If you build it (the golf course), will they (members) come?

    Times are tough enough for private golf clubs, even those connected to big real estate development projects (especially those).  To attach strings like mandatory membership to buyers of lots adjacent to the community's golf course seems like a rob-Peter-to-pay-Paul proposition in the current buyers market.  A developer with such a policy could wind up selling neither the membership nor the lot to prospects who, in this climate, are not happy being told what they can and cannot do.

    Now, according to an article at the Golf Digest blog site Deeds and Weeds, at least one developer has gotten the message.  A Lake Tahoe golf community builder has decided to sell let the real estate sales take care of themselves.

Membership without ownership

    "The old model for most of these things is to have a highly amenitized real estate project and require a real estate purchase as a condition of membership," said Clear Creek Tahoe Golf Club developer Jim Taylor.  "We're going to try and reach out and invite a great group of members to join -- not obligating them to purchase real estate, [but] simply join the club."

    Necessity is the mother of this invention.  Clear Creek, which opened July 1 and has a total initiation fee of $50,000, has sold just 23 memberships.  "If we required them to buy real estate," Taylor said of those potentially interested in a club membership, "[they] would not consider joining."  This approach, Taylor added in the interview with Deeds and Weeds, "allows us to put together a membership that's driven by the membership and not just because you bought a piece of real estate.  It's a different mix of people."

Clear Creek Tahoe Golf Club has abandoned a plan to "force" new property owners to purchase a golf club membership.  The two-month old course was designed by the well-regarded team of Coore & Crenshaw.  Photo courtesy of Joel Stewart.

The rich get poorer

    Time will tell if the new approach works, but it strikes this observer that business models that force homeowners to buy memberships, or members to live in the surrounding communities, may be approaching extinction.  The Cliffs Communities, the lush string of communities in the Carolina mountains that boasts an upcoming Tiger Woods course, have been successful in forcing homebuyers to kick in a six-figure membership in the golf club after plunking down many more multiples of that for a home site.  But that was in an economy and market far more robust than the current one.  The population of hedge fund manager millionaires has dropped considerably.

    Maybe The Cliffs model is too entrenched to change, but innovative developer Jim Anthony might actually sell more

real estate if he offered, say, $50,000 "non-resident" golf memberships.  If the non-resident members fall in love with the golf -- they very well may, based on my own visits to four of the Cliffs courses -- the chances of a property purchase later would seem higher.  Someone willing to plunk down multiple thousands of dollars in initiation fees is certainly voting with his/her wallet an interest in the area.  Transitioning from club membership to the purchase of a lot nearby seems a more natural and less stressful choice than buying the lot and having 30 days to decide on club membership.

Play first, buy later

    I preach here often about the wisdom of choosing a community where all amenities are either built or where the money has been escrowed to make sure they will be built.  Golf courses are traditionally the first amenity in place in a golf community, but that is no guarantee the course will attract enough members to make it viable.  By joining a golf club before you purchase a lot inside the community, you are hedging your bets.  You can watch to see if others follow suit and populate the club with a full roster of members.  You can also test the golf course over time, making sure that it not only suits your game but also that its upkeep is up to your own personal standards.

    The buyers market forced Clear Creek Tahoe's hand, and it may do the same in a growing number of communities.  Even in those developments where membership has always been mandatory with a home site purchase, or where only residents qualify for membership, it doesn't hurt to negotiate your own deal.  You will find all but the most cash-rich developers ready to at least listen. 

    If you want me to ask the questions for you, let me know what community you are interested in.  Or if you want to chat about what communities might suit you best, I am happy to do that as well.