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.”
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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.
Perhaps the most notorious golf course closing is that of the Sabal Palm course in Tamarac, where the previous owners, Bruce and Shawn Chait, funneled money to city and Broward county officials to obtain approval in 2006 for their plan to convert the course into a residential development. The bribes led to several arrests, landing one County commissioner in prison.
In Palm Beach County, the Mizner Trail Golf Course in Boca Del Mar, closed since 2005, and the golf course in Century Village in West Palm Beach, closed since 2008, have been the subject of protracted battles between neighboring residents and golf course owners. Both have restrictions on the property limiting their use “in perpetuity” to a golf course. But the course owners have been seeking zoning changes to develop the property, efforts strongly opposed by adjoining homeowners who have organized petitions, hired lawyers and attended hours-long zoning hearings.
With Florida’s real estate market on the mend and golf unlikely to soon experience huge growth, developers will increasingly target the few large parcels of desirable open space that ailing golf courses now occupy.
What was to be
The Calusa golf course, at 9400 SW 130th Ave. in Miami, closed last year. The owners had plans to build a 960-unit retirement community, with independent, assisted living and nursing care facilities on the site. But to redevelop the land, the golf course deed specifies that 75 percent of the surrounding homeowners must agree, a consensus that the golf course companies failed to obtain through negotiations.
After persuasion was unsuccessful, the companies turned to the courts. Fort Dallas Golf and Northeastern Golf, both connected to Bacardi, sued 238 of the neighboring homeowners.
According to the suit, the restriction in the deed of the Calusa Club golf course, put in as a covenant in 1968, is not enforceable anymore because, among other reasons, it has expired under the Marketable Record Title Act or MRTA for short.
Donna Berger, founding partner of Katzman Garfinkel & Berger, a law firm that has worked with many homeowners associations, says a common response when she asks homeowners if they are aware of MRTA is, “Who’s that?”
MRTA was enacted in 1963 and essentially extinguishes certain property restrictions recorded more than 30 years ago unless they are renewed.
But Duke Woodson, a lawyer who practices real estate law with a focus on the resort and golf industry with the law firm Foley & Lardner in Orlando, cautions that MRTA has many exceptions. Relevant questions would include: Has the golf course been in continuous use? What other property documents mention the covenant?
As for that $50,000 offer to homeowners? Gone. According to a website created by the companies’ firm, Shubin & Bass, the golf course last offered a mere $5,000, and that offer expired on Oct. 26. Jeffrey Bass declined to be interviewed.
Jorge Salabarria, who lives along the links, called the owners’ reduction of the original offer, and the lawsuit, “disgraceful.”
“But the big fish will eat the little fish,” Salabarria said. “We just lost our dream.”
An online public records search seems to indicate that the owners of only seven lots have agreed to allow the change.
‘A real mess’
And so, for the time being, the Calusa golf course will remain closed-off by a chain-linked fence, its now-scruffy surface more suitable to gophers than golfers and its parking lot blotted by tufts of weeds.
Some homeowners, including Rosenberg, whose back yard faces the overgrown links, wonder how far the golf course companies will take the court case. “It’s really bad publicity for a company like Mr. Bacardi’s to sue the whole community.”
In the end, no one can force an owner to operate a golf course. They can only prevent them from building homes — or in this case a home for the elderly.
In the event of a stalemate: “the land ends up looking like a real mess,” Woodson points out. “If [the homeowners] are realistic about that, they ought to want to sit down with the golf course owner.”