The Week That Was, february 23, 2014

     After crunching the relevant financial numbers and weighing the likely impact of economic trends, the National Golf & Resort Properties Group has concluded that “the golf industry has turned the corner.” Steven Ekovich, one of the group’s founders, believes that “brighter days are ahead,” thanks largely to strong corporate earnings that have increased consumer confidence, particularly among wealthy Americans. “The better a golfer feels,” Ekovich writes, “the more likely cost of play becomes less of an impediment to hitting the links.” He suggests that private clubs will benefit before daily-fee tracks do, because their members “tend to be more invested in the stock market, better educated, and better off than your average public, occasional golfer.” It’s an argument we’ve heard before, and one that rings particularly true in our industry: As the wealthiest go, so goes golf.

     Water resources in California may be running dry, but a desert community in the Borrego Valley nonetheless plans to quench the thirst of a Tom Fazio-designed golf course that was forced to close three years ago. The Borrego Water District has agreed to provide water to the owners of Rams Hill, a long-troubled planned community located roughly midway between Escondido and the Salton Sea. In exchange, the developers have promised to buy hundreds of acres of grapefruit and palm-tree groves and to let them go fallow. “We need the golf courses,” the head of the local chamber of commerce told the San Diego Union-Tribune. “Golf courses bring in people with disposable income.” The developers aim to turn on the taps as soon as they can and to reopen the golf course in November.

     An expiration date is on the horizon for several golf properties in land-scarce Singapore. The city-state’s government doesn’t plan to renew the ground leases on Keppel Club and Marina Bay Golf Club, both of which will expire within a decade, and three other venues will need to give up some of their property (including one of the four 18-hole golf courses at Singapore Island Country Club) before their leases are renewed. The government is taking the action to prepare for the future, as a housing shortage is looming in the former British settlement. By reducing supply, the closings will increase the value (and price) of club memberships in Singapore, which currently has 14 private clubs and three public tracks.

     Conservative lawmakers in Utah are angling to turn over the state’s golf properties to the private sector. A representative in Utah County has introduced legislation that would force the state’s division of parks and recreation to privatize its four properties (a total of six golf courses), with a request for proposals to be issued by October 15, 2014. The legislation runs counter to advice offered by the National Golf Foundation in 2012, after it evaluated the state’s golf operations. The NGF recommended that “the present self-operation system should be continued” through the 2015 fiscal year, with privatization to be considered only if the golf operation’s financial picture doesn’t improve. The NGF’s analysts believe that “these golf courses are important to the state of Utah and add value to the state’s overall park system.” Why don’t the state’s elected officials see things the same way?

     Pacific Links International, the Chinese-Canadian company that’s rapidly becoming a force in U.S. golf, has closed on its purchase of DragonRidge Country Club. DragonRidge, a 12-year-old property in Henderson, features an 18-hole course co-designed by Jay Morrish and David Druzisky. PLI, a group led by Du Sha, owns two other golf properties in the Las Vegas area, SouthShore Golf Club and Southern Highlands Golf Club, both of which were acquired in 2011. It aims to buy at least five properties in and around the city, so it can offer week-long golf vacations to the people in its fast-growing membership club. The company also owns five courses in Hawaii and one each in California and West Virginia.

     Regarding the Trump Organization’s recent purchase of the Lodge at Doonbeg, in County Clare, Ireland, one question remains unanswered: What was the selling price? Various sources peg it at €15 million or £12.4 million (both about $20.6 million), which was the amount that the resort’s receivers were asking for. As for Donald Trump himself, he’s letting on like he got himself a bargain. “In some of our places in Manhattan,” he told the Irish Independent, “it wouldn’t get you an apartment.”

     More than 150 years after the Emancipation Proclamation and 50 years after the Civil Rights Act, Dallas Country Club has finally admitted its first local black member. He is Kneeland Youngblood, a graduate of Princeton University and a long-time physician who co-founded Pharos Capital Group, which today has more than $1 billion in assets under management. Youngblood has been active in politics since the age of 14, and he currently serves on the boards of several corporations, among them Starwood Hotels & Resorts Worldwide, Burger King, and The Gap, Inc. Youngblood formally applied for membership to the club 13 years ago. He now has the privilege of paying a $137,000 initiation fee.