What is the value of living on a golf course? Michael Rosenberg isn’t sure. And though he doesn’t play the game, he likes the idea of sitting on his deck and looking out at serene green fairways, not someone’s rusty barbecue pit or swing set.
It’s why he bought his home on the Calusa Country Club in South Dade, paying a premium for his four-bedroom home.
Now the view is not so lovely. The golf course, purchased in 2003 by a company connected to Facundo Bacardi, chairman of the spirits giant, is unkempt and closed off. Last year the owners offered to pay residents as much as $50,000 each to allow development of the land, but not enough accepted..
“How can I know how much we want? I’m not a land expert,” says Rosenberg who turned down the offer. “I don’t know how much building something back there lowers the value of our houses.”
It’s a dynamic playing itself out in various South Florida locales. Developers build golf course communities and sell homebuyers on the peace and prestige of living next to a vast green expanse.
Frequently there is a deed restriction on the golf course property that limits its use “in perpetuity” to a golf course.
But the economic downturn has hurt the golf market, and open land is scarce, so golf course owners are increasingly looking for ways out so that they can build on the property.
Understandably, the homeowners want to be compensated for diminished property values in exchange for not suing for the violation of the restriction. Particularly when the restriction requires homeowner approval for replacing the course, the homeowners would seem to have the upper hand. But the owner of the links can fight back by letting the property go to seed.
Golf course glut
Calusa is not the only place where this war is being fought. Across the nation, the number of golf courses has shrunk, down 358 since 2006, according to the National Golf Foundation. In 2011 alone, 157 courses closed.
The foundation calls this reduction a “market correction,” because a rash of golf courses were built in the real estate boom of the 1990s. Many of the courses built in 1990s were linked to master-planned residential community developments and meant to entice potential homebuyers. In a paper entitled “Code Blue for U.S. Golf Course Real Estate Development,” David Hueber, former president of the foundation, writes that these courses tended be too challenging for the average golfer, as real estate developers believed that harder courses were more appealing.
People also have less money to pay for a relatively costly pastime. “Golf is not immune to the recession,” says Greg Nathan, the foundation’s senior vice president.
With over 1,100 golf courses, Florida has the most of any state.. According to the last study done by the World Golf Foundation, golf’s direct economic impact on the state’s economy in 2007 came to $7.5 billion. Approximately 167,000 Floridians worked in a golf-related industry.
South Florida has seen the decline of several courses.
The TPC Eagle Trace golf club in Coral Springs is in foreclosure, although still operating. The owners of Hillsboro Pines Golf Club in Deerfield Beach say that the course has been losing money for years, and due to opposition from residents of neighboring Century Village, the owners have been unable to make upgrades. The course continues to operate.