The debate over the failed sale of the closed Matanzas Golf Course prompts another look at local course values.
Palm Coast, FL – January 7, 2014 – A December 30th GoToby.com article, Jim Cullis Pulls Out of Matanzas Golf Course Sale, elicited several strong reader comments. They prompted me to do a follow up on an article from two years ago about the declining values of Palm Coast’s golf courses. The local picture is not unique.
The 2008 tax year saw the peak for Flagler County with a total taxable property value of $11.1 billion. Five years later, the county’s 2013 taxable value had dropped 44.3%to $6.2 billion. The most recent year actually showed a 0.8% increase.
Flagler County golf courses did not fare so well over the same period, continuing to decline through the 2013 tax year.
|Palm Harbor (Muni)||2.17||0.68||-68.7%|
|Hammock Dunes Links||17.34||2.73||-84.4%|
|Hammock Dunes Creek||5.35||1.14||-78.7%|
|Hammock Beach Ocean||31.72||4.23||-86.7%|
|Hammock Beach Conservatory||8.49||3.91||-53.9%|
Assessed values include clubhouses. Grand Haven has a 9,517 SF clubhouse. Cypress has 5,736 SF, Pine Lakes has 18,368 SF, Hammock Dunes Links has 35,566 SF, Hammock Dunes Creek has 4,383 SF, Hammock Beach Ocean has 38,562 SF (includes lodge rooms), Hammock Beach Conservatory has 38,834 SF
Assessed Value of all Flagler County Golf Courses
- The City of Palm Coast paid nothing for the Palm Harbor Golf Course which was assessed for $2.1 million. The city then spent roughly $5 million to rehabilitate the course. The city will lose about $100 thousand operating the course in 2013.
- The Grand Haven Golf Club which carries the Jack Nicklaus Signature designation, sold for $1.5 million (plus other considerations) in December 2011. Grand Haven was assessed for $6.6 million in 2008.
- The current value of the area courses reflects the lack of potential buyers. If industry experts envisioned a market turnaround soon, they would be snapping up today’s bargains. And as long as course prices remain well below replacement cost, there is little likelihood of resurgence in the construction of new courses.
- The Grand Club, including Cypress, Pine Lakes and the closed Matanzas courses was purchased for $2 million from bankrupt Landmar in 2011. Landmar paid $10.75 million for the three courses in 2004 when Matanzas was open and thriving.
- The Grand Reserve has not paid property taxes for 2013 or for the two previous years totaling $42,739. The course was taken back by the lender in 2011.
- Hammock Beach’s Ocean Course currently carries a $4.2 million appraisal. Lowes sold the Ocean Course to Centex in December 2005 for $35 million. Centex resold the course one year later to the Ginn Company for $37.7 million. Today, the total assessed value of all ten courses in the county is less than half what Ginn paid for the Ocean Course seven years ago.
- Baby boomers were a key component in the theory of an ever-rising market. The Great Recession upset that theory. The first wave of boomers to arrive after the market tumbled found that they could enjoy golf a la carte, paying discounted rates for quality courses forced to accept day play to pick up incremental revenue. That wave of boomers and perhaps many to follow have been forever lost as potential club members.
This analysis is meant to shine light on the economic realities of the U.S. golf industry and its effect on local constituents. It will probably do little to change the mindset of those on either side of the Matanzas debate.