Things fall apart; the centre cannot hold. -- W. B. Yeats
"The bigger they are, the harder they fall." Some boxer or boxing writer must have uttered that, but the words apply equally well to residential golf developments. In the current environment, it is hard to see how some of the big ones are surviving. Of course, some aren't, like the Ginn Resorts organization, which is all but gone now, many of its properties taken over by the folks who did such a nurturing job in building Reynolds Plantation. That savvy group was able to pick up Ginn properties like Laurelmor in the Carolina Mountains for a song; you can bet if they had to start a Laurelmor from scratch, they would take a quick pass. Not in this environment, for sure.
If
you are a regular reader of this space, or of the Wall Street Journal, you know
about Bonita Bay in Florida and the claim by its developer that members of the
36-hole club are sending him into bankruptcy by insisting on a return of their
"refundable" initiation fees.
There are no winners in that mess; one way or the other, members and
residents are going to pay -- because they will have to buy the club from the
owner to keep it going, or give up their claims on future refunds, or ante up
some hefty assessment fees to keep the lush grasses mowed.
Against this backdrop of hardships for big, expensive, multi-course golf communities, it is remarkable that The Cliffs Communities and its eight golf clubs have managed to whistle by the graveyard. They certainly have not taken the Reynolds approach to building carefully. Sailors on a short leave could have learned a thing or two about spending from the Cliffs group in its early years. I ran communication and marketing for a Fortune 50 multi-billion dollar corporation in the late ‘90s and early ‘00s; my ad budget was not even half of of the $14 million The Cliffs was spending in some recent years. Their staff was bloated, they advertised in virtually every upscale venue, they even opened an office in Manhattan. To entice those with a lot of money to spend and an ego to match, The Cliffs loaded on the amenities, including nature trails (and on-site naturalists), the most lavish fitness and health centers, equestrian centers, and golf courses and clubhouses so extravagant that the $150,000 member fees could actually be argued as a bargain.
The capper was the design fee Mr. Anthony reportedly paid an unproven designer to lay out The Cliffs at High Carolina course. At a reported $20 million, the founder was able to entice Tiger Woods to put his name, if not his design experience, on High Carolina. Consider that Jack Nicklaus, who has his name on two Cliffs courses, is paid around $2 million tops per design, and you understand better my allusion above to drunken sailors.
I am not a big fan of passing along rumors here, but some seem credible enough to reference. According to the latest, The Cliffs will make a big announcement in the next week or two. It could have something to do with the Woods arrangement, or it could be the ubiquitous financial restructuring announcement, or it could be something else. The bet here is that, if there is indeed an announcement, it will be a combination of all three. I am rooting for Mr. Anthony to get through this; former employees tell me he is a nice man, "maybe too nice," as one put it.
Stay tuned.