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May 1, 2008

The Future of Florida's Municipal Golf Courses

Analysis of: How Green is Golf? | www.golfdigest.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Howard Liggett, President and CEO, Distressed Real Estate Consulting Services, Inc.Howard Liggett 
President and CEO, Distressed Real Estate Consulting Services, Inc.
Implications: Foreclosures,tax increases,land devaluations and a sour economic outlook  for the remainder 2008 have forced municipalities and counties to look at fat trimming measures which hurt the least number of citizens.  The recently passed Amendment One forces local governments to limit tax increases to a 10% cap.  Critics say the amendment's provisions are draconian,but Florida taxpayers demanded relief.  The frills get cut first and tax subsidized golf courses are the easiest of targets.  The weather along with escalating gasoline prices will change the "look" of golf as many have come to expect.

Analysis:  As of April 2008, the Southeast of the U.S. continues to suffer the effects of an unprecedented severe drought. During 2007 some golf courses were allowed to water only their tee boxes and greens, resulting in the loss of some fairway grass. Access to water is not only a problem for drought stricken areas of the Florida,Alabama and Georgia.   Municipalities across the country are imposing restrictions on water use that will limit watering of public and private membership golf courses.  Course conditioning practices are being affected not only by the scarcity of water, but also by the rise in fuel prices and other course maintenance materials – fertilizers, etc. Not only is water becoming scarcer, it will eventually cost more as a diminishing resource. Also, if it costs more for gas to take a mower out to cut the grass three times a week, maybe a course can only afford two times a week in the future. Course designers have for some years dealt with wetlands issues and water access, so planning for water retention areas for irrigation purposes is not new, but we are entering an era of overall tighter budgets for maintenance. That will impact everything from how high the grass will be in the rough to landscaping with flowers along the side of a tee box. The perfectly manicured courses shown on television for professional tournament golf may not be affordable for most clubs.  Government run courses will begin to look like traditional European fairways with more brown and less green,rougher fairways,and longer grass lengths.

Bottom line---Florida's municipal course golfers have to change their expectations because whether it is water becoming scarcer or more expensive costs for maintenance, the overall circumstances for golf have changed. Again, some private courses may have members that can tolerate any price point to have a certain golf experience, but most facilities cannot pass along all costs.


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