When a 500-unit subdivision golf course fails and grows in millions in property value goes down the drain! The losers are the golf course owners, homeowners, cities, towns, municipalities (property taxes), and mortgage bankers (foreclosures) - not to mention the golf course employees, services and suppliers.



Are you living in a golf course residential neighborhood? Make sure every homeowner in your development reads this article. Golf course views or not. Every property stands to lose!


I can't believe what I'm seeing. It is an absolutely stunning example of the stupidity of human beings! I mean, when the neighborhood golf course closes and grows in EVERY STAKEHOLDER LOSES! Why the hell is it almost impossible to address the problem with a mutual interest? Mike Kahn






The scenario accounted here is an actual event. Names and locations were changed for the purpose of a recent account where a 500-unit residential subdivision stands to lose up to $75 million in property value if their neighborhood golf course closes.




The mission of Bill McIntosh, Michael Kahn, and Cameron White (Consultants) is to provide experienced guidance to the XYZ Golf Club Homeowners Association after the owner of the XYZ Golf Club Golf Course reached out to them asking for greater participation in the golf course business. Apparently, the golf course owner was complaining about cash flow losses due to lack of support from XYZ Golf Club residents. The golf course owner was asking the HOA to provide funding to cover his losses.


 The overall issue at XYZ Golf Club and its neighborhood is the possibility of a complete failure of the golf course which would result in a catastrophic loss in the development's residential property values. Evidence around the USA has become abundantly clear that residential property values can drop from 20% to over 40% when the center of the community, the golf course, closes and grows in. Not only losses in property values but increases in neighborhood crime, overgrown fairways become fire hazards, plus the fairways become overrun with varmints like rats and snakes making life in the community almost unbearable.


Therefore, it is the experience of Consultants that the HOA and the golf course owner should have a ‘meeting of the minds’ based on a mutual interest. The goal should be to preserve the integrity of the neighborhood in perpetuity, which means the golf course should exist in good health forever.


The problem Consultants encountered at XYZ Golf Club was a reluctance by the golf course owner to allow any analysis of operation of the golf course. In the experience of Consultants, Kahn, McIntosh, and White each having owned and managed golf course in many areas of North America, that the HOA deserves to understand the issues the golf course is facing if they’re being asked to make a financial commitment to save it.




 On an evening in June, Consultants had a conference conversation with An HOA board member. The board member was an XYZ Golf Club HOA board member, a member of the golf club, and a paid professional golf instructor.


 Our conversation with The board member went on for an hour and 22-minutes. We were trying to get the most up-to-date information before our visit to the development. The HOA member we spoke to had intimate knowledge of the XYZ Golf Club golf course, its history, current business atmosphere, etc., which was highly useful for Consultant’s research. Some information we learned identified some of the issues we needed to address.


During our conversation the board member indicated that the fourth nine holes were intentionally designed so difficult that nobody wanted to play it. It was indicated that the fourth nine was located at great distance from the clubhouse and the maintenance facility, “Fifteen-minutes just to get to it!” We also learned that the fourth nine-hole course is poorly maintained.


The board member indicated that the original 18-hole XYZ Golf Club golf course hosts many outings and tournaments and that the clubhouse restaurant is substantially busy. Overall, although without saying it, it sounded like the original 18-hole XYZ Golf Club golf course was quite prosperous. The board member indicated that the clubhouse manager is the owner’s wife, described as a very hard worker, and found present in the clubhouse at all hours.


 The board member indicated that several members of the owner’s family were either employed by the golf club or were involved in building houses in the XYZ Golf Club development.


The board member indicated that the owner was well connected with the City of Pine Grove, and was the principal in a proposed a major development in the city. The board member hinted that the Golf Course Owner might be strapped for cash, which may be why he is appealing to the HOA for ‘participation’ money of up to $300,000 (the amount indicated to Consultants in conversation with another board member).


The HOA board member discussed some of the competing golf courses in the area and other golf courses owned by the XYZ golf course owner. The board member, indicated accounting experience suggesting that the other golf courses owned by the owner might be profitable at the expense of XYZ Golf Club (the owner indicated to consultant, Mike Kahn, in a brief phone conversation with Kahn earlier, that his other golf courses were profitable).


In Consultant’s experience, it is not uncommon for golf courses located near each other and owned by the same entity to share equipment, staffing, and supplies. According to the board member, the golf courses owned by the same owner were managed by a single general manager from an office at XYZ Golf Club.




We indicated in a preliminary report that it was only our initial opinion at the early stage in our investigation of the XYZ Golf Club golf course and its appeal for participation money from the HOA. Therefore, we initially (naturally) suspected that the HOA may be being approached by the XYZ Golf Club owner for funding for what might be a poorly planned and possibly poorly managed golf course business. In fairness to the owner, he is not an experienced golf course person and likely did not appreciate what he bought when he acquired XYZ Golf Club. The first problem in the eyes of the consultants is that the golf course consisted of four nine-hole tracks, the worst one being the course called the ‘Tough’ nine that the HOA board member indicated in our conversation was that it was designed especially difficult. "It was so difficult that nobody would play it."


Based on what the consultants have learned to date, and based on both consultants experience on what it costs to run and maintain golf courses, a good portion of the XYZ Golf Club financial losses may be the result of having to maintain 36-holes when 18, or even 27-holes is all that is needed. For instance, if the overall golf course maintenance budget for 36-holes is, say, one million dollars, it means each nine holes cost $1/4 million (average) to maintain. Therefore, abandoning the Tough nine holes altogether should easily find $250,000 of the $300,000 losses the Owner indicates he is suffering. Our question is, “Why should the neighbors be asked (or bullied) into coughing up cash to maintain a nine-hole golf course that was a mistake to begin with and is of no positive consequence whatsoever to the business?”


It is the experience of the consultants that the remaining $50,000 in annual losses indicated by the Owner ($300,000 is the number Mike and Bill have learned) can be found by the consultants in many ways. However, Kahn, McIntosh, and White are not allowed by the owner to apply their 100+ years of experience to conduct a proper analysis of XYZ Golf Club Golf Club. In fact, The Owner has made it quite clear that he does not want any consultants at XYZ Golf Club. His refusal to be candid about how the business is managed raises a red flag in the experienced opinion of Kahn and McIntosh. Without an analysis of XYZ Golf Club, the lack of openness means there will be no data to lay out to the HOA that could support the Owner’s argument. Without an analysis conducted by Kahn, McIntosh, and White (or some other such experts), it is the opinion of Consultants that the HOA should refuse to negotiate without openness from XYZ Golf Club’s owner - probably based on a 'trust' factor.


The owner must realize he is asking to form a partnership with the HOA. In order for any partnership to function properly, both parties must be open and straightforward. The Owner’s unwillingness to do that is problematic. Granted he is a private business, however he is asking an outside entity to contribute hundreds of thousands to his business without offering some form of accountability.




The general analysis of the golf course owner VS the HOA dilemma centers around a trust factor because the course owner refuses to show his business to make his case. However, we all know there are people living in the neighborhood who don't play golf and refuse staunchly to contribute in any way to the golf course. Therefore, consultants, Kahn, McIntosh, and White try to spread all the details clearly on the table. There are at least five stakeholders in the golf course VS HOA dilema.




1 - Residential Property Owners


2 - Banks that Hold Mortgages on Residential Properties in the Development


3 - The Municipality


4 - The Golf Course Ownership


5 - Employees, Services, Suppliers to the Golf Course



1 - Residential Property Owners

When a residential neighborhood golf course fails, five stakeholders suffer losses. At the top of the list is the homeowners because they’ll experience an immediate loss in the value of their property from 20% to as high as 40%. For some homeowners, even a 20% loss in property value can put them in an upside down position with their mortgage.

2 - Banks

Next big losers will be the banks that hold all the residential property mortgages. Losses in property values will trigger many mortgaged homes into foreclosure - according to the fine-print. If the bank repossess a home, they often take a hit the face value of the mortgage because they are often forced to dispose of the property for whatever they can get.

3 - Municipality

The local tax assessor will need to reassess residential properties downward to reflect their their current market value. In the XYZ VS HOA case there are 500 homes in the development, so if 500 X $½ million dollar homes drop 30% (average) in value due to the closing of the golf course the collective reduction in assessed value can be as high as $75 million. The result is reduced tax revenue for the municipality, as much as 30%, which puts a strain on local government services. A quick calculation indicates the municipality will lose over $1 million a year in real estate tax revenue when the golf course fails.

4 - Golf Course Ownership

Golf courses created since 1990 cost anywhere from $4 million to as high as $12 million depending on several factors (of course). Regardless, the golf course owner will lose up to 100% of the investment to own the golf course. Remember. Most golf courses permitted since 1990 gave up all other land rights in the permitting process, so the lands have virtually no redeeming value to the owner. For the owner to walk away, the loss will be whatever the owner originally invested into the property – likely in the millions.

 If a bank mortgage is involved on the golf course, then the bank will also take a hit.

 5 - Employees, Services, Suppliers

 Golf courses may employ anywhere from twenty to more than fifty persons full or part-time. Employees are needed in the pro shop, kitchen and dining room, and to maintain the golf course.

 Golf courses are served by many different sources like pest control, security, waste removal, phone, Internet, accountants, insurance companies, on and on.

 A typical accounts payable list may include as many as 100 or more suppliers like fertilizers, golf course supplies, fuel, food, beverage, score cards, merchandise sources, advertisers, on and on.

 This group is not materially involved in the solution process and won’t be invited participate in the planning activity. However, if a business with over $2 million in annual sales closes people will be out of work, services will lose business, and so will suppliers.


 Once the stakeholders realize their mutual interest in the plight of the golf course affects each one - negatively or positively - they can find themselves on the same page. Once on the same page they can form a beneficial relationship and come up with a plan to solidify the future of the neighborhood for 100-years.

 The work of consultants, Mike Kahn, Bill McIntosh and Cameron White, is to act as liaison, arbitrator, adviser between the stakeholders to come up with a mutual plan that assures the golf course and the stability (integrity) of the neighborhood remains healthy forever.

 It can be done.


 Consultant, Mike Kahn, has been fielding calls and inquiries from concerned residential property owners from all around the USA. What is so puzzling to Kahn is the lack of cooperation between the stakeholders when, in fact, they share similar fates. Instead, the HOA tells the golf course owner to jump in the lake. The bankers bury their heads in the sand. The municipality doesn’t want to talk about it. The golf course owner only begs the HOA to support the golf course. The employees, services, and suppliers can only sit helplessly and hope.

 Mike Kahn believes XYZ Golf Club, in the face of catastrophic losses in property value due to the demise of the golf course, can easily right the situation with very little effort. It needs to start with a spirit of cooperation rather adversarially. If everyone loses if the golf course closes, then everyone is on the same page.


 These consultants are not threats to the golf course. Kahn, McIntosh and White are among the most experienced golf course business experts in the world. The mission is to see the golf course owner prosper. Of course, if the golf course prospers, the neighborhood remains healthy and everybody - Bankers, Municipality, Homeowners, and the Golf Course Owner - are happy because nobody loses.

 Why the hell does this message fall on so many deaf ears?

 If the solution is put together properly, with the experienced advice of consultants, the golf course, neighborhood, and all stakeholders can rest easy for fifty years.


 XYZ Golf Club will set an example - one way or another. The neighborhood can fail, or it can permanently prosper. Up to $75 million in property value losses are at stake.

 Imagine never worrying about the golf course again.

 I suppose we’ll see.


 We have more or less assumed that the ‘Tough’ nine holes located at the north side of the property can be eliminated. It will save the golf course operational expenses at least $200,000 a year - more likely up to $250,000. The saving by closing the redundant nine holes would almost put XYZ Golf Club Golf Club at a break-even point.

Consultants believe the homeowners should support the golf course owner if he closes the Tough nine holes so he can develop whatever portion of the land he can. Our view of the Tough nine on Google earth indicates that no existing XYZ Golf Club residence will lose any of their current views if the north side of the property is developed.

Consultants also suggest the creation of a social membership to the golf course applied to every XYZ Golf Club property at a rate of only $1.00 per day per household, which will add up to $180,000 in net revenue annually to the golf course.

 But they need something in return for their social membership commitment.

 In return for the social membership to XYZ Golf Club Golf Club, homeowners and their house guests will have special clubhouse privileges and access to a to-be-added fitness room. Consultants also suggest the XYZ Golf Club Golf Club should add a swimming pool and Har-Tru clay tennis courts. The added amenities provide the homeowners paying $1.00 a day with a benefit for their social membership fee. The only pay to play facility would be the golf course and practice range.

 The additional facilities added to the golf club - swimming, fitness room, tennis will come at a cost from $1 million to $1.5 million. However, the added amenities become the reward to the homeowners for becoming social members and agreeing not to oppose the owner's development of the Tough nine lands.

 Once all the above is accomplished and in place, XYZ Golf Club would become a stable neighborhood forever. Instead of home values dropping, home values in a permanently secured neighborhood will increase in value.

There is so much to be gained by cooperating rather than fighting.

There’s a lot more cooperation needed in detail, which may actually be added into the CC$R documents. There may need to be an oversight board of some sort to advise and assure their social fee commitment is properly ‘managed’ by the golf course ownership.


Consultants, Kahn, McIntosh, and White have experience in setting up a comprehensive plan that all sides can happily adopt. Mike Kahn can provide an example of a golf course neighborhood that was properly organized from day-1 (termed a ‘bundled’ community). It is a community that flourished even during the real estate crunch of 2008. The future of the golf course and integrity of the neighborhood were never in doubt.

 Consultants Kahn, McIntosh, and White want the opportunity to help solve the XYZ Golf Club dilemma - and any other anywhere in the USA.. 

 Mike Kahn, Golfmak, Inc. golfmak.com, mike@golfmak.com, 941-739-3990.