Jim Cullis and investors have the closed golf course under contract. Reopening the course is an option that will be evaluated, but other uses are more likely. Local residents’ input will be important.
Palm Coast, FL – October 10, 2013 – Jim Cullis, head of Grand Haven Realty and former Landmar executive has placed the Matanzas Woods golf course in Palm Coast under contract. The deal is in the due diligence phase. Options on what to do with the property are limited.
Designed by Arnold Palmer and Ed Seay, Matanzas Woods has been described as a "beautiful monster" and was once named one of Golf Digest’s "Best New Resort Courses". It was one of Palm Coast’s four original golf courses along with Palm Harbor, Cypress Knoll and Pine Lakes. Palm Harbor, after being operated by Lowe Development, is now a municipal course owned by the City of Palm Coast. The other three were bought in 2004 by Landmar and reconstituted as the Grand Club.
Landmar planned to close one of the three courses each year for improvements. Cypress Knoll was first. The Gary Player-designed course was redone and a new clubhouse built. Pine Lakes, originally designed by Arnold Palmer, was next. It reopened after course improvements with a remodeled clubhouse.
Last on the list was Matanzas Woods. Many think that Matanzas was the best course in the area; certainly the best of the original four courses. Its renovations were to be the most extensive with parts of the course being rerouted with new holes and a new full-service clubhouse. The complexity of the new plans dragged out the permitting process. The real estate bubble burst, the project stalled and the course remains closed.
Landmar, part of Crescent Resources, went into chapter 11 bankruptcy in 2009. Its local holdings were gradually sold. Golf Group of Palm Coast bought the Pines Course, Cypress Course and Matanzas Woods in 2011. The Golf Group has admirably kept the closed Matanzas course from becoming overgrown, but as each year passes, the likelihood of Matanzas ever reopening as a golf course fades.
Cullis faces challenges. The golf industry is still in a prolonged recession. Courses have relative fixed costs. They must be maintained regardless of how many rounds are played. Golf is predominately a discretionary income funded activity. There hasn’t been much discretionary income around lately. And demographics are changing too. Younger people are less inclined to take up the game.
Nationally, the number of rounds played has been dropping for years. The number of courses closed each year exceeds the number of new courses opened. Some estimate that the industry is still overbuilt by as much as 15%.
The City of Palm Coast acquired the closed Palm Harbor course at no cost from Centex and spent about $5 million rebuilding the layout with a modest “temporary” clubhouse. Only a few years later, the fully operational Jack Nicklaus-designed Grand Haven Golf Club, including its large clubhouse on the Intracoastal Waterway, sold for less than $2 million. Palm Harbor, with no debt repayment, is operating this year with a projected deficit of $100,000.
Formerly private local courses have reluctantly reduced or eliminated initiation fees and begun to offer “outside” memberships. Grand Reserve, a daily play course, is operating after a foreclosure. The Grand Club reportedly has suffered from a significant membership decline. It’s hard to justify spending millions to rejuvenate Matanzas Woods golf course.
The Matanzas area lacks the recreational facilities found throughout much of Palm Coast and Flagler County. No water features. No trail system. And for the past several years, no golf course. If a golf course is unlikely in Matanzas Woods’ future, are there other realistic possibilities? Here’s what I see; starting with the least desirable and moving up.
- Financial pressures could force the existing owner to reduce or cease maintenance activities, resulting in the course property becoming increasingly overgrown, unsightly and perhaps dangerous.
- The 277.4 acres are designated as Greenbelt in the city’s Comprehensive Plan, meaning that the golf course can be replaced with low density housing; one residential unit per acre. That means that up to 277 homes could be built, each on a one-acre lot.The disadvantage of the one/acre plan is that such development is very inefficient. Infrastructure will be more expensive to build and services more costly to provide. This option would likely have significant visual impact on residents that border the golf course property.
- The property is zoned MPD (Master Planned Development). All other options will require city approval with an opportunity for local residents to weigh in with their opinions. One possible scenario is a development order permitting the entitled units to be clustered so as to minimize the visual impact on existing residents while converting the larger green areas into passive parkland. A trail system and access to the city’s fresh water canal waterways might be possible.
Cullis understands the challenge and knows that buy-in by local residents will be important. These same residents have been dealt a lemon – not of their making. Will they be satisfied with making lemonade? If not, the less desirable options become more likely.