They invite the rattlesnakes to play.
Real estate developers bet big on golf course communities in the 1990s and the 2000s, sparking a building boom that cratered in the recession. Now, amid a strong housing market that creates demand where the courses are located, they are working against zoning laws and deed restrictions across the country to shut down unprofitable courses and develop the land for new homes.
In Myrtle Beach, copperheads and a methamphetamine lab are among the new residents of shuttered courses. In Central Florida, the local government in Seminole County passed a law requiring the owners of closed courses to keep cutting the grass lest they diminish the value of neighboring houses. Battles are brewing in Reston, Va., and outside Portland, Ore.
Ben Holt says he has watched it all play out first-hand since he plunked down $365,000 for a four-bedroom ranch-style house on a golf course in Ahwatukee, a master-planned community about 10 miles south of downtown Phoenix. Holt thought he’d be getting patio views of the 12th tee. Instead, he said, the course owner, Wilson Gee, turned the land into an eyesore in a bid to seal a development deal.
Gee, chief executive officer of Pasadena, Calif.-based RMJ Property, was already talking about redeveloping the Ahwatukee Lakes Golf Course when Holt bought his home there in 2008. After neighborhood residents blocked that plan, Gee switched gears. He closed the Lakes, as the course is known, in the spring of 2013 and then erected barbed-wire fences and drained artificial lakes that caught runoff from nearby South Mountain.
Pulte Group, the third-largest U.S. homebuilder by market capitalization, entered a contract with Gee and circulated waivers asking residents to sign away deed restrictions preventing the course from being redeveloped. Fears swirled that if the residential plan fell through, the Lakes could be turned into a cemetery. Or a Wal-Mart.
“A lot of the stuff he did just to antagonize us and try to break our spirits,” said Holt, who taught American Government in Rochester, Minn., before retiring to Phoenix in 1998.
Gee said he closed the course because it was losing money and built the fences out of safety and liability concerns. Pulte walked away from the deal in November 2014, leaving Gee to find another builder.
“Any decisions with regard to closing the course or maintenance of the site were made by the seller,” Pulte spokesman Jacque Petroulakis said in an e-mail.
“It will never be a golf course again,” says Gee.
The narrative unfolding at the Lakes reflects the tension on many golf course communities across post-recession America.
Developers built more than 3,000 courses in the U.S. from 1990 to 2003, according to the National Golf Foundation. New equipment that made golf easier to play and the growing celebrity of Tiger Woods helped developers sell Americans on a way of life that included warm weather, fairway views, and a golf cart in every driveway.
The builders weren’t interested in collecting greens fees. They wanted the new courses as amenities to new housing developments, from which they aimed to make their money.
When the economy collapsed, so did the golf management business: 643 courses closed from 2006 to 2013. A closed or struggling golf course is likely to be the largest tract of undeveloped land for miles around, making the land attractive to home builders—if they can obtain the building rights. For some course owners, the first step is to persuade homeowners that anything would be better than a nasty, overgrown golf course.
“It’s happening more and more with the resurgence in the residential market,” said Cliff Schulman, a real estate attorney at Weiss Serota Helfman Cole Bierman & Popok in Boca Raton. A decade ago, Schulman helped the owners of the Williams Island Country Club in Dade County rezone their property and sell it to a homebuilder. The residents of some nearby condominiums opposed the plan at first. Then Schulman’s client closed the course.
“After a few months, their lovely golf course was overgrowing. It started with raccoons and snakes and reptiles and other stuff,” he says. “The neighbors came back and said we need to talk.”
“Whenever you try to take away a golf course, you get into a fight,” said Dennis Hillier, a real estate attorney at Greenberg Traurig in Boca Raton. That’s led the owners of some closed courses to sell their land to local parks departments or take the tax benefit from donating the course to a nature trust.
Another strategy is to carve out a piece of land for residential development and redesign the course to fit a smaller parcel, says Erik Larsen, a golf course architect in Ponte Vedra Beach who is marketing the idea.
“The real low-hanging fruit are the courses with more than 18 holes,” he says, adding that there are enough struggling courses to keep him busy for 10 years.
Developers have also halted unfinished projects. In 2008, John Reed scuttled plans for a course by famed designer Pete Dye near Hilton Head, S.C., waving goodbye to more than $1 million in sunk costs and allocating the land to build a lake. The project, called Hampton Lake, was so successful that Reed ripped up blueprints for another course to expand his lakefront. In the suburbs of Minneapolis, builder Mattamy Homes is pursuing a scaled-down residential development in hopes of avoiding conflict.
The scant good news for homeowners—who often see property values drop on the closing of golf courses they overlook—is that the golf course boom has stopped, and every course that closes eases competitive pressure. The bad news is that it’s easier to fight redevelopment than to force a course owner to stay open for business.
Two of Holt’s neighbors are trying to convince a court that the deed to the Lakes at Ahwatukee requires Gee to maintain the golf course. Holt is hoping Gee will sell to someone who wants to be in the golf business.
That would probably be the least profitable option for the developer, says Jeff Woolson, managing director for Golf and Resorts Properties at commercial real estate firm CBRE.
“You’re going to be hard-pressed,” he says, “to find another use that isn’t more productive than golf.”