Members will be able to tee-up on the 18-hole golf course at Hopkinton Country Club as soon as this summer.
We have just purchased the Saddle Hill Country Club in Hopkinton, a 40-year old public course that we are renovating and converting to a full-service private country club called Hopkinton Country Club. HCC will be open to its members this summer and will offer a 7,000-yard, completely renovated golf course. In addition to the course, a swimming pool, tennis courts and a 15,000-square-foot clubhouse with locker rooms, grill room and private dining rooms will be available. With waiting lists at virtually all of the private clubs in Greater Boston exceeding 10 years and with the continued growth of the metrowest area, Hopkinton is the ideal area for such a project. HCC is just 20 minutes from the Weston tolls on the Massachusetts Turnpike, which allows us to draw members from many communities west of Boston.
Massachusetts has been home to some extraordinary high-end private country club projects in the last few years. Most notable is the Rees Jones-designed Nantucket Golf Club, where pre-construction equity memberships started at $50,000 and have since appreciated tenfold. In addition to paying roughly $500,000 to tee it up at Nantucket, you now have to wait several years on a waiting list. The island of Nantucket presents an obvious anomaly, however, in that it provides the ultimate captive audience and no competition. The Massachusetts Class of 2002 in the private golf business puts Hopkinton Country Club in some very good company. We have the Tournament Player’s Club of Boston, located in Norton, opening this summer. TPC Boston is a beautiful Arnold Palmer-designed course which will also become the permanent home of the Massachusetts Golf Association. TPC Boston, a venture spearheaded by Fleet Bank, has been very successful marketing high-end memberships to individuals and corporations. Also opening this summer is Black Rock Country Club in Hingham, which has only a few remaining memberships. Black Rock is a sensational layout carved out of a former granite quarry. Both Black Rock and TPC Boston have been very successful because of location, quality of their product and timing.
Both TPC Boston and Black Rock achieved their critical mass of members during ideal economic conditions and were able to keep the momentum even through the recent economic downturn. The current economic environment is not as conducive, however, to the commencement of such ambitious, large-scale golf development projects. To build a private country club from the ground up you will need to have both permits and members in hand in order to secure financing for the project. This presents a complicated chicken and egg conundrum for the developer. In this economy it is very difficult to convince prospective members to ante up membership deposits prior to obtaining permits, especially when the grand opening of the club is three to five years away. Conversely, it is very risky to buy or option land and embark on an extremely expensive permitting process prior to selling a significant number of memberships. According to Jeff Dugas, a partner with the golf course consulting firm Wellspeak, Dugas & Kane based in Cheshire, Conn., few of the national golf course lenders are financing new construction deals. Dugas, who has consulted and conducted feasibility studies and appraisals on more than 300 golf courses, states that you must have permits, half of your memberships sold, and provide upwards of 50 percent equity in the deal before you will find a lender to finance a new-construction private club.
Although the HCC project is the first of its kind in Massachusetts, there are numerous advantages to renovating or expanding a well-located public golf course and converting it to a private country club. Effectively, this is the equivalent of buying a tired old apartment building in the Back Bay and renovating it into luxury condominiums. Since the use was pre-existing, the prospective developer does not have the plethora of land-use and permitting issues that would confront a project being built from the ground up. The condo conversion analogy also allows the developer to create cash flow by pre-selling units, or in our case memberships.
Purchasing and renovating an existing golf course will save staggering amounts of money and, in some cases, years of time due to the layers of onerous permitting that can be avoided. James G. Ward is a partner and land-use attorney at the Boston firm of Nutter, McClennan & Fish. Ward has navigated the permitting minefield of several golf course projects and has served on a Department of Environmental Protection work group charged with creating their policy for water usage at the state’s more than 200 golf courses.
In many cases there are upwards of 10 local, state and possibly federal permits required in order to construct a golf course, Ward said. In virtually all cases, since some state permit is needed, the proponent is required to file an Environmental Notification Form and an Environmental Impact Report because the area of disturbance is greater than 50 acres. The Massachusetts Environmental Protection Agency scope on these projects is very extensive.
Nature’s Barriers
The nature and extent of any wetlands on the property are clearly the wildcard when it comes to permitting a golf course project. A property laden with wetlands will add more time and money to a permitting process that can take as long as two years and cost well in excess of $1 million. Purchasing an existing course solves most, if not all, of these permitting headaches.
Furthermore, with a golf redevelopment such as this, you are working with mature turf grass and therefore you avoid the inconsistencies and problems associated with the grow-in of a new course. Spectacular turf quality can be obtained in relatively short order. In essence, smartly renovated golf projects provide for a total transformation of the course while preserving the character and nature of mature turf. This provides for market differentiation while giving the player the feeling that they belong to a course with some history. Keeping the product unique and priced properly is the challenge that must be recognized in the current golf development marketplace. The HCC will cater to golf purists, due to its redesign efforts, while also serving a wide variety of members by providing the amenities necessary to attract families who may enjoy the other social aspects of membership. The golf product will be created to adhere to the design standards found in some of the most famous old courses in New England. The architect, Ian Scott-Taylor of Wales, specializes in the design and construction of old-style courses and has been recently awarded best private club renovation accolades from the Golf Course Owners Association for his work at Jumping Brook Country Club in New Jersey. His niche is creating courses that look, feel and play like the classic designs found throughout Scotland, where he grew up playing. For HCC, this places uniqueness and value at the center of the business model.
With a less arduous permitting process and a greatly decreased burn rate, a purchase and rehab of an existing golf course is also much easier to finance. At HCC, we have sold almost half of our memberships in a very short period of time because our price is relatively reasonable, our product will be first rate and because we will be completed so quickly. Since there is already a golf course on the property we are able to tell prospective members that they will be playing golf and their children will be swimming in the pool at their own private club this summer. In an era of impatience and conspicuous consumption this is a lot more appealing than asking someone to join a club that will be in permitting for the next year and then construction for two years thereafter. It also beats the only remaining option of applying to an area club and waiting for 10 to 15 years before your name comes up. Like TPC of Boston and Black Rock, we have momentum on our side and our prospective members are prompted to join because the price might go up, or we may sell through our memberships and place them on a waiting list. We have reached our critical mass of members and we are truly at a point where we will approach sell-out if each of our current members invites a friend to join. Because these memberships were sold so quickly, albeit by word of mouth, and since we were buying an existing golf course with good cash flow, this was a much easier project to finance than a newly constructed golf course.
The advantages of purchasing an existing golf course and converting to a private club are clear. The project costs can be half of what it would be to buy raw land, permit and construct a comparable facility. It is easier to market memberships and finance the deal resulting in a much more palatable level of risk.
