Bitter first course: Woods scandal a case of indigestion for Cliffs and its founder

        The Tiger Woods mess must be tearing up Cliffs Communities founder Jim Anthony in both a commercial and personal sense.  CNBC reported yesterday it was not able to reach Cliffs spokespersons for comment about the community’s marketing video that features Woods  pitching the course and community at High Carolina.

        “With a wife and two kids,” Woods says in the video, “your perspective in life changes.  I want to have my kids experience something like this…because your priorities start changing and evolving once you have a family and I want to come up here as often as I possibly can.”

        Anthony hired Woods, a great golfer but unproven designer, for a

"...your priorities start changing and evolving once you have a family and I want to come up here as often as I possibly can." -- Tiger Woods on The Cliffs at High Mountain

reported $20 million to carve out the course at High Carolina, the latest Cliffs community.  Even before Tiger turned himself into red meat for the tabloids, $20 million seemed to many industry observers like an over-the-top bet.  It may be too early to make any decisions about what Anthony should do, but it is not too early to start laying the groundwork for a decision.  And that process should start with 30 Cliffs customers.

        No one but Tiger, Anthony and a select other few know the details of the contract, but we have to assume payments were not all front loaded for a project that will take years.  And it is unreasonable to assume that Anthony and his lawyers might have suggested a “moral turpitude” clause in the contract with the (then) squeaky-clean golf star, or that Tiger’s lawyers would have let him consider one.  The moral turpitude clause, of course, is pretty standard in contracts between athletes and team owners; it protects the owner in the event one of his players embarrasses the organization through some ugly transgression.  Serial adultery fits the standard definition of “moral turpitude.”

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The Chapel at Cliffs at Glassy


        If Tiger’s reputation does not recover fully, you have to wonder if Anthony will cut his losses and save $10 million or however much he hasn’t paid yet if High Carolina is tarnished.  Who owns the blueprints, we wonder, in the event that the tabloid spectacle proves too much for Woods or Anthony to go ahead with the project?  Woods certainly doesn’t need the money and may not want more exposure outside the well-guarded and friendly confines of the ropes at Augusta or wherever he chooses to play.

        With only about 30 lots spoken for at High Carolina, The Cliffs has made back a mere $40 million of the reported $160 million it paid for the

Jim Anthony built a chapel on a piece of property he might have sold for perhaps $3 million.

land and Tiger’s design fee.  Whether Joe Designer or Tiger finishes High Carolina, you wonder from whence will come the dozens more buyers Anthony needs to justify the development and Tiger’s huge design fee.  The market nationwide for multi-million dollar properties, let alone club initiation fees in the six-figure range, has shrunk to almost nothing.

        Tiger’s mortal failings must be at least as big a burden for Anthony as the financial hit he faces.  The developer has a reputation in the western Carolinas for high moral principles.  Look no farther than The Cliffs at Glassy to understand that he puts his faith where his money is.  At Glassy, he commissioned the building of a chapel on a perfect piece of property at the highest point in the community, with a commanding 50-mile view of mountains and valley, perhaps the best mountain views in the entire state.  Anthony probably could have sold the lot for $3 million or more.  That is how good the view is and, one assumes, how strong the developer’s religious convictions are.

        With the construction of the chapel, Anthony chose between his religious and moral convictions and his commercial interests.  He faces a similar choice in deciding what to do about Tiger’s relationship with High Carolina.  The advice here is for him to look to those 30 High Carolina property owners for guidance.  They are a small enough group that he can call them all in a couple of days.  He should share his feelings about Tiger as a way to draw them out about their own.  He will learn after 30 conversations what options he has with them, and their collective voice will imply how potential buyers will feel. 

        The customer, after all, is always right.

 

CliffsGlassyfrombehindgreen

Tom Jackson's design for The Cliffs at Glassy Golf Club is one of six courses in the Cliffs Communities.