The Week That Was, september 22, 2013

     An investment group with renewed interest in the golf business has agreed to purchase American Golf Corporation, the one-time titan among U.S. golf course operators. According to the Pellucid Perspective, New York City-based Fortress Investment Group “will likely” pay more than $1.8 billion for AGC, which currently controls fewer than 100 golf properties. Pellucid’s estimate seems high, as a $1.8 billion price suggests that AGC’s mostly pedestrian courses are each worth roughly $18 million. The seller is another investment group, one led by Goldman Sachs and Starwood Capital Group. The Sachs/Starwood entity bought AGC in 2003, when it was the world’s largest owner/operator of golf properties, and subsequently disposed of more than half of AGC’s portfolio. Assuming that the transaction closes, it’ll be Fortress’ second investment in the U.S. golf industry this year. In July, it became a financier for Arcis Equity Partners, a freshly minted golf investment group from Irving, Texas. Fortress, a hedge fund operator, has since 2006 owned Intrawest, a Denver, Colorado-based resort owner and operator that once had well over a dozen golf properties among its holdings. Fortress has sold all but four, two of them in Canada. If all this history is any guide, you can expect AGC’s portfolio to shrink a bit more in the future, as Fortress attempts to squeeze out profits from its assets.

     The repressive military regime that controls Fiji has claimed one of the richest events on the Asian golf tours. The PGA Tour of Australasia has created a $1 million event, the Fiji International, for the banana republic, which has since 2006 been ruled by a despot, Commodore Josaia Voreqe Bainimarama. (Everyone calls him Frank.) The Fiji International, which has been sanctioned by OneAsia, will get a five-year run at Natadola Bay Championship Golf Course beginning in August 2014. OneAsia’s chairman, Sang Y. Chun, thinks the tournament “will very quickly become one of the most popular destinations on tour.” Bainimarama believes it’ll give him “a fantastic avenue to promote our beautiful nation and show the world what we have to offer.” What Fiji has to offer, according to Yahoo! Sports, is a government that “has been shunned by the international community for tearing up the Pacific nation’s constitution, sacking the judiciary, and tightening media censorship as well as reneging on promises to hold elections in 2009.”

     Pacific Links International, the Chinese-Canadian company that’s rapidly building its U.S. golf portfolio, appears poised to acquire its third golf property in greater Las Vegas, Nevada. The Las Vegas Review-Journal reports that PLI is negotiating to buy DragonRidge Country Club in Henderson, a 12-year old property that features an 18-hole course co-designed by Jay Morrish and David Druzisky. “There’s no full-blown contract yet, but we’re getting close,” DragonRidge’s owner told the newspaper. PLI, a group led by Du Sha, purchased SouthShore Golf Club and Southern Highlands Golf Club in 2011. It aims to collect at least five properties in the Vegas area, so it can offer a week-long package of golf play to the people in its fast-growing membership club. “We want to buy clusters of golf courses in strategic markets,” Harry Turner, a PLI vice president, explained. PLI also owns five courses in Hawaii and one each in California and West Virginia, and Turner acknowledged that it’s on the prowl for properties in the suburbs of New York City.

     What are the chances that Cabot Links, the top-rated golf course in Canada and Golf magazine’s #82 in the world, is upstaged by the resort’s forthcoming Coore & Crenshaw-designed layout? Robert Thompson, who recently toured the construction site in Inverness, Nova Scotia, writes that the new Cabot Cliffs course “will likely have more drama, more excitement, and more variety than Cabot Links” and ultimately receive a higher ranking. “I have a distinct feeling Cabot Links will only hold the distinction of being the best in Canada for another couple of years,” Thompson writes in a blog post for Canadian Golfer. “After that, all the talk will focus on Cabot Cliffs.” The Cliffs’ advantage, Thompson believes, is its perch overlooking the Atlantic and the variety of its landscape. “Pebble Beach meets Pacific Dunes,” he calls it. Of course, Thompson is evaluating a work in progress, not a finished product. But if he’s right, Mike Keiser and Ben Cowan-Dewar are going to need a bigger hotel.

     Hud Hinton and the principals of Affiniti Golf Partners have teamed up to create a new management group. Mosaic Clubs & Resorts aims to operate “the world’s most prestigious private and resort clubs,” according to a press release, and promises to deliver “first-class golf experiences, unsurpassed service, state-of-the-art marketing and websites, superior staff training, and exceptional client attention.” Mosaic begins its existence with two properties in Georgia, Waterfall Club in Clayton and The Manor Golf & Country Club in Alpharetta. Both had previously been managed by Affiniti, a group created by Whitney Crouse and Steve Willy. Hinton, who spent a short time as the CEO of Troon Golf and who was once considered by Golf, Inc. to be among the most powerful people in the golf industry, will be Mosaic’s CEO. “I joined Whitney and Steve because I saw the chance to create another major golf company,” he said. Mosaic will manage less prestigious properties with what the press release calls “an Affiniti banner.”

     The premier golf operator in Myrtle Beach doesn’t pay its employees the minimum wage or overtime pay, according to a lawsuit filed by a former employee. The lawsuit alleges that National Golf Management LLC, an entity created via a merger of Burroughs & Chapin Golf Management and Myrtle Beach National Company, paid a bag-drop attendant only $5.80 an hour -- the minimum wage is $7.25 -- and refused to pay him overtime even though he routinely worked 50 or more hours a week. If the allegation is true, the operators have violated federal law. The management firms haven’t commented on the matter, and no court hearings have yet been scheduled. National Golf Management owns 15 courses and manages eight others, and The State reports that it books about 60 percent of the tee times made along the Grand Strand.

     Arnold Palmer Golf Management’s golf properties in New York have been pocketing tips intended for waiters, bartenders, and other service personnel, according to a complaint filed by a national law firm. Faruqi & Faruqi LLP alleges that the management group, an affiliate of Century Golf Partners, adds a 20 percent service charge to banquet bills but doesn’t give the money to the clubs’ staffers. The law firm is working on behalf of two employees at Fox Valley Club in Lancaster, a property reportedly owned by Palmer. The plaintiffs aim to recover the gratuities they believe they deserve, along with gratuities that should have been paid to employees at two other clubs operated by APGM. As of press time, neither Palmer nor Century Golf had responded to the complaint.

     In an effort to grow the game among women, Billy Casper Golf has acquired a golf-networking group that is said to remove “the intimidating barriers that cause females to overlook the game.” BCG now controls Women on Course, a three-year-old organization that’s dedicated partly to golf but mostly to what a press release calls “the golf lifestyle.” Women on Course hosts three-day golf weekends for women at resorts from coast to coast as well as “golf, lunch, happy hour, and wine-spa activities” in major metropolitan areas. The group says that one-third of the attendees at these events have “very little knowledge of the game.” Donna Hoffman, the group’s founder, believes that BCG “is perfectly suited to exponentially grow Women on Course, so even more women will experience the business, social, and fitness benefits connected to golf.” There’s plenty of room for growth in this market, for women, who constitute nearly 51 percent of the U.S. population, constitute less than 20 percent of U.S. golfers.

     Gil Hanse recently told 7 Days in Dubai that the Old Course at St. Andrews is “the pinnacle” of golf design and that Augusta National is “as good as everyone says it is.” He also talked about the course he’s designing for Donald Trump and Damac Properties in Dubai, which he describes as “a desert course with an element of links golf.” As he’s done previously, he acknowledges that he’s “pushing a lot of sand around” to create a track capable of hosting events on the European Tour. “It will be creative and interesting to play,” he promises. “I want the experience to be a mixture of fun and interesting, and the course to be full of variety and character.” One thing’s for sure: There won’t be a hole at Trump International Golf Club Dubai as difficult as the 18th at Doral’s Blue Monster course. Hanse, who’s wrapping up a renovation of the Blue Monster, says that number 18 is “as hard a hole as you can play” and “the only hole we left untouched.”