In a Bloomberg News report, owners of golf course properties across the country are adding medical facilities, amphitheaters and even hovercraft operations to increase revenue.
According to a report in Bloomberg News, a growing number of golf course owners are embracing mixed-use real estate, adding everything from medical facilities to amphitheaters and hovercraft operations to increase revenue.
Woodmont Country Club in Tamarac, Fla., is adding conference space, stores, restaurants, a spa and a hotel as part of a planned revival, Bloomberg reported.
About $100 million will be spent on the revamp of the property, owner Mark Schmidt said. After years of negotiations with local authorities, he expects to receive approval this month for the planned Woodmont improvements, Bloomberg reported.
“I don’t think a single golf-course operator, unless you own a place like Pebble Beach, can make money,” said Schmidt, who bought Woodmont for about $3 million in 2004 and has seen membership dwindle to 230. “The cost of insurance, operations and maintenance is far too great. Multisourcing and redeveloping to include hospitality and other uses is the only way to go.”
After a prior redevelopment plan was rejected by the municipal government, Schmidt is now cutting the golf course to 27 holes from 36. He and his development partners plan to construct 152 single-family residences, a new clubhouse and swimming pool, 14 tennis courts, shops and 5,000 sq. ft. of meeting rooms, plus a potential mid-scale hotel, Bloomberg reported.
Golf course owners facing a dropoff in traditional revenue from player fees are trying to generate demand from younger users and cater to families, said Lesley Deutch, a Boca Raton, Florida-based senior vice president at John Burns Real Estate Consulting. Adding amenities such as athletic facilities and yoga studios creates a broader audience, she said.
“The recession caused a rethinking of the value proposition for golf-course owners,” said Steven Ekovich, vice president of investments at Marcus & Millichap Inc.’s National Golf & Resort Properties Group. “Because of the millennial generation and Generation X and Y, you have all these varied interests. So you have to offer more things.”
At Windy Knoll Golf Club in Springfield, Ohio, owner Nick Tiller and his cousin Pete Duffey, the property’s managing director, added hovercrafts last year to take people across the golf course and from tee to green. The idea was inspired by a product that was built for Oakley Inc. and two-time Masters Tournament winner Bubba Watson, who is sponsored by the company, Bloomberg reported.
C&RB reported on Windy Knoll’s addition last year (“Golf Cars Get Tech Makeover“).
Tiller and Duffey also expanded banquet facilities, used to attract weddings and other events, and added a new full-service, year-round restaurant. The duo, first-time golf-course operators, bought the property out of receivership in May 2012 for about $1.4 million and are spending $1 million on improvements, Bloomberg reported.
“The hovercrafts are not really viable for everyday use because they are kind of hard to control—we’ve already had a few minor accidents—but it’s garnered great interest from a wide audience, and it’s a way to promote our golf course,” Duffey said. “If all of these investments start to cash-flow well for us, we definitely are in the market to add other opportunities to create demand and to generate additional revenues.”
The course is close to breaking even and probably will be profitable by next year “because of all the additions we’ve made,” Duffey told Bloomberg.
Konstantinos Vasilakopoulos bought Mountain Branch, a golf course 20 miles northeast of downtown Baltimore, out of receivership for $3.6 million in mid-2012. He plans to expand the food and beverage service at the course, is building a concert amphitheater with outdoor seating for as many as 3,000 people, and is considering developing a winery at the 270-acre property. The additions will cost about $800,000, Bloomberg reported.
“We want to increase our visibility and revenue stream,” property manager Bill Vasilakopoulos said told Bloomberg. “When we got the property, much of the restaurant and golf barely broke even. Our background is in food and beverage, and when we saw the numbers we saw a whole lot of room for improvement.”
Hotel accommodations and a spa may also be added to cater to the property’s growing wedding business, he said. The brothers plan to increase awareness of the golf club and its amenities through a 5-kilometer run across the property this year, Bloomberg reported.
In some parts of the U.S., using golf clubs exclusively for golf remains a viable option, said Deutch. “The pure golf focus is mostly on the west coast of Florida, where you have a very large majority of retirees,” she said. “Golf here is still very appealing and still in high demand. So you can still make a case to build an exclusive golf course community if you are in the right area.”
Schmidt, the owner of Woodmont in Florida, said that while buying the property “wasn’t the most intelligent business decision” he’s made, things are picking up at the club, which was pummeled in 2004 and 2005 by three hurricanes that uprooted trees. This year he raised his prices for a round of golf by about 8 percent from 2013, Bloomberg reported.
Homes at Woodmont will go for $300,000 to $600,000. Under the current plan, residents will be required to join the golf club. Schmidt said residential development may sell out within three years, if not sooner, given strong interest from potential buyers. He expects membership to more than double once the homes are completed and sold, Bloomberg reported.
“The days of just having a golf course and an 8,000-sq. ft. clubhouse are past,” Schmidt said. “My staff did a lot to market and explain to the community what benefits our extensive redevelopment of the club would have. Now, finally, I feel the recovery is under way.”
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