In praise of a member-owned community

         We received the following thoughtful letter from Mike Tower, one of our faithful readers and a resident of Champion Hills in Hedersonville, NC, a community we have visited and liked.  The letter is a response to a topic in our February newsletter and echoes advice we have offered here many times.  Thank you for taking the time to share your thoughts, Mike.

 

        I read with deep interest the article you wrote about the demise of the era of big name designers attracting immediate investment and ensuring long-term value.  I could not agree more!

        We moved from Florida to the North Carolina mountains five years ago.  We looked long and hard at The Cliff's communities and, frankly, they had a lot of appeal in offering multiple top-name designer golf course

membership and tons of other amenities.  However, the price of real estate was just staggering compared to many other options.  We ended up buying a home and membership at Champion Hills in Hendersonville.  The cost of the home and membership combined were about half of what it would have cost for similar property at the Cliffs.  I honestly didn't even consider the real value we received as a bonus.  I mean, we do have a Tom Fazio designed golf course that he calls his home course.  Yes the course is highly regarded...now ranked #5 in North Carolina by Golf Digest for 2009/10.

        But the real value is that the club and POA are both 100% member owned and managed with no debt and very healthy cash reserves.  We are currently about 75% built out with over 300 homes completed.  Our likely total build out will be around 375.  With a total membership cap of 285, we likely will have a waiting list for memberships in the future.  What I have learned is that the real risk in buying into one of these dream designer communities is to do so in a community that is developer owned.  As we have all learned, and I'm afraid will continue to learn at an accelerated rate, the only safe investment is in an established club that is member owned and highly solvent.

        As I write this, I am sitting in a rented condo in Palm Coast, Florida where my wife and I came to enjoy a couple of months of warmer winter

weather.  We rented a beautiful new three-bedroom condo at one of the Ginn-developed properties.  In our building, there are 40 units on eight floors, all with private elevators and beautiful golf and ocean views.  As far as I can tell, based on lights at night and the number of cars in the underground garage, only four or five are occupied!

        The number of properties for sale/rent/lease here and at adjacent communities is just staggering.  Prices are as low as they likely can get....Ginn is even offering no-initiation/no dues for two years memberships...and even that does not appear to be working.  That tells me that even folks with money are unwilling to take risk because the downside likely remains huge.  What happens to the existing members and property owners when the maintenance and management costs keep going on without a source of outside money?

        I think you could provide a wonderful service to your readers if you put together a list of clubs/communities like Champion Hills that do have great golf courses, completed amenities, and are financially very healthy.  Maybe you could develop a list of questions to be considered before you even begin to look at properties?

        Take care and thanks for your insights.

        Thank you, Mike.  We will have more to say about stable and mature communities in coming weeks.

Champion Hills has but one 18 hole course that is well used, well supported and owned by its members.