Golf Community Reviews

        According to Golfweek magazine, a group of golf organizations have hired a high-profile lobbyist to buff the game’s image in Washington.  According to Golfweek’s Gene Yasuda, the PGA of America,

National Golf Course Owners Association, Golf Course Superintendents Association of America and Club Managers Association of America have contributed a total of $200,000 to engage the firm Podesta Group to change lawmaker perceptions that “associating with golf is somehow a bad thing,” according to a Podesta principal.

        The recent turn in golf’s reputation makes one nostalgic for the days when the game was mostly criticized for its mythical uniform -– white belts and shoes, lime green pants, etc.  These have been rough months for golf, especially for the PGA:  First Tiger Woods’ “accident” and then, this week, allegations by Scott McCarron that Phil Mickelson is a “cheater” because he is using a faux-legal square-grooved wedge in competition.  Mickelson’s rejoinder that the club is not illegal and that three other players are using it (out of more than 140 on tour) doesn’t exactly elevate the sport’s honorable image, nor does the ungentlemanly dust-up between the tour’s #2 player and a journeyman.

        Golf has been fortunate that the conduct of its principals has largely

matched its principles of honesty and self-regulation.  But Tiger’s wayward behavior, Phil’s taking advantage of a loophole, and the serial embarrassments of John Daly argue that the game’s marketing focus should shift away from its stars (unless it could figure out a way to make players like Jim Furyk and Stewart Cink interesting, which it can't).

        The PGA Tour’s formerly clever ad line, “These Guys Are Good,” rings hollow; and with the disclosures about Woods, it is filled with unfortunate double entendres.  Better the tour should start intensify its inconsisten emphasis on its contributions to charities.  Perhaps start with a campaign under the banner “These Guys Do Good.”

Daniel Island features Tom Fazio and Rees Jones golf courses as well as a community that puts many houses within walking distance of all shopping and services.

 

        For years, golf communities at a distance from urban areas have been a lure for retirees.  Some folks are content with homes far from a bustling city and do not mind being totally reliant on a car to take them to where any action is, modest though that action may be in the boondocks.

        Not me.  Although I am resigned to live most of the year in a home on the South Carolina coast,

which my wife favors, I am insistent that we spend at least a couple of months in some urban environment each year.  Paris sounds nice, but I’ll settle for New York or Boston, any place where I can hang up the car keys for an extended period and let my feet (and public transportation) take me where I want to go.

        I thought I might be a little odd in this regard, at least as far as baby boomers go.  But according to a recent Urban Land Institute report, I’m actually going with the flow.  The ULI reports that, “75% of retiring Boomers said that they want to live in mixed-age and mixed-use communities, i.e. in urban settings.”

        The report went on to add that, “Not all will want to move to the central city, and walkable, urbanized suburban town centers will see an influx of aging Boomers.”

         Near our home in Connecticut, nearly all condos in such a mixed-use development have sold, despite the extreme troubles in the condo market.  Blue Back Square in West Hartford is like a mini-city,

about a six-block square of retail stores, restaurants, shops, fitness centers, parking areas and apartments above it all.  Some of the anchor tenants include a Cheesecake Factory restaurant, Whole Foods supermarket, a three-screen cinema, Barnes & Noble bookstore and Crate & Barrel furniture store.  Town hall and a large library are within two blocks of Blue Back Square’s edge, and another two blocks takes you into the center of West Hartford, with dozens more restaurants and shops.

        This kind of manufactured urban setting is not new, although the momentum has stalled somewhat during the last five years (hasn’t everything?) as the condo resale market has virtually collapsed.  But, adds the Urban Land Institute, “once the Boomers can sell their homes and buy condos, these centers will thrive during the decade ahead.”

        Few of these urban centers have the space to include golf courses within their perimeter, but one place that comes close is Daniel Island, outside of Charleston.  Daniel Island is more or less self-contained, with many attractive Charleston style homes within walking distance of supermarket, offices, shops and restaurants.  Two 18-hole golf courses (Tom Fazio and Rees Jones) are within the confines of Daniel Island but a short drive from most of the housing.  Still, Daniel Island captures the spirit of what is often referred to as “new urbanism.” 

        If the demographers and sociologists are right, Daniel Island could be ahead of its time.

The clubhouse at Colleton River, where some property prices are as low as $20,000, looks out to the Pete Dye golf course and beyond to marsh and river.  The community also includes a Jack Nicklaus Signature course.

 

        Golf lot prices hit harder than homes.  I was surprised to see a “foreclosure” golf-view lot for sale for just $49,900 in the upscale Colleton River community just off Hilton Head.  At .59 acres, this is no patio lot.  I figured the bank was desperate to cash out, but when I looked further at prices in Colleton River, they were as low as $20,000 (not foreclosures).  “…lots in our golf communities have all taken a big hit,” says Bluffon, SC, area real estate agent Tom Jackson.  “Great timing for someone who wants to build.”  Figure $175 a square foot to build a home in keeping with those around it, and you could be all set for under $550,000 in one of the south’s best regarded golf communities.  Most homes in Colleton River range from the high six figures to  $1 million plus.  The golf is excellent, featuring both Jack Nicklaus and Pete Dye golf courses that are studded with live oaks and marsh views.

        Here we go again?  Most economists point to minimal down payments and low interest loans as fundamental reasons for the current housing mess.  My brother Bob, a San Francisco-based financial

adviser, included a simple but compelling chart in his latest newsletter to clients that implies déjà vu all over again.  It showed that the FHA (Federal Housing Authority) mortgage program requires just a 3.5% down payment for a home, or $7,000 on a $200,000 home.  Figure in $1,500 in closing costs, and the total $8,500 cash needed by a buyer of modest means is totally covered by the current government homebuyer credit.  “Curing a debt bubble with more debt,” Bob writes.  He concludes that “zero down, courtesy of the government…will ensure that a whole generation of marginal borrowers will keep the housing recovery on shaky ground.”  I hope the economic wizards in Washington know more than Bob, but I wouldn’t bet on it.

        Cliffs Communities in UK press report.  United Kingdom newspaper reporters love a good scandal, and they have probably written as much as U.S. papers have about Tiger Woods’ problems.  This past week, the Guardian of London’s web site took a more business-oriented tone and looked at the

prospects for Woods’ fledgling golf design business.  “For all that was written about the hypocrisy of Tiger Woods,” wrote Guardian blogster Lawrence Donegan, ”…there was only one sponsorship deal in which he explicitly used his family as a selling point, and that was the deal he had with a golf course community in South Carolina called The Cliffs.”  (See our earlier discussion of the Cliffs dilemma by clicking here.)  Also last week, a Golfweek article speculated that “any route they [The Cliffs] take could be challenging, considering what has been an almost singular reliance on Woods.”  The Cliffs ducked all Golfweek inquiries about their marketing plans regarding Woods.  The longer Woods stays out of the public eye, the tougher it will be for The Cliffs to generate the property sales they need at High Carolina.  And when Woods eventually returns, he may be embraced by the golf nuts who follow his every swing, but whether that translates into $1 million property sales remains to be seen.

        Grape expectations.  Homes in golf communities in Florida suffered some of the nation's worst price drops in the earliest days of the housing crisis.  Since 2005, many homeowners associations and developers have been retrenching, cutting costs and staff to get by.  The last thing they are spending money on is marketing, especially fancy brochures, but one Florida golf community is bucking that trend.  I settled back in my recliner early one morning this week, opened up my copy of the Wall Street Journal, and a large, eight-panel, full-color brochure from Vineyards fell to the floor.  Vineyards is located in Naples and features condos starting in the $400s and single-family homes from the $600,000s in an amenity-rich community.  The Vineyards brochure declared the development is “debt free,” which is a very nice place to be these days.  I will write more about Vineyards in coming weeks.

         A robot comes out of its hole and sees its shadow… PETA, or People for the Ethical Treatment of Animals, wants the organizers of the annual Groundhog Day in Punxsutawney, PA, to replace Punxsutawney Phil with a robot.  PETA believes it is unfair to keep the animal in captivity and to subject it to bright lights and big crowds that gather at the annual celebration.  The organizers of Groundhog Day, upon which a prediction of the spring season depends and one entertaining movie was made, counter that the animal lives in a climate-controlled enclosure that is inspected annually by the Pennsylvania Department of Agriculture.  A comment by Groundhog Day official William Deeley put everything in perspective and, perhaps, PETA in their place, when he said, “the groundhog is treated better than the average child in Pennsylvania.”  We await additional comment from People for the Ethical Treatment of Children Organization (PETCO).

The clubhouse and golf course at Glenmore are up for sale in the wake of an embezzlement by a member of the family that owns the club.

 

        Glenmore, just outside Charlottesville, VA, and one of my favorite communities, has been living a nightmare since last July with the news that a family member had embezzled $700,000, mostly from the coffers of the homeowner’s association but a portion from the golf club as well.  Mike Comer, 45, both the president of the Glenmore Golf Club and treasurer of the HOA, disappeared in July after being called to a special meeting with Glenmore officials to discuss irregularities in the community’s balance sheet.  He was found a month later, arrested and indicted in September.

        Comer is the husband of former Glenmore director of golf Kandi Kessler, daughter of the

late Frank Kessler, a revered local businessman who developed Glenmore.  Mr. Kessler had a well-earned reputation for fair dealings as well as a conservative approach to financing.  The goodwill he built was transferred to his surviving family members, so much so that the homeowner’s association members had never pushed for an audit of the organization’s finances until this past summer, when HOA leaders noted the financial inconsistencies and invited Comer to the meeting he never attended.

        The family has paid back half the money lost and has pledged to return the rest by this August.  A few developer lots remain in the almost totally built community, and the family has reportedly pledged to sell them if necessary to cover the balance.  Because of the humiliation brought upon them and a loss of appetite for managing the club, they have put the golf course and clubhouse up for sale.  According to people I know at Glenmore, two potential buyers have emerged, one a wealthy resident of the community.  The club’s value is estimated around $4 million.  Homes in Glenmore are priced generally in the mid- to high-six figures.

Glenmore's John LaFoy golf course is links style, in keeping with the overall Scottish theme in the community.

 

        With all the tumult, Glenmore is in better shape financially than you might think.  On-site real estate sales director Tom Pace told me that he has seen more potential buyers visit the community in January than in the entire second half of 2009.  The homeowner’s association had enough in reserve to cover expenses in the short term; residents saw their annual dues increase to a modest $797 from $766.  Residents in dozens of troubled communities in Florida and elsewhere only wish their dues had gone up $31. The Glenmore Club, which charges $20,000 for initiation fees per couple and a modest $500 per month in dues, lost a handful of members to nearby Keswick Club.  The Keswick clubhouse is a baronial work of art, but its Arnold Palmer golf course is much fussier than the classy John LaFoy layout at Glenmore.

        Glenmore has handled the embezzlement by being upfront and forthright about it.  Before they toured the community, a couple I referred to Glenmore met with Tom Pace who informed them of the embezzlement and explained the steps Glenmore was taking to weather the storm.  That is precisely the way to handle it.

         The Glenmore family may be shattered, but family values seem to have survived intact.

        It seems that just about everyone but his wife wants Tiger Woods back.  Now we learn that Phil Mickelson misses Tiger too.  He told reporters a couple of days ago that he wants the wayward star back on tour.

        "The game of golf needs him to come back,” said Mickelson. “I mean, it's important for him to come back and be a part of the sport."

        What’s next?  Hillary Clinton urges John Edwards to return to national politics?

        Woods’ two months of silence has worked a kind of rope-a-dope magic on Mickelson, PGA Tour Commissioner Tim Finchem and the many bloggers drooling at the prospect of a near-term return for the superstar.

They’ve all punched themselves silly in the process, none more so than Mickelson, the poster boy for family values on tour.  While he was coming to the aid of his ailing wife, Woods was humiliating his.  Odd that Mickelson should be the first high-profile player to urge Woods’ return; odd, that is, unless you follow the money (prize money).

        Finchem and company will tell you that much more than prize money is at stake without Woods playing, and that the $100 million or so the tournaments generate for local charities are at risk without Woods.  But the Travelers Championship in small-market Hartford, CT, raises more than $1 million per year without Woods ever showing up; a little more creativity on the part of the PGA Tour, and its partners could make up for much of any shortfall.

        Memo to PGA Tour:  Learn the lesson of baseball, whose celebration of paper heroes like Mark McGwire and Barry Bonds was a flawed strategy.  By dancing around the golden tiger and anointing Woods bigger than the tour, Mickelson and Finchem are acknowledging that the PGA’s competitive model is fundamentally flawed and that all those non-golfers we thought didn’t understand the game have been right all along:  Golf is just too boring to watch.

         With his febrile plea to Woods to come back, Mickelson pulled out the wrong club and swung too hard.

        The recent deep freeze that reached as far south as Orlando and put a serious hurt on citrus crops there did not deter dedicated golfers in the deep south.  Greenville, SC, real estate professional Lee Cunningham sent the photo below as testimony that New England and Midwestern golfers do not have the market cornered on cold weather play (although Greenville boasts of more days of sunshine annually than any other city in the state).  Perhaps golfers at The Thornblade Club saw the frozen ponds (foreground in photo) as hazard insurance, although no meterological condition could neutralize the effects of the Tom Fazio bunkering on the classic course.

 

Frozen ponds may keep golfers at Tom Fazio's classic Thornblade Club out of the water hazards, but plenty of sand hazards await.

 

        I have written about The Thornblade Club often since I first played the golf course and dined in the clubhouse nearly five years ago.  Read my comprehensive golf course review here.  Thornblade, which hosts a

Nationwide tournament and spawned U.S. Open winner Lucas Glover, is a prime example of how golf-focused couples can save money by purchasing a home and a golf club membership from separate entities.  At Thornblade, many of the traditionally styled houses are within a short walk of the clubhouse, and others a two-minute drive.  Most of the extra amenities one would expect in a golf community, such as pool, tennis and nice dining areas, are available on the club's grounds.  I can vouch for the food at Thornblade, which was better than 90% of the golf community clubhouses I've eaten in.

        Greenville did not suffer a dramatic increase in house prices before the 2005 market drop and, therefore, area prices have not suffered the way more high-growth areas like Myrtle Beach have.  And according to local data, more new house permits were issued in the Greenville area in the second half of 2009 than in the first half, which typically accounts for 60% of the year's new permits.  That signals some confidence among builders and a possible strengthening of the market.

        Lee Cunningham, a member of our network of real estate professionals throughout the southern U.S., sent us a photo of a 5 BR, 4 1/2 BA, 5,900 square foot home currently for sale in Thornblade. "It's on a great street and backs to a natural area with a creek for privacy," says Lee, and includes a finished basement, multiple decks and a private backyard. The house is listed at $699,900, $125,000 off its original price.  Fifteen minutes away, comparable properties in the hyper-amenitized Cliffs Valley community run into the seven figures, but some include golf membership in six clubs, currently valued at $150,000.

        Greenville has about a dozen golf communities in the metro area, as well as excellent private clubs, like Thornblade, and semi-privates that are central to residential neighborhoods.  If you would like more information on life and real estate in the Greenville area, or a free copy of a newsletter I dedicated to some Greenville area golf communities, contact me.

        Most of the reports today of a drop in new home sales include the footnote that “economists were surprised.”  Well, there’s a news bulletin for you.  Aren’t these the same guys who stood mute as the whole economic mess unfolded, and then made livings out of unhelpful after-the-fact analyses?

        According to reports, these geniuses expected the new home sales figure for December to be about 44,000 homes more than the reported 342,000.  Oops...again.

        I was an English major; therefore, almost by definition, numbers are not my strong suit.  But you don’t

need to know your multiplication tables to understand that a continuing rush of foreclosures, an unprecedented percentage of homeowners “under water” (mortgages greater than the values of their homes) and a double-digit national unemployment figure are, together, a huge drag on new home purchases.  The new-home builders are obviously way smarter than the economists (the more so for not listening to them).

        Sure, back in the days when price was almost irrelevant in buying a home in a rapidly rising market, most people wanted that new house smell.  It is a rush to be able to select your color scheme, appliances and flooring.  But that was then, and this is now:  Millions of homeowners so desperate to unload their homes before they face foreclosure that you could probably gut and refinish a 20-year old home to your desires and still have some money left over, compared with what you’d pay for a comparable new home.

        In this economy, a tremendous bargain smells a lot better than a new home.

The new Cape Fear National Golf Club is part of the $179 three-day discovery tour courtesy of Brunswick Forest, near Wilmington, NC.

Photo courtesy Cape Fear National.

 

        Golf communities know that if they can get a couple to stay on their property for a few days, try out the golf course, maybe have a nice meal in the clubhouse and partake of the area’s cultural and entertainment activities, they have a fair chance of making a sale.  Back when the market was good, some communities told me nearly 20% of those who visited wound up buying property.  Today, the number is closer to 5%, but if you are selling dirt for, say, $150,000, a hit rate of 1 in 20 still is not bad if the total acquisition cost is just a few thousand dollars.

        Communities use the lure of a cheap vacation to generate traffic to their properties.  For a couple hundred dollars or so, they offer “discovery tours” that typically include a couple of days of lodging, golf

and perhaps a meal or two.  How does “3 days and 2 nights in Historic Wilmington, NC” strike you for just $179, including a room in a luxury downtown hotel, round of golf for two, access to an 18,000 square foot fitness and wellness center, a poolside lunch, a trolley tour and dining discount at a waterfront café?  That’s the deal currently at Brunswick Forest, a three-year old community outside of Wilmington that just debuted a new Tim Cate golf course.  Brunswick Forest’s developers have deep pockets, as I have reported here, which adds a little cushion of safety for those who are skeptical of communities that are still in development.

        Further up the Carolina coast, Ocean Ridge Plantation, a mature and golf-loaded community, is running a $199 3 day, 2 night discovery special to celebrate the opening of new properties.  It includes lodging in a golf cottage on site, a round of golf at one of the club’s six courses, and lunch in the clubhouse.  Ocean Ridge is substantially built out, and its publicly accessible “Cats” golf courses (all named after jungle felines) are popular, especially Tiger’s Eye.  It is just a few miles from the ocean and about 20 minutes from Myrtle Beach.

        The lowest priced discovery tour I have seen anywhere is at

Brunswick Plantation, which is just a few miles from Ocean Ridge, where you can stay on property for 3 days and 2 nights for just $40, or 5 days and 4 nights for $90.  Golf is extra, maybe another $50, but if you were to purchase a 3-day golf and lodging package in one of the Brunswick Plantation villas, without the discovery tour, you would pay from $150 to $210, depending on the season.

        These are just a few of the many discovery tours available throughout the southeast, and even those communities that don’t promote them can make arrangements for a stay.  (Note:  If you are interested in arranging a couple of days at a particular community, contact me and I will make the arrangements for you.)

        A few discovery tours packed into a week can make for a nice little vacation, but more importantly, they can bring the nuances of each community into sharper focus when compared with the others.  If you do visit, make sure that you:

√  play at least one golf course per community;

√  dine in the clubhouses (lunch, at least) to test the food and the atmosphere;

√  define the type of home and property you are considering, and make sure the developer’s agent shows you a sample of those;

√  resist being smitten by amenities you won’t use, since you will wind up subsidizing them (in your dues payments);

√  and make sure the developer’s agent furnishes you with an accounting of all costs of living in the community, including taxes, homeowner association dues and assessments (insurance and cable TV are typically included), and club dues. 

        One other suggestion:  During your visit, make a call with your cell phone; some properties are on the fringes of cell phone service areas.

        So what’s the catch, you might ask?  Well, married couples must visit together and you do have to

submit to a presentation and tour of each community by a developer’s sales representative.  And when you return home, expect a continuing flow of email messages, marketing brochures and phone calls, at least until you make it clear you are not interested in the community or purchase property somewhere else.  But if you don’t mind the occasional intrusion via mailbox and phone, it may be worth the savings.

        And you might just discover the community of your dreams.