The Pellucid Perspective - August 2011 - (Page 17)

THE LAST WORD enerally speaking, August is not a red-hot timeframe for breaking golf industry news. Northern operators are grinding to make budget before the frost starts appearing on the pumpkins, while Southern operators are hunkered down in the air conditioning hoping favorable fall and winter weather will make golfers forget the 100-plus degrees that the Sun Belt is suffering this month. This month is no major exception to the slow news rule, but there have been a few interesting developments. The two biggest players in the mercurial Myrtle Beach golf market are in the process of forming a new company that will immediately become approximately the 15th largest U.S. course operator. The new company, not yet named, would incorporate the 14 Myrtle Beach area courses operated by the Myrtle Beach National Company with the 10 managed by Burroughs & Chapin Company subsidiary B&C Golf Management for a total of 24. Burroughs & Chapin Executive Vice President Bob Swezey said the move, which is still being finalized, would be “not only defensive in creating synergy for the two entities, but offensive as well,” referring to the two groups’ commitment to bringing golfers into the Myrtle Beach market, offering significant package and play & stay programs to visitors, etc. The area has been hit hard by discounting, and the new entity hopes to combat rate attrition with added value options and strength in numbers. On the other side of the country, San Diegobased I.R.I. Golf Group CEO Jeff Silverstein has quietly changed his company identification, shifting the I.R.I. properties to the portfolio of a new ownership group called Old Pueblo Golf Partners. For the most part, if not entirely, it’s “new boss-same as the old boss,” with Silverstein still the managing partner of the Old Pueblo entity, with most if not all of the same investors. While there had been at least one unsubstantiated report that I.R.I. had initiated bankruptcy proceedings, Silverstein denied that, saying that I.R.I. is still a legal entity, just no longer an operating entity. While the bulk of the I.R.I.-cum-Old Pueblo portfolio consists of courses on its Wildcat Trail in Arizona and its Carolina Golf Trail, the company has all but vanished from its former Texas stronghold, with just one course remaining under operation there. www.PellucidcorP.com A few changes of note in August’s dog days G As golf course sale prices continue to decline, some buyers have come off the sidelines, although with lenders still shying away from all things golf, most purchases are all-cash deals. Former Arnold Palmer Golf Management boss Peter Nanula pulled the trigger recently on a $3.75M purchase of Heathrow Country Club in the Orlando area in July, for his newly formed equity group, Concert Golf Partners. Nanula, who has said that his group has up to $50M to invest in course buys, is reportedly looking at two additional buys, in Florida and Arizona, with a long term portfolio goal of five to ten courses. One seemingly unlikely buyer is homebuilder Toll Brothers, which has historically built courses, not bought them. The company purchased two golf clubs last year, both with some undeveloped real estate, but golf and country club division president Dave Richey says he has the go-ahead to buy clubs that offer no land for development, and is looking at some of those now. Another familiar buyer which is reportedly ready to re-enter the fray is CNL (Hospitality, Income, Lifestyle – whatever they’re calling themselves by the time you read this). The firm has rounded up a substantial new REIT which will reportedly begin selling later this month, and also reportedly includes some dollars earmarked for golf courses. If CNL does indeed get back into the buying business, that bodes well for not only desperate-to-sell course owners but the course management firms whom CNL, as a REIT, will have to turn to for operation of those courses. As golf course sale prices continue to decline, some buyers have come off the sidelines, although with lenders still shying away from all things golf, most purchases are all-cash deals. Happy anniversary to us The Pellucid Perspective staff is proud to announce that this is our 1-year anniversary issue,marking our 12th monthly issue. And they said it would never last! We remain grateful to our loyal charter sponsors – Club Car, GolfNow, KemperSports and ValleyCrest Golf Course Maintenance – and invite other golf industry leaders from different sectors of the industry to help us bring a different (unbiased and independent) perspective to the key issues affecting this industry which delights and frustrates us all. If you’re not a Nigerian spammer and would like to reach 25,000+ industry recipients, drop me a note or give me a call (see pg. 3). —Jim Dunlap The Pellucid PersPecTive 17 http://WWW.PELLUCIDCORP.COM

Table of Contents for the Digital Edition of The Pellucid Perspective - August 2011

The Pellucid Perspective - August 2011
Contents
Why cost cutting doesn’t yield long-term prosperity
Get Golf Ready showing some traction
Danger, Will Robinson!
Golf holding up but heartland hammered by weather
U.S. golf course development dead, or just sleeping?
Whither the weather
Miami/Ft Lauderdale, FL Core Business Statistical Area (CBSA)
Comings & goings
A few changes of note in August’s dog days

The Pellucid Perspective - August 2011