up at a private club, I’ve always been somewhat puzzled by why those fortunate enough to frequent (in most cases) the best golf has to offer did so in an environment laden with rules and restrictions that often seem to interfere with the “fun factor”. Many of the private clubs I’ve observed through the years strove to make the course tougher, the rules more restrictive and the atmosphere more subdued. As we are often retained by clubs in some form of distress, one question I always ask addresses the age and diversity of the membership.

PREPARING FOR AN APPRAISAL

So, you need to have your club appraised. It might be for financing, real estate tax assessment, sale, purchase or estate tax purposes. Maybe there’s a dispute or maybe ownership simply needs the information to make decisions. Often appraisals are needed quickly and one of most common factors in delays is getting the appraiser the information needed.

After selecting a qualified and (golf) experienced appraisal firm, a club can expedite the process and contribute to the quality and accuracy of the valuation by being prepared. To start with, have available, in presentable form, the following items:

☒ Financial Statements (3 years w/ detail)
☒Balance Sheet
☒Current Budget
☒Membership Census by Zip Code
☒Membership Documents
☒Rounds Analysis by Zip Code
☒Real Estate Tax Bills
☒Deed or Legal Description
☒Property Survey/Site Plan
☒Building Floor Plans
☒Golf Course Routing Map
☒Prior Appraisal Report on Property
☒Cost Estimates for any planned capital improvements/repairs
☒Golf Course Maintenance Plan
☒Equipment Schedule
☒Lease Summary
☒Scorecard
☒Insurance Report

WHY DO GOLF COURSES CLOSE?

I’ve always been intrigued by golf course and club closures. According to the National Golf Foundation, nearly 1,200 courses have closed in the past 10 years (7.4% of the supply) and more than 700 (4.7%) in the past 5 years. Certainly, as someone who analyzes golf courses and clubs I understand market dynamics and the economics of the golf course and club business. Why this happens is intriguing. However, this topic is often one that is difficult to articulate in a general sense, not only because circumstances vary from club to club but also because it seems as though everyone has a theory.

In preparation for an upcoming presentation at the Golf, Inc. Strategies Summit in San Diego, my fellow panelist Mark Mattingly of Landscapes Unlimited hit the nail on the head for at least one reason when raising the following question: Does the business plan support the budget or the budget support the business plan?

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