Golf Reinvented: Clubs expand offerings to broaden appeal
Investors call reinvention of the leisure sport the path to profit, especially in metro Denver
It’s a winter weekday at the Club at Pradera and the fairways and greens have all turned golden. Yet, there are golfers playing on the course, exercisers flexing in the total body fitness class and socializers tipping glasses at Wine Down Wednesday. Members wander in and out of a trunk show in a banquet room, and the bar and restaurant are open all day.
At sister club The Pinery just down Parker Road, the tennis bubble is busy, swimmers do laps and staff prepares for Family Night. Nearby at renowned Castle Pines Golf Club, the course is closed and so is the membership (at 350). The only preparations underway are for the May 5 opening of golf season.
The buzzwords at Castle Pines, a model of the traditional golf club, remain:
Golf, Private, Exclusive
The buzzwords at Pradera, Pinery and the new generation of Colorado country clubs:
“I think most clubs are really gearing toward the family, to get mom and the kids out,” said Ed Mate, executive director of The Colorado Golf Association. “Those facilities that can offer more than just golf are in a stronger position than those that don’t.”
Call it golf-plus. Starbucks golf or golf reinvented.
In an industry that has reported closures and declines in participation for more than 10 years, investors are calling it the path to profit – particularly in the thriving Denver metropolitan area.
“We’re being very opportunistic these days,” said Blake Walker, CEO of Arcis, which began its national 70-club portfolio just four years ago with the purchase of Pradera and Pinery. “We will identify specific markets like Denver and micro-markets within Denver that we want to be part of and we proactively identify those assets and acquire them. We don’t typically participate in auctions. We really focus on organic growth, as opposed to pre-capitalization or growth via just acquisitions. Does it always work? Well, if it always worked, I guess I’d be Warren Buffet.”
It’s a classic “buy-low, sell-high,” except that Arcis (pronounced AR-kiss) isn’t selling yet.
Rather the private-equity firm, which also owns Arrowhead and Park Hill, has invested more than $50 million in upgrading clubhouses and courses to create what Walker calls “a lifestyle play.”
Wider fairways, more tees and slower greens characterize course changes that make the game easier; fitness rooms, Ping-Pong tables, take-out menus, jeans-OK dress codes and a full calendar of social activities have transformed clubhouses into community hubs.
Pradera’s gorgeous 27,000-square-foot clubhouse wants for little, but that’s not true of many other Colorado country clubs.
The Ranch, Columbine and Lakewood all have razed their clubhouses to build new ones. Even area golf’s newest private gem, Colorado Golf Club, had to spring for a new swimming pool.
Other courses and clubs have been less resourceful. Gone are Cornerstone (Montrose), Cougar Canyon (Trinidad), Gleneagle (Colorado Springs) and Shadow Hills (Canon City). New homes replaced Green Gables, and marijuana fields are being eyed to cover the grounds of acclaimed Grandote Peaks in La Veta.
The last new course to open in the state: the CGA’s CommonGround, actually a 2009 rebuild on the old Mira Vista property.
“In every decade starting in the 1900s, you saw a net positive number of golf courses opening,” Mate said. “By the end of this decade, we’ll see probably a minus-five number. That’s an amazing thing in the history of golf in Colorado.
Mate and other industry experts attribute the negative numbers to what he calls “gross, almost irresponsible, almost irrational,” booms in the 1980s, ‘90s and early ‘00s. When real estate developers increased lot values by placing a golf course in the middle of a figure-eight routing plan.
“We just built too many golf courses,” he said.
Participation couldn’t support those courses.
CGA membership dropped from a high of 47,000 to a low in 2013 of 41,500. Now, with Colorado’s population boom, it’s back up to 43,500.
According to the National Golf Foundation, the state ranks only 33rd nationally with 23,000 people for every 18-hole course, and Denver-Aurora-Lakewood ranks way down at 295th on the list of major metropolitan areas in per-capita golf.
The CGA has struck at the heart of the imbalance, partnering with the Colorado PGA and other industry stakeholders to build the Junior Golf Alliance.
“Golf is a game of a lifetime and it needs to be started at a very young age,” Mate said. “It will take a while for these seeds to germinate, and they will.”
In the meantime, supply-and-demand keeps the cost of public golf in the region low.
“We hear from people in other parts of the country. ‘Thirty-five bucks? What? That’s a really good golf course,” Mate said. “The quality and quantity of affordable public golf here is unusual.”
Some courses have added footgolf, a combination of soccer and gol, to maximize facility use and revenue.
Fees, too, are low at some of the private courses. ClubCorp, the only company with more U.S. golf properties than Arcis, offers dual memberships at the Blacksone and Black Bear, with initiation fees starting at $2,000.
And Pradera-Pinery’s menu of memberships stars at a no-refund fee of $5,000 with monthly dues at $549 with no food-and-beverage minimum.
“I have to have more members using the club more often,” general manager Heath Robberson said.
“Members pay dues 12 months of the year and I want to make them feel valued 12 months of the year. For a family looking for an all-inclusive lifestyle choice, the traditional golf club is not a good model.”
That’s not to say the traditional golf club is going away.
Said Castle Pines PGA Head Professional Don Hurter, “There’s always going to be room in the golf world for a club like Castle Pines, as an escape for people to come and enjoy themselves, entertain clients, be with friends and have a good time.”
It’s just that now, there’s a new way of doing business that requires much more than golf.