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by Max Gunderson
Looking for a bargain? Have you ever wanted to own your own golf course? How about one in sunny Arizona? Yes, it seems that even the stuffy snobs at the country clubs are feeling the effects of the current recession. Recent sale prices for golf courses in Arizona have fallen to as low as 10 cents on the original developers’ dollar. Many investors are wanting out of their investment in area golf courses as the golf courses are simply not able to turn a profit.
Many of the same factors that are affecting Phoenix and Tucson area businesses are making the difference at several local Arizona golf courses. Arizona golf course owners and their investors are getting financially pinched from all sides: Tourism in Phoenix, Tucson, and all parts of Arizona is on the decline, fewer daily and weekend Arizona residents are playing golf, utilities, water, and labor costs to run the Arizona golf courses are up, these factors coupled with excess competition from other golf courses struggling to make ends meet have forced course owners to lower membership fees and offer deals on greens fees.
The good news is for the consumers, as many Phoenix and Tucson, Arizona residents are finding golf to be a more affordable option than it used to be. The number of rounds being golfed is down both nationwide and in Arizona. That combined with lower green fees and membership dues leave many public and private golf courses on the brink of bankruptcy.
The struggle of Arizona golf courses has not gone unnoticed, many Arizona banks and lenders have carefully watched with a worried eye as Arizona golf courses have searched for ways to make their courses turn a profit. Many Phoenix and Tucson, Arizona golf courses are facing the challenge of coming up with funding as they have needed to borrow additional operating capital just to stay in business. Adding to the challenge is a decision by some Arizona lenders and banks to place golf courses on their “toxic-asset list,” which means that Arizona banks and lenders won’t consider lending money for a Phoenix or Tucson area golf property under any circumstances.
Pardon the pun, but many Arizona area golf courses are finding themselves in the deep rough. Golf courses throughout the nation (including Arizona) are facing dire financial times, some golf courses find them on the brink of filing for bankruptcy protection.
Consider these facts:
•The number of golfers fell about 3% nationally in 2008 from 2007, while the number of “core golfers” — those who play eight or more rounds a year — fell 4.5%, according to the National Golf Foundation (NGF).
•Private-club memberships nationwide stand at 2.1 million — 900,000 below the peak of 3 million in the early 1990s. (There are 27.1 million golfers in the U.S. now, down from 30 million in 2005, the NGF says.)
•Golf rounds played nationally to date this year are down 3%, according to Golf Datatech.
•Sales at private golf courses and country clubs — which include membership fees, equipment, merchandise, and food, for example — were down 3% last year, and things are expected to be worse this year, says Sageworks, a company that tracks private businesses’ sales.
Consequently, as many as 15% of the roughly 4,400 private clubs nationwide reported serious financial challenges, (some of these are clubs in Arizona) and at least 500 nationwide golf clubs are scrambling to raise their cash flow, according to a recent survey by the NGF.
Private clubs lost an estimated 5% to 15% of their members last year, costing clubs, on average, $187,000 in annual dues, says Jim Koppenhaver, president of golf-consulting firm Pellucid.
Last year, 140 of the nation’s roughly 16,000 golf courses closed, while 50 new courses opened, the NGF says.
If the struggles of the Nations and Arizona area golf courses sound all to familiar to you or if you are facing some of the same financial struggles in your life, maybe you should consider contacting an Arizona bankruptcy lawyer to discuss your financial options.
To find out which of your debts may be able to be eliminated through bankruptcy, you can either visit one of our Tucson and Phoenix area offices for your FREE consultation or set up a FREE Phone Consultation with one of our helpful Phoenix or Tucson bankruptcy lawyers. Schedule you free consultation today by calling (480) 263-1699 or (520) 306-8729 or by visiting us on-line at: http://www.bankruptcy-az.com.