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Opening a new golf course

post #1 of 18
Thread Starter 

a friend of mine was telling me that he has a bunch of land and said something about making a golf course on it if they can't sell it.  how much do they usually cost?  just a standard 18 hole course.  nothing fancy.  maybe a $30-$40 green fee kinda course.  the location is pretty good right off a major interstate highway and no other real golf courses within 20 miles.  what kind of costs are associated with getting one going?

post #2 of 18

I would think its definitely in the 7 figures area.

 

The course I worked at was a multi-million dollar estate and they poured money into that place hoping it would become something big. It was owned by a company who built golf resorts around the world. I want to say they were based out of Atlanta. 

post #3 of 18

Depends who/what you know.

 

But...a LOT. Brew's right...easily in the 7 figure range.

post #4 of 18

Also, even assuming they get the money together to build the course they should expect to run at a loss for awhile.

post #5 of 18

A friend of mine who used to work as a commercial banker referred to this as land banking.

 

Build a decent golf course and see what happens 20 years from now. If development continues in the area, but the golf course is still the best yield you can get for the land, you keep it as a golf course.

 

But, if you have recaptured the cost of building the course, and can turn the 160-acre plot into 640 quarter-acre building plots for upscale homes, you vacate the course and turn it into a subdivision. So... $50,000 x 640 lots = $32 Million.

Or, you may develop it as an industrial compound or office park.

 

This idea brings back bad memories of the 1960s, when about half the public courses in the St. Louis County got subdivided or turned into offices. But, that's the way things work. And, twice as many courses have replaced them, starting about 1990.

 

A USGA site suggests that the average golf course costs $1.8 million to $4.5 million to construct. Add construction to the open-up costs, and you can need up to $10 million to get started. For discussion, see:

http://www.usga.org/course_care/articles/construction/general/Building-And-Maintaining-The-Truly-Affordable-Golf-Course/

 

Also, a group called the GCBBA has a software which analyzes 80 line-item costs common to golf course construction and development.

Here's the demo: http://eserver.gcbaa.org/Cost_Guide/INDEX.html

post #6 of 18

Don't forget that on top of the course costs, you also have to factor in another 300k-2M+ for the clubhouse (and restaurant banquet facilities) unless you're going the trailer route.

post #7 of 18
Quote:
Originally Posted by 460CompMark View Post

a friend of mine was telling me that he has a bunch of land and said something about making a golf course on it if they can't sell it.  how much do they usually cost?  just a standard 18 hole course.  nothing fancy.  maybe a $30-$40 green fee kinda course.  the location is pretty good right off a major interstate highway and no other real golf courses within 20 miles.  what kind of costs are associated with getting one going?
If your friend has asked you to research this topic by asking golfers who typically don't work in the industry what it might cost, he is either a billionaire or will be broke very soon.
The fact that it has been suggested that it might well cost over a million dollars indicates this. That might get you a few holes and an architect assuming you own the land. Forget about buildings, roads ,drainage,greensand employees. Not really sounding like a plan.
post #8 of 18

Last year I had the opportunity to buy a defunct golf course. 18 hole facility on 137 acres with a good maintenance shed, small clubhouse (grill, no banquet facilities), plus a narrow driving range. So really it was solely a golf facility with a strong presence it the area. The long and short was that I could get it for about 200K but it had no equipment at all and irrigation was an unknown. Big thing was that the greens needed to be redone which was 40K in material (turfblend topsoil and seed). Weekend rates need to be $35 to $40 with cart on the weekend with discounts for weekday and twilight play. There was a track record of 27K rounds per year. Long and short was that it wouldn't make it with these numbers, it would have to have a strong F&B/Events facilities to be able to make it. Land banking isn't an option, it's already in a community so there are no development opportunities. Oh, and then there is the old saying that it is the 3rd owner of a course that has a chance to make money, the first two carry too much debt load and go under.

 

TL;DR - Golf as a small business is unlikely to work, you need big capital to build and market it right and weather the many things that can go wrong.

post #9 of 18
Quote:
Originally Posted by eich41 View Post

Don't forget that on top of the course costs, you also have to factor in another 300k-2M+ for the clubhouse (and restaurant banquet facilities) unless you're going the trailer route.

 

Ah, yes, the dining room. For broad planning, golf courses recognize two categories of costs: golf - all your course maintenance and golf operations line-items, and lunch: everything else.

 

The average equity country club (initiation fee + stock purchase) loses about $150,000 a year on its food service operation if it maintains a formal dining room and kitchen. The club has to make up the shortfall somehow.

 

Most of the semi-private clubs in our area have cut back to a 19th-hole snack bar for food. If you use the banquet rooms for an event there, like a big tournament dinner or a wedding reception, outside caterers bring in the food.

post #10 of 18
Thread Starter 

guys, this is not going to be a fancy course.  we are talking a trailer pro shop until the course starts showing progress.  just a small public course.  but yes, he knows it would cost a pretty penny before land broke.  you would definitely have to start out with an architect who would come out and just look at the land to see if it's possible.  it might even be possible to do it without an architect if you can get a layout of the land and go about it yourself.  would definitely need to know what you are looking at and how it would translate from paper to ground.

 

about how many acres is a course of say 6700-7000 yards?  assuming not long distances from greens to the next tee.

post #11 of 18
Quote:
Originally Posted by eich41 View Post

Don't forget that on top of the course costs, you also have to factor in another 300k-2M+ for the clubhouse (and restaurant banquet facilities) unless you're going the trailer route.

 

Even after all the start up costs, you're also talking 100's of thousands of dollars every year for maintenance.

post #12 of 18
Quote:
Originally Posted by 460CompMark View Post

guys, this is not going to be a fancy course.  we are talking a trailer pro shop until the course starts showing progress.  just a small public course.  but yes, he knows it would cost a pretty penny before land broke.  you would definitely have to start out with an architect who would come out and just look at the land to see if it's possible.  it might even be possible to do it without an architect if you can get a layout of the land and go about it yourself.  would definitely need to know what you are looking at and how it would translate from paper to ground.

 

about how many acres is a course of say 6700-7000 yards?  assuming not long distances from greens to the next tee.

Very hard question to answer. Merion where they played the US Open recently is a bit over 100 acres but that course is an anomaly and the USGA had to make a lot of compromises to make it work. I'd say a decent public track can work on 100-125 acres but it all depends on the topography, ponds, trees, etc. You don't want holes right next to one another due to potential liability issues and planting trees between fairways is a maintenance issue.

post #13 of 18
Quote:
Originally Posted by 460CompMark View Post

...  you would definitely have to start out with an architect who would come out and just look at the land to see if it's possible.  it might even be possible to do it without an architect if you can get a layout of the land and go about it yourself.  would definitely need to know what you are looking at and how it would translate from paper to ground. ...

 

 

I saw a lot of homemade courses when I lived down in Oklahoma. About half came out acceptable - good for everyday golfers, but you'll never see any USGA tournaments there, not even district level.

 

The other half came out... looking homemade. Frequent problems: fairways that eroded out by year two... a couple of tee boxes that were always mushy from water and poor drainage... strange design features, like the 210-yard par 3 with a 20* dogleg left.

 

Consider that was in the 1990s. With the environmental permits needed these days for golf courses, it would be rough to "do it yourself."

 

Plus, homemade courses are highly likely to need major rebuild here and there about year five, when a course should finally be turning a profit. Maintenance headaches and quirky design keep golfers away also, even if it's the only course in the area.

 

 

Quote:
Originally Posted by 460CompMark View Post

... about how many acres is a course of say 6700-7000 yards?  assuming not long distances from greens to the next tee.

 

Merion GC occupies about 137 acres. That's a bit small, however.

 

Generally, a plot of 160 acres - a quarter-section as surveyors call it - gives you enough room for course, clubhouse, maintenance area, golf range and nursery plot. Also, crowded layouts increase your liability, as people are more likely to be conked on the head form the next fairway if the holes run too tightly side-by-side.

post #14 of 18

At some point in my life, my dream/goal is to create a golf course here in NE Ohio. I definitely believe it will happen, but before that time comes, I'll be sure I'm financially prepared and stable enough to go work at a course and learn the inner workings like Gordon Ramsay recommends of wannabe chefs/restaurant owners.

I remember that when I was a kid, I used to form a template for a hole using a tuna can near the woodline of my grandmothers property. Then, I'd use a broken 7i shaft as my flag stick with the grip painted white and a piece of orange "wide load tape" tied to the end. Then, I'd use a flea-market no-name 7-i and 3w to try and get hole in ones all day long.

Come to think of it, the damn hole I dug in the ground as a 10 year old was nicer than some muni's I've seen in central Ohio.... lol

post #15 of 18
Quote:
Originally Posted by Spyder View Post

At some point in my life, my dream/goal is to create a golf course here in NE Ohio. I definitely believe it will happen, but before that time comes, I'll be sure I'm financially prepared and stable enough to go work at a course and learn the inner workings like Gordon Ramsay recommends of wannabe chefs/restaurant owners.

I remember that when I was a kid, I used to form a template for a hole using a tuna can near the woodline of my grandmothers property. Then, I'd use a broken 7i shaft as my flag stick with the grip painted white and a piece of orange "wide load tape" tied to the end. Then, I'd use a flea-market no-name 7-i and 3w to try and get hole in ones all day long.

Come to think of it, the damn hole I dug in the ground as a 10 year old was nicer than some muni's I've seen in central Ohio.... lol

 

 A guy I know went to school to design golf courses. Didn't work out for him, but he still has that knowledge. 

post #16 of 18
Quote:
Originally Posted by manuelbarrera View Post

As its location is on interstate highway, the prices would be higher than usual whereas it shouldn't fall in outer area as well.

 

rug pad

Uhhh... okay?

post #17 of 18
Quote:
Originally Posted by Spyder View Post

At some point in my life, my dream/goal is to create a golf course here in NE Ohio. I definitely believe it will happen, but before that time comes, I'll be sure I'm financially prepared and stable enough to go work at a course and learn the inner workings like Gordon Ramsay recommends of wannabe chefs/restaurant owners.

I remember that when I was a kid, I used to form a template for a hole using a tuna can near the woodline of my grandmothers property. Then, I'd use a broken 7i shaft as my flag stick with the grip painted white and a piece of orange "wide load tape" tied to the end. Then, I'd use a flea-market no-name 7-i and 3w to try and get hole in ones all day long.

Come to think of it, the damn hole I dug in the ground as a 10 year old was nicer than some muni's I've seen in central Ohio.... lol

 

At ages 8 thru 9, I lived next to the "Capitol Grounds" in front of the Kentucky State Capitol.  There were four very large ground areas in fron.  I inserted tomato soup cans in one area and made about 4 holes.  Then, I took my push mower lawn mower (no engine) and cut the greens.  Since my mower was set lower than the states tractors, I was able to keep my greens for the summer.  I spent a lot of time practicing and since my house was only 50 yards away, I played past dark.

post #18 of 18
Quote:
Originally Posted by Spyder View Post

Uhhh... okay?

 

Hahahaha. Looks like some sort of spam bot. lol

 

Home rugs anyway? d2_doh.gif

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