Sunday, January 15, 2017

The Week That Was, january 15, 2017

     It appears that ClubCorp’s top executives and board members have been listening to the shareholder complaints that were made public last year.
     The Dallas, Texas-based course owner and operator, the self-described “World Leader in Private Clubs,” has taken steps that could eventually lead to a sale. It’s “in the early stages of an auction process that has attracted the interest of potential buyers,” and it’s organized a committee that will study options that might “further enhance shareholder value.”
     Last April, Kerrisdale Capital Management drew attention to ClubCorp’s “billion-dollar debt burden,” its annual losses, the lack of membership growth at its “same-store” properties, and its weak profit margins, and the Street recommended that investors sell their shares in the company. A few months later, a disgruntled minority shareholder, FrontFour Capital Group LLC, demanded that ClubCorp maximize its value by selling all or at least some of its golf properties and to pursue “any and all strategic alternatives, including an outright sale of the company.”
     ClubCorp has come a long way since Bob Dedman ran it however he pleased. As a public company, it’s obligated to respond to pressures brought by shareholders whose only concern is maximizing the return on their investments. It may appear that Eric Affeldt and his closest associates are still making golf-related decisions, but in fact they’re now in the business of delivering value to investors. If they fail, they’ll be replaced.
     KSL Capital, a private equity firm, acquired ClubCorp for in 2006, reportedly for $1.8 billion, and took the company public in 2013. The company will probably be sold to another private-equity firm, but don’t overlook the possibility of an overseas group buying it. ClubCorp would be a very attractive target to a Chinese conglomerate looking to carve out a place in the U.S. golf market.

     A Japanese billionaire is intrigued by the possibilities for golf development in the Philippines.
     Late last year, Kazuo Okada, the chairman of Tokyo-based Universal Entertainment Corporation, opened the largest casino in the Philippines, the Okada Manila. Okada has made a fortune by manufacturing and selling slot and pachinko machines, arcade games, and video games – he has a net worth of $2.3 billion, according to Forbes – and he views the Okada Manila, which features a nearly 1,000-room hotel and a man-made beach, as the base of Philippine operations that will eventually include resorts with golf courses.
     Okada is planning to develop his future properties with Antonio “Tonyboy” Cojuangco, a partner in Okada Manila and a cousin of Benigno Aquino, Jr., the Philippines’ president.
     “Mr. Okada wants [a] total entertainment package for the whole family,” Cojuangco told the Manila Standard. “So, aside from [the] hotel and its features, he is also going to be developing resorts in islands, golf courses in the country.”
     Okada, who once held a major stake in Steve Wynn’s casino company, reportedly has a particular interest in two locations: Palawan, an island province, and Davao, in the southeastern part of Mindanao Island. Palawan may hold special appeal for him, for it’s said to be “every beach lover’s dream destination,” and last year Travel + Leisure named it “the best island in the world.”

     The original version of the preceding post first appeared in the August 2016 issue of the World Edition of the Golf Course Report.

     A former military-owned golf course in a nation known for human-rights abuses is being transformed into an international-standard layout that its new owners believe is “destined to become the ‘must-play’ course in Myanmar.”
     Dagon Golf Club, in Yangon, Myanmar, expects to complete its makeover this spring, and the people involved in giving it a fresh face have boldly raised expectations. Phil Ryan of Pacific Coast Design, the course’s architect, says the 18-hole track will “surely rank as one of the region’s best golf courses,” and Justin Strachan of Absolute Golf Services, the course’s operator, thinks it’ll “set new standards for golf” in a nation that’s become “the perfect location for a top-level course.”
     Jewellery Luck Group of Companies has set out to make Dagon the centerpiece of Dagon Golf City, a community that will feature villas, apartments, a hotel, and a retail/commercial area. The golf city is an example of the kind of growth Yangon has seen since nations around the world began lifting economic sanctions that were imposed to protest Myanmar’s corrupt and repressive military rule. Myanmar now has a fast-growing economy and a growing taste for Western luxuries, but it remains a violent nation with persistent ethnic unrest that doesn’t figure to end anytime soon.
     If Dagon lives up to its billing, it’ll vie for prominence with Yangon’s Pun Hlaing Golf Club, a venue with a tournament-worthy, Gary Player-designed course that Golf Digest currently ranks as Myanmar’s best.

Sunday, January 8, 2017

The Week That Was, january 8, 2017

     By now, you’ve probably heard that Jack Nicklaus has designed a golf course in Turkmenistan, a nation that most people couldn’t find on a map if their lives depended on it. (Hint: It’s a former Soviet satellite.) Needless to say, Turkmenistan has virtually no home-grown golfers. But money talks, and the world’s best-known “signature” architect has reportedly made five visits, with more to come.
     No surprise here, but the course, at Ashgabat Golf Club, will be the nation’s first. It’s scheduled to open this summer.
     Nicklaus was selected by Gurbanguly “Spellcheck” Berdymukhamedov, Turkmenistan’s president for life. Berdimuhamedov rules an energy-rich, increasingly wealthy nation, and he’s eager to capitalize on his nation’s tourism potential. In fact, the course at Ashgabat was no one-shot deal. Nicklaus has agreed to design at least one more course in Turkmenistan, at an emerging resort along the Caspian Sea.
     Make no mistake, though: Nicklaus is cashing checks from a tyrant. Berdimuhamedov’s corrupt regime has drawn comparisons to those in North Korea, Myanmar, Sudan, Syria, and other unsavory nations. Turkmenistan offers no freedom of religion, no freedom of the press, and really, no freedom of anything. The BBC calls it “one of the most repressive states in the world,” with a human rights record that’s “one of the worst of the worst.”
     Berdimuhamedov knows that he can’t make Turkmenistan a vacation destination until he polishes its public image, and that’s where Nicklaus, with his spotless reputation, comes in. Golf’s most effective spokesman is now Berdimuhamedov’s best-known publicist, not to mention a trigger for economic development. Ashgabat Golf Club will spark more growth in the capital city, and the course on the Caspian Sea will help to create what Turkmenistan’s tourism officials hope will be “the Costa Del Sol of Central Asia.”
     Golf-course architects occasionally work in some dreadful places and for reprehensible people, but jeez, working for Berdimuhamedov is like working for Darth Vader. He’s one of the worst people in the entire universe. And Nicklaus’ commitment to his golf ambitions is tacitly an endorsement of policies contrary to fundamental American values.
     Nicklaus is not naïve about politics or business, and he most certainly appreciates the value of his name. He has no need to go over to the Dark Side. He’s wealthy beyond belief, and he’s designed so many golf courses in so many countries that he doesn’t need a few in a remote dictatorship to cement his legacy. Why he’s chosen to associate with a despot is a mystery.
     When Jennifer Lopez entertained at one of Berdimuhamedov’s birthday parties, she got lots of criticism. The heat should be on Nicklaus as well.

     Some information in the preceding post originally appeared in the January 2015 and May 2013 issues of the World Edition of the Golf Course Report.

Friday, January 6, 2017

Desolation Row, january 6, 2017

     Scottsdale, Arizona. The resort made famous by Charlie Keating wants to lop nine holes off its 27-hole golf complex. Keating, who played a major role in bringing down the U.S. savings & loan industry in the 1980s, opened the Phoenician in 1988, a year before he was indicted, hoping the 315-acre spread would be “the eighth wonder of the world.” (After the federal government seized the property, it was nicknamed “Club Fed.”) The Phoenician has passed through many hands in the years since, and while its current owners may believe that their golf complex, co-designed by Ted Robinson and Homer Flint, “inspires your spirit of adventure,” they also believe it’s “the perfect time to come in and build additional [housing] units.” They’ve petitioned for a rezoning that will enable them to do so. No matter things turn out, the Phoenician will forever live in infamy.

     White Sands Missile Range, New Mexico. The only 11-hole golf course in the U.S. Army’s portfolio has bitten the dust. The course, designed by military personnel, opened in 1962. “It was good while it lasted,” the track’s manager told the Alamogordo Daily News. The course’s claim to fame: Rich Beem learned to play golf there.

     Petaluma, California. Citing the “declining popularity” of golf, along with the cost of labor and other expenses, Richard Coombs has drawn the curtains on Adobe Creek Golf Club. The 100-acre course, said to be “a favorite of Northern California golfers for the past 25 years,” had been designed by Robert Trent Jones, Jr., with assistance from Kyle Phillips. Coombs, a developer, purchased it in 2011, after it had been placed in bankruptcy protection. He appears to be intent on developing the property, although the home owners in the accompanying community believe the course is supposed to remain in place until 2039. Coombs is a member of investment groups that own two other golf properties in Sonoma County, Rooster Run Golf Club and Windsor Golf Club.

     Sharpes, Florida. A big home builder has laid a claim on Sam’s Executive Golf Course, outside Orlando, and it’s secured the zoning change that will lead to an eventual purchase. D. R. Horton plans to build 224 single-family houses on the 56-acre property, a golf course since 1966. A local elected official called the forthcoming conversion “kind of a win-win,” noting that “everybody seems to embrace” the idea. There’s a little bit of unknown history here, though, because the 18-hole layout once operated as Sam Snead Executive Golf Course.

     Kent, Ohio. Kent State University has pulled the plug on its 18-hole golf course, a track that was said to offer “some of the most affordable golf in northeast Ohio.” In a press release, the university confessed that it “could not reverse a five-year trend of declining revenues and mounting operating losses.” The course, described as “a traditional Scottish-links design that is bisected by a railroad track,” had operated since the late 1920s. The university has owned it since 1996.

     Grand Forks, North Dakota. After making what appears to be a half-hearted attempt to find a private-sector operator, the University of North Dakota has turned out the lights at Ray Richards Golf Course. The school claims that the decision hinged on a philosophical issue. “We’ve wondered, we’ve questioned over the past few years,” a spokesperson said to the Grand Forks Herald, “should we be in the golf course business?” Now we know the answer to that question. It’s possible that other factors were also involved, however, because the university also believes that the 68-acre track is “a prime piece of property that has value.” The nine-hole course, designed by Robert Bruce Harris, had operated since the late 1960s. It was named after the landowner who donated the property.

     Liberty, Missouri. At the end of last year, William Jewell College closed the golf course it acquired in the early 1990s. In a press release, it said the decision to close Cardinal Hill Golf Course had been “anticipated for some time” because “operating our golf course has not been a profitable endeavor.” The 18-hole, Chet Mendenhall-designed layout made its debut in the late 1960s. Funny thing, though: The course’s private-sector manager reportedly declined to comment on the college’s decision.

     Waterloo, South Carolina. Don Salyers has closed Rolling S Golf Club and hopes to find a buyer. “Our business dropped off,” his wife told the Greenwood Index-Journal. “People are watching their money, I would say.” Rolling S, a 160-acre property, opened in 1969. According to the club’s website, Salyers has owned it since 2000.

     Poughkeepsie, New York. Time has run out on Dutchess Golf Club, one of the nation’s oldest golf properties. (The club hadn’t posted a tweet since early 2014, a sure sign of trouble.) Dutchess had operated for 120 years and once proudly counted Franklin Delano Roosevelt among its members, but Anthony Bacchi stuck a fork in it just before Christmas. He hasn’t said why, but the cynic in me thinks it’s because he didn’t want to foot the bill for a New Year’s Eve party. A more convincing explanation comes from the Poughkeepsie Journal, which talked with a member and subsequently blamed the club’s demise on “decreasing membership and increasing prices.” Bacchi bought Dutchess from a local bank in late 2015. He hasn’t completely abandoned the golf business, as he still owns Lazy Swan Golf & Country Club in Saugerties, New York.

Sunday, January 1, 2017

The Year That Was, january 1, 2017

     The top stories of 2016, in no particular order

     Months before he became the President Elect, Donald Trump received a vote of no confidence from the R&A. It came in February, when, in what amounted to an act of self-protection, the golf industry’s most self-righteous institutional power passed on an opportunity to award the Open Championship to Trump Turnberry. The decision was a slap in the face for Trump, who’d acquired the historic Scottish resort in part because it’s long held a spot in the Open rotation and figured to help him realize his paramount golf dream, which is to host a major championship at one of his golf properties. Of course, decisions can be reversed, and Trump Turnberry will likely get back into the rotation in 2022.

     An affiliate of HNA Group, one of the high flyers in China’s golf business, purchased a high-profile golf portfolio in greater Seattle, Washington. In October, the company reportedly paid $137.5 million for eight properties assembled by Oki Golf, a collection that includes Golf Club at Hawks Prairie in Lacey, Golf Club at Newcastle in Newcastle, Indian Summer Golf & Country Club in Olympia, and Washington National Golf Club in Auburn. HNA Group is primarily an aviation company, but it owns seven golf properties on Hainan Island and at least four others elsewhere in the People’s Republic. And though it reportedly views Seattle as “a gateway into the North American golf market,” it’s already established a presence in U.S. golf operations. In recent years it’s acquired Nicklaus Club Monterey (formerly Pasadera Country Club) in Monterey, California and Somers Pointe Golf Club in Somers, New York. It wouldn’t be a surprise if the company eventually found other buying opportunities on our shores.

     Gil Hanse’s golf course in Rio de Janeiro may be a critical success, but it isn’t doing much to grow the game in Brazil. In fact, a few weeks ago Agence France Presse suggested that the track has such serious money troubles that it may soon go out of business. The gory details: The course, which hosted the golf competition for the 2016 Olympics, attracts only 40 customers on an average day, and its operators, who aren’t getting paid, are “set to pull out.” This news should come as no surprise, seeing as how Rio, a city of 6 million, has, according to Golf magazine, just 1,500 golfers.

     Phil Mickelson, a golf superstar and a frequent gambler, had a couple of uncomfortable brushes with the law. In May, the Securities & Exchange Commission determined that he’d been “unjustly enriched,” with nearly $1 million in “ill-gotten gains,” in connection with a stock-trading scheme. As the story goes, some time ago Mickelson became indebted to an acquaintance, Billy Walters, an inveterate gambler and a longtime target of SEC investigators. Walters, acting on a tip from an insider, reportedly encouraged Mickelson to buy some stock in a company called Dean Foods, and the “investment” paid off in spades. Mickelson was, according to the SEC, able to “pay off his debts with the proceeds of the trade.” Then, just weeks after he’d agreed to pay the fines related to the case, Mickelson was linked to a money-laundering scheme that had been designed to conceal what court documents describe as “losing wagers.” The scheme involved a Mickelson associate who’d pleaded guilty to transferring $2.75 million between bank accounts “virtually as a personal favor to an individual who did not wish his wagering activity to become public.” Mickelson wasn’t mentioned by name, but Bloomberg reported that he was the individual whose identity was being protected. Thanks to loopholes in securities laws, however, neither of these incidents led to a criminal charge.

     Arnold Palmer, who disdained crowns but was nonetheless known as the King, died in September. It’s impossible to over-estimate the impact he had on sports in general and golf in particular. He was a ferocious competitor, a coveted corporate spokesman, a founder of “signature” golf, the face of his sport for more than a half-century, and, above all, the most approachable superstar who ever lived. Many golfers become famous. Palmer became beloved, in large part because he always remained true to his roots. Unlike so many others, he managed to harness the power of fame without being consumed by it. Three other course architects died in 2016 – Christy O’Connor, Bob Cupp, and Gene Hamm – all of them members of the generation of designers who defined high-quality golf architecture in the late 20th and early 21st centuries. Finally, in November, another golf-industry legend passed: Peggy Kirk Bell, an accomplished golfer, a renowned golf instructor, a pioneer for women’s golf, a tireless ambassador for the sport, and the owner of two popular, well-regarded golf properties in the Pinehurst area, Pine Needles Lodge & Golf Club and Mid Pines Inn & Golf Club. No wonder a commentator once called her “the female Arnold Palmer.”

     In golf’s battle of the sexes, another domino fell in July, when the members of Royal Troon, a historic enclave in South Ayrshire, Scotland, voted to allow women into their club. The decision came after two other venues in the rotation for the Open Championship – the Royal & Ancient Golf Club of St. Andrews in 2014 and Royal St. George’s Golf Club in 2015 – similarly chose to end their discriminatory membership policies. “I think this means that Royal Troon Golf Club is reflecting the society in which we exist in the 21st century,” the club’s captain told the New York Times. More importantly, the vote meant that Royal Troon wouldn’t suffer the fate of Muirfield, which was stripped of its cherished spot in the rotation when its members voted to remain true to their exclusionary principles. It’s worth noting that Muirfield’s members have come to regret their decision and plan to hold another vote on their woman problem later this month. The outcome will likely be different.

     Last summer Peter Thomson, one of Australia’s most prolific “signature” architects, retired from the design business. He cited his age – he turned 87 last year – and “declining health” as the reasons for his retirement. Thomson may not be very well-known in the United States, but he’s one of the greatest golfers of all time. He reportedly had 89 victories as a professional, and beginning in 1954 he won the Open Championship three consecutive times, a nearly impossible feat, and then he won it again in 1958 and in 1965. Thompson began to design golf courses in the early 1960s, and over the years he and various associates designed, redesigned, or renovated more than 200 courses, most of them in Australia, Asia, and Southeast Asia. The firm’s work isn’t universally admired, but it’s had a hand in producing at least 10 courses that Golf Digest ranks among its top 100 in Australia. Thomson’s retirement ought to remind us that other aging “signature” architects – Jack Nicklaus, Pete Dye, Gary Player, Rees Jones, and Robert Trent Jones, Jr. notable among them – will also be leaving the business before long. All of them thrived during a remarkable era when golf development, propelled in large part by a parade of former professional stars, spread across the planet. Collectively, they had a tremendous influence on public perceptions of golf. Each in his own way is an industry titan.

     For the first time, a golf course in Africa won a seal of approval from the British PGA, as the group identified Vipingo Ridge, the centerpiece of a 2,500-acre community in suburban Mombasa, Kenya, as a worthy destination for its members. Such recognition may not mean much to us in the United States, but it’s a significant milestone in Africa. With the PGA’s branding, Vipingo Ridge’s owners will be able to attract more golf travelers, host high-prestige tournaments, charge more for their real estate, and perhaps even break ground on their long-overdue second course. A golf commentator wondered whether the award might spark “a new phase in Kenya’s golfing scene.” The rest of us are wondering how much golf development it sparks in other African nations.

     All the ducks aren’t yet lined up in their respective rows, but it appears that Chicago on the cusp of becoming a bona-fide destination for elite professional tournaments. Mark Rolfing, a commentator for the Golf Channel, is twisting arms in an attempt to create a 27-hole golf complex – a world-class 18-hole course and an easy-to-play nine-hole layout – along the Windy City’s lakefront, on property currently occupied by a pair of struggling municipal tracks. Some heavy hitters are involved, as Mike Keiser is among the fundraisers for the complex, which will be designed by Tiger Woods and take shape just a chip shot from the site of Barack Obama’s forthcoming presidential library. If Rolfing and his partners can secure financing and negotiate their way through the city’s political bureaucracy – issues where a locally beloved president and one of the world’s most famous golfers would certainly be helpful – their golf course could open in 2021, the same year that the library is scheduled to open.

     The planet’s hottest golf market, the Socialist Republic of Vietnam, set an official target for golf construction: 96 courses by 2020. Seeing as how the nation currently has something like 40 or 45 courses, the math says that about 50 courses might open in Vietnam over the next four years. Such a pace of construction begs two obvious questions. First, Can Vietnam’s resident golfers (all 10,000 of them) and vacationing golfers from other nations (7,000 annually these days) sustain nearly 100 golf courses? And second, What happens when Vietnam reaches its goal?

Sunday, December 18, 2016

The Week That Was, december 18, 2016

     The President-Elect’s golf operation may be looking to buy a high-prestige golf resort in suburban London, England. The Daily Mail reports that Trump Golf has expressed an “interest” in Stoke Park Country Club, Spa & Hotel, a venue that features a 27-hole golf complex. The property, in Buckinghamshire, is said to be the first “country club” in the United Kingdom. It’s probably best known for serving as a location for scenes in two James Bond movies, Goldfinger and Tomorrow Never Dies, as well as Bridget Jones’s Diary. Top 100 Golf Courses believes that the resort’s original 18-hole track, a Harry Colt design that dates from 1908, is “surely one of the finest parkland golf courses in the South of England,” and its seventh hole, a 150-yard par-3, served as the inspiration for the 16th at Augusta National. Trump Golf hasn’t commented on the potential acquisition, but the resort’s owner, a family-controlled entity called International Group, has acknowledged that it’s received “unsolicited approaches from interested parties.”

     The President-Elect may not be familiar with Harry Colt’s work, but Mike Keiser sure is. In fact, the world’s foremost developer of neo-classic links is thinking about building a Colt “homage” course at Sand Valley, his naturalist-style resort in central Wisconsin. Keiser describes himself as a “big fan” of Colt’s work, and he’s been down the tribute road before, as he famously commissioned Tom Doak and Jim Urbina to honor C. B. Macdonald at Bandon Dunes. For those who may not be familiar with Colt, he’s one of the seminal figures in the history of golf architecture, as he designed, redesigned, or made crucial design improvements to many of the world’s most famous golf courses. The complete list is much too long for me to regurgitate, but the group includes Muirfield, Royal County Down, Pine Valley, the Dunluce course at Royal Portrush, Swinley Forest, Sunningdale, Royal Porthcawl, the West course at Wentworth Club, Toronto Golf Club, and, of course, Stoke Park. Sand Valley, which could eventually have as many as six courses, expects to open its first, a Coore & Crenshaw design, in the spring of next year, and its second, by David McLay Kidd, could enjoy a soft opening several months later. Keiser is currently weighing options for course number three, with the tribute track vying against proposals from Doak, Urbina, and Mike DeVries. If he opts to go the Colt route, he’ll likely give the commission to Coore & Crenshaw.

     One of the biggest names in golf has agreed to design the Chicago Park District’s highly anticipated, Barack Obama-endorsed golf complex. It’s Tiger Woods, who was nominated for the job by the First Golfer and who now has a chance to produce a career-defining layout. The to-be-named complex, which will take shape on property currently occupied by two financially challenged municipal tracks, will consist of an 18-hole course capable of hosting an elite PGA Tour event and an easier-to-play nine-hole course. “This is a really exciting time if you are a golf nut in Chicago,” the park district’s superintendent told the Chicago Tribune. “For far too long, you’ve watched droves of Chicagoans leave the city to play golf in the suburbs.” The complex will take shape along Lake Michigan, in the shadow of Obama’s forthcoming presidential library. The park district hopes to break ground in the spring, with play to begin in 2020. Woods, who needs good public relations to rehabilitate his image, has promised to deliver “a course that everyone will enjoy.”

     Though he’s no fan of “signature” golf, Mike Keiser has endorsed the Chicago Park District’s selection of Tiger Woods as the designer of its lakefront golf complex. “I like the choice,” says Keiser, who understands how valuable a brand-name architect’s salesmanship can be in potentially divisive development ventures. Keiser is serving as an adviser to Mark Rolfing, the project’s initial evangelist, and as a fundraiser for the park district, which may need $30 million or more to complete the construction. On the fundraising front, Keiser regards President Obama, a Chicagoan, as an ace in the hole. “When Obama became engaged, he galvanized the donor class of Chicago golfers,” he says. “He’s why the fundraising is going to be successful.”

     Concert Golf Partners is hoping to acquire a Philadelphia-area venue that claims to offer “a relaxed yet refined private club experience.” Peter Nanula’s Newport Beach, California-based investment group has offered to buy White Manor Country Club, a venue in Malvern with an 18-hole golf course that’s operated since the early 1960s. Concert has reportedly offered $46,000 an acre for the club, an amount that translates to somewhere between $7.36 million and $7.82 million. Such a price will certainly catch the attention of the club’s bondholders, but the sale is no sure thing for two reasons. First, although the club will lose money this year, a local newspaper reports that the deficit is “not alarming and could be handled without selling the club.” Second, other potential buyers have emerged since White Manor’s availability became known.

     The on-again, off-again sale of Accordia Golf is on again. MBK Partners, a South Korean private equity group, has offered $760 million for Accordia, Japan’s best-known golf operator, and the price has received a thumb’s up from Accordia’s ownership. The Financial Times reports that Japan’s golf industry has fallen on hard times -- the culprits are “shrinking corporate expense accounts and stagnant wages” that are “putting courses out of business” -- but it acknowledges that “Accordia has generally thrived.” For its part, MBK believes it can buck the prevailing negative trends by attracting golf tourists from nearby nations and persuading Japanese retirees to take up the sport. Accordia, which was established by Goldman Sachs, reportedly owns 43 golf properties and manages 93 others, which is roughly 5 percent of the 2,500 in Japan.