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September 2017

Troubled golf courses being repurposed for housing - and much more

Sometimes, "the dirt is worth more than the grass," explained Joe Beditz, the president and CEO of the National Golf Foundation when asked about golf course closures.

Considering the strength of both the residential and commercial real estate markets, Beditz said facility owners are sometimes using this strength as their exit strategy.

For many of the 171 golf courses that closed in the U.S. during 2016, the "higher and best use" was housing. Last year wasn't the first time developers re-purposed a course.

In early 2014, for example, Ridgewood Real Estate Partners of New Jersey purchased the Marriott Grande Pines Golf Club in Orlando, Florida. They subsequently rezoned and entitled most of it for 423 single family lots, 770 multifamily units and seven acres of commercial land. Sixteen acres were sold to another developer who built a 282-unit, luxury gated apartment complex.

"I love golf and I'm bullish about the sport," says Jeff Woolson, who has been involved in the sale of more than $1.6 billion worth of properties as the managing director of CBRE Golf & Resort Properties Group. "But, with the exception of maybe Sand Hills and Augusta National, there's probably not a golf course in the country that wouldn't have a higher and better use as something else, economically."

Not all courses that meet their demise are converted to housing. Other transformations include:

  • The former Highlands Golf Club in Grand Rapids, Michigan was sold to a developer who intended to use the 121-acre property for a housing development. They reconsidered and sold it to the Blandford Nature Center, a nonprofit organization that will use it for habitat restoration, environmental education and recreation. "It also offers a rare opportunity to create significant green space and focused tree canopy in the city," said the city's mayor.
  • Tallgrass Golf Club, a onetime public course on New York's Long Island, is being converted from a public course to a 127 acre solar array known as Shoreham Solar Commons. It is projected to produce the same amount of energy as the state's largest array, approximately 50,000 megawatt hours on an annual basis. According to the Solar Energy Industry Association, one megawatt of solar can power roughly 175 homes in New York.
  • Wynn Resorts is redeveloping land once occupied by the Wynn Golf Club, transforming the 130-acre property into Paradise Park, a destination on the Las Vegas Strip that will encompass a 20-acre lagoon surrounded by meeting and ballroom space, plus a 4,000 foot boardwalk, cabanas, attractions and food service.

Officials with the National Golf Foundation said last year's closures represent only a 1.2 percent contraction in a market that still has more than 15,000 facilities. "This gradual reduction is actually indicative of the market's healthy self-balancing of supply and demand" - a trend the NGF expects to continue for several more years.

"Encouragingly, the contraction in supply has shown no direct impact on frequency of play, as rounds-played in the U.S. have increased each of the past two years," the NGF report noted.