The unsolicited buyout offer of about $120 million (Canadian) will be considered by members of the exclusive, male-only, 44-year-old private club, with a George and Tom Fazio-designed golf course that is considered one of the top 50 in the world, after it closes for the season. Acceptance is not seen as a given because of members’ wealth and passion for golf, but the offer is viewed as the latest example of how urban sprawl is affecting Canada’s club business. “Redevelopment of The National would leave a scar on every golf course in [the country],” said the club’s Executive Director. “If the National is vulnerable, who isn’t?”
The National Golf Club of Canada, a male-only private course in Woodbridge, Ont., Canada, a Toronto suburb, recently drew an unsolicited buyout offer for about $120 million (Canadian) from a real-estate developer, The Globe and Mail of Toronto reported.
The property is owned by its 468 members and its golf course, designed by George and Tom Fazio, consistently ranks as one of the two or three best and toughest rounds in the country, and among the world’s top 50 courses, The Globe and Mail reported. After the 44-year-old club closes for the winter, members will make a decision on its future. If they decide to sell, The National will join a growing list of urban golf courses being bulldozed to make way for high-end homes.
“Redevelopment of The National would leave a scar on every golf course in [Canada],” Rob Roxborough, the National Golf Club’s Executive Director, told The Globe and Mail. “If the National is vulnerable, who isn’t?”
The debate playing out at the limestone-clad clubhouse and ravine-riven fairways of what golfers call “The Nash,” and what the club bills as “Canada’s best private golf club” on its website, is part of a larger conversation around the relevance of golf for the next generation, particularly for affluent players who can afford to join a private country club, The Globe and Mail reported. The club’s struggle also captures what demand for single-family homes and parkland is doing to public and private courses across Canada.
The most recent statistics from Golf Canada, the sport’s national governing body, show that 51 courses shut down in the country between 2015 and 2018, including 19 closures in Ontario, The Globe and Mail reported. In the same period, 22 new courses were either launched or under construction. In other words, two clubs were closing for every new track that opened.
“Golf has never been in a healthier place in Canada,” in terms of the number of players and their engagement in the game, Laurence Applebaum, Chief Executive Officer of Golf Canada, told The Globe and Mail. “But there are two sides to the coin. Golf courses have become part of the story of a robust real-estate market, particularly in the greater Toronto region.”
There are about 2,300 golf courses in Canada—only the United States has more—and none are harder to navigate than the National, The Globe and Mail reported. Its 18 holes feature narrow fairways, ponds, streams and greens guarded by cleverly placed bunkers. Pros such as Mike Weir, Nick Faldo and Lee Trevino have sung The National’s praises after playing tournaments, and legions of golf writers have complimented the course’s ability to humble even the best players.
But the difficulty of the course and its prime location are now contributing to its uncertain future, The Globe and Mail reported. When it opened in 1974, it was well north of Toronto’s suburbs. But over more than four decades, the city swallowed the club. Large homes now surround the course, while shopping malls, the Wonderland amusement park and a subway station are minutes away.
Additionally, in recent years an increasing number of National members decided to unload their equity stakes in the club, The Globe and Mail reported, in part because aging golfers often find the course too challenging to play enjoyably. Not enough new members stepped forward and there are currently more sellers of memberships than buyers, according to Roxborough, who declined to comment on the exact numbers.
Several sources at The National, whom The Globe And Mail granted confidentiality to because they were not authorized to speak for the club, said dozens of members are currently trying to sell their equity stakes, which typically change hands for around $40,000. Annual dues at the club are about $12,000.
That dynamic opened the door to an offer this summer from an opportunistic developer, The Globe and Mail reported. Roxborough declined to identify the bidder, but said that when the club’s Board of Directors received the offer, The National promptly hired a real estate appraiser to value the property. The consultant’s report is expected by December and will be shared with members, who will then decide whether they want to sell.
The club’s men-only membership policy is not a factor in the debate over The National’s future, according to the club’s executives and a number of members, The Globe and Mail reported. “The issue here is urban sprawl,” said Roxborough.
A sense of what may be coming at The National can be gained by looking at what played out five years ago at the member-owned York Downs Golf and Country Club in nearby Markham, Ont., The Globe and Mail reported. A developer made an initial $325 million (Canadian) bid for the 27-hole course, and the club’s Board opted to put the property up for auction.
York Downs G&CC eventually sold for $412 million (Canadian), which worked out to approximately $200,000 per member—a decent payday for owners who typically paid $30,000 or less for their equity shares, The Globe and Mail reported. And in 2020, builders are scheduled to break ground on the first of 2,400 planned detached homes and townhouses on the site.
The initial offer for The National valued the club at approximately $250,000 a member, The Globe and Mail reported. Real estate experts say if a significant portion of the course can be turned into residential lots—parts of the property are too hilly or wet to be suitable for homes—The National could be worth considerably more than that. Using the same value per acre that York Downs and other urban courses commanded, the National could be worth roughly $200 million (Canadian), or about $400,000 a member.
Over the past year, Beacon Hall Golf Club in Aurora, Ont., also received unsolicited offers from developers, in the $200 million (Canadian) range, The Globe and Mail reported. The club hired a team led by an arm of Toronto-Dominion Bank to value the property, and the appraisers reported back last week by mailing a valuation to the club’s 260 members, who are now weighing their options.
The Town of Oakville, Ont., is battling to stop Glen Abbey Golf Club from being transformed into mansions by Abbey owner and real estate developer Rai Sahi, a fight the politicians are expected eventually to lose, The Globe and Mail reported. Other courses in the country that will soon be part of major cities’ suburbs include Harvest Hills in Calgary, Kanata Golf and Country Club near Ottawa, and Copper Creek in Vaughan, Ont.
The future of publicly owned links in Canada is also up for debate, The Globe and Mail reported. In recent years, former Vancouver mayor Gregor Robertson and former Toronto city planner and candidate for mayor Jennifer Keesmaat recommended converting city-owned courses into parkland.
John D’Angelo has a unique perspective on The National’s future, The Globe and Mail reported. He’s a member of the club and an ardent golfer, but he’s also chief executive of HBNG Holborn Group, the real-estate company that controls a fund that recently bought a 45-hole course in Woodbridge, Ont. called The Country Club that was formerly known as the Board of Trade Golf Club.
“Unlike some clubs, members at The National play aggressively—it’s not uncommon for them to play four or five times a week,” D’Angelo told The Globe and Mail. And in his view, that passion for golf will underlie coming discussions on the club’s future, because most members of the club are wealthy enough that a potential windfall in the $250,000 to $400,000 range is unlikely to sway their decision.
However, the real-estate executive added, rising demand for land in the Toronto area, and limited supply, means deep-pocketed real estate companies will keep calling at The National and other urban-area country clubs. “These golf courses were built when there were no land pressures,” D’Angelo said. “Now, there is really no product available to developers of single-family homes.”
In the long term, the future of golf clubs will be determined by interest in the game, said D’Angelo, who has two children. “The dynamics of families are changing,” he said. “Not everyone gets up these days on Saturday morning and wants to take off all day to golf. There’s a younger generation with different priorities.”
Right now, roughly five million Canadians occasionally swing a 9-iron and 1.5 million qualify as ardent golfers, who play nine or more times each year, The Globe and Mail reported. That’s roughly 650 active golfers for each of the country’s courses, one of the highest ratios of clubs to golfers in the world.
But until recently, even the most active golfers were playing less often, The Globe and Mail reported. Seven years ago, a Canadian study by a group called the National Allied Golf Associations, or NAGA, concluded the game was “vulnerable,” as 38 per cent of golfers were playing fewer rounds each year, while just 14 per cent were hitting the links more frequently. “Time and money constrain the playing of the game; they do not drive the game,” the NAGA report said.
In recent years, Golf Canada’s Applebaum told The Globe and Mail, golf has experienced an resurgence in the country. The average number of rounds played each year stabilized and has started to rise, sparked in part by the success of Canadian professionals such as Brooke Henderson. The game is also attracting an increasing number of young players and immigrants to Canada.
“The old cliché was golf is pale, stale and male, and that’s just not the case. The game is inclusive,” Applebaum said. “If you look at faces on the first tee on most courses, you are likely to see the new face of Canada.”
At The National, the drama in coming months will be in the boardroom, not on the 18th hole, The Globe and Mail reported. The members, many of whom work in the real estate and financial industries, will decide whether one of the country’s best-known courses keeps holding high-stakes matches or gets converted into McMansions.
“I believe the members want to see this club continue to be their home for golf,” said Roxborough. “But the decision is theirs.”
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