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Golf courses suffer as recession deals a bogey

Hundreds of courses have closed, and once-exclusive country clubs have slashed fees or let in the public. Often linked to housing tracts, the greens and fairways have slumped along with real estate.

November 22, 2009|By Roger Vincent

About 30% of the courses that opened in the 1990s were connected with residential developments, said Jim Kass, director of research for the Florida-based National Golf Foundation. This year, 70% of new golf courses were part of the few projects coming out the end of the development pipeline.

In spite of all the financial setbacks experienced by operators, however, golf courses themselves have a knack for enduring, even if it's under new ownership.

The Jack Nicklaus-designed Escena Golf Club in Palm Springs, which opened in 2005 as part of a housing development, closed two years ago when one of the home-builder owners ran into financial problems. A new owner took over the debt and expects to reopen the course this week as part of a push to sell homes again.

The owners of Palm Desert Country Club in Palm Desert managed to secure an operating loan in the last few weeks that has allowed them to start reseeding and watering, said Larry Kosmont, one of the owners. He plans to reopen the main course Dec. 4.

"It's a very tough economy for golf courses," Kosmont said, "but we persevered."

To boost business, many private clubs are offering no-interest loans to help the less-well-heeled buy memberships, and public courses are rolling out the equivalent of blue-plate specials, including cheaper rates for off hours and discounts on lessons and merchandise.

Some think heavy discounting is a mistake.

"The trend of downward rates in the golf industry has been the real cause for many courses failing," said Mark Tansey, president of Palm Desert-based Sunrise Golf Inc., the company that will run Escena for its owners. "Too many inexperienced operators are using price as a blunt instrument to generate activity."

Not that golfers are protesting.

Dwain Richardson, a hospital food director with an 18 handicap, enjoys the "twilight" specials at the Tahquitz Creek Golf Resort in Palm Springs. By starting midafternoon he can usually play 13 or 14 holes before it gets too dark to see. He pays only $29 and gets the use of a golf cart plus two free drinks at the bar.

Low prices keep golfers like him coming out, he said, which could cement new habits.

"I would play every other day if I could," Richardson said. "I can see why people get addicted."

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