Tuesday, Sept. 15, 2015 01:17 pm
Car dealer pursues Piper Glen
They call him Green for a reason
Car dealer Todd Green is bullish on golf courses, and Piper Glen is on his buy list.
“I have not made a formal offer,” Green said of the financially troubled course in Chatham. “I do have an interest in it.”
Illinois National Bank, which is owed nearly $1.4 million, took immediate control of Piper Glen after foreclosing on the property last month. The course is now managed by Walters Golf Management, a St. Louis company that specializes in maximizing revenue from courses through such innovations as continually tweaking the price of rounds based on variables that include demand and the weather forecast.
Green said he doesn’t think that the bank or any other Piper Glen creditor can be made whole, given the decline in golf’s popularity and the abundance of golf courses in the Springfield area. According to court records, creditors include at least one other financial institution as well as the Small Business Growth Corporation, which issues federal Small Business Administration loans.
“I think everybody’s going to have to take a big hit,” Green said.
But that doesn’t mean that Piper Glen isn’t worth buying.
“There will be people who will probably pay more than me,” Green said. “But I don’t believe, for the good of the community, that there will be a better operator than me. I live here. It’s important for me to do a very nice product.”
Green cited the football stadium at Sacred Heart-Griffin as an example of his commitment to doing things right. Green paid a sizeable portion of construction costs for the stadium that opened in 2012, and he said the community can expect the same sort of quality if he becomes the owner of Piper Glen. That Springfield-based Illinois National Bank controls the course’s future instead of a bank headquartered elsewhere might prove an advantage, Green said.
“I’m in this community,” Green said. “If I do it, I want to do it right.”
In foreclosure papers filed in Sangamon County Circuit Court, Illinois National Bank asked that the property be auctioned.
“Auction doesn’t mean highest price,” Green said. “The auction means the best overall offer.”
Should he acquire the course, Green said that he would invest heavily in improvements. He said that he anticipates as many as five other potential buyers entering the chase for Piper Glen. He predicted that the troubled course will attract attention from out-of-town golf course management firms interested in cutting costs to increase their bottom line.
“I’m going to spend a ton of money and make it super nice,” Green said. “I’ll find a Michael Jordan of golf pros to run it – not necessarily someone who can play well, but someone who loves the customer. Just fill it full of capital and find the right guy (to run it).”
Jeffrey Smith, chief executive officer of Walters Golf Management, said that the course has suffered from a lack of maintenance and upkeep. Smith said that irrigation system was in disrepair when his company took over but has recently been fixed. Greens and fairways are being re-seeded, Smith said.
“I think the golf course’s greatest challenge in the near past has been golf course conditioning,” Smith said. “I think people will be able to expect, when they come to Piper Glen in the spring, that there will be a strikingly improved product. And I think there has been significant improvement even in the last 10 days because the water’s been turned back on.”
Frank Simpson, who lives near the course, said that the fairways had turned hard as concrete in recent years, grass immediately next to greens had grown long enough to qualify as rough and clumps of grass had sprouted in sand traps.
“They just let it go,” Simpson said.
Simpson praised Walters’ efforts to revive the course since the company took over management last month.
“They’re really working on it,” Simpson said.
While courses that have closed elsewhere in the nation have been converted to parks or subdivisions, Green said that he believes Piper Glen will continue to be a golf course. The cost of building roads and adding utilities and grading the course to allow for construction precludes the course becoming a housing development, he said.
Smith said that he does not believe that Illinois National Bank, which has retained his company through November to run Piper Glen, is interested in closing the course, given the amount of money that the bank is now spending on the course.
“They have provided every resource that we have asked them to provide to accomplish our goal of putting the golf course back in shape,” Smith said. “I don’t know (if the course will be converted to another use). But it would not make sense to me that they would spend the amount of money they are spending if the intent was to go in that direction.”
Piper Glen opened in 1996, the same year that Tiger Woods turned professional and made golf a household sport. The number of golfers, and new golf courses, surged for a decade after Woods turned pro and looked to be unbeatable. A hot real estate market also helped, as developers found that houses on golf courses fetched more money than houses in subdivisions that lacked courses.
The boom didn’t last. Since peaking at 30 million in 2005, the number of golfers in the United States fell to 24.7 million in 2013 and remained at that number last year, according to the National Golf Foundation, which says that the number of golfers today is the same number as in 1995, before Woods became a star. The number of courses has also plummeted. Just 14 new courses were built in 2013 while nearly 160 shut down, according to a National Golf Foundation report. It was the eighth consecutive year that the number of closures surpassed the number of new courses built in the United States.
Locally, the downturn is reflected in rounds played at courses operated by the Springfield Park District. In 1998, nearly 144,000 rounds of golf were played at the district’s three courses. In 2002, the district added a fourth course, Lincoln Greens, when the park district absorbed facilities that had been run by the Springfield Recreation Department, a now-defunct division of the city of Springfield. The number of rounds peaked at nearly 150,400 in 2005 and has gone down steadily ever since. During the most recent fiscal year that ended last spring, fewer than 89,500 rounds were played on district golf courses.
There are some encouraging signs, according to a 2014 story published by Bloomberg.com, which reported that entrepreneurs betting on a golf comeback had pushed the price of golf courses by 57 percent in 2013. The average sale price for an 18-hole course in 2013 was $4.25 million, according to Bloomberg, an increase from the average of $2.7 million in the previous year. According to the Bloomberg report, lenders have grown reluctant to finance courses built strictly to boost home sales and have started concentrating on golf as a business, paying more attention to operating costs and revenue.
Green is part of the turnaround, having last year purchased The Club at The Strand, a golf facility that includes three nine-hole courses, that was built in the 1990s as part of a subdivision called The Strand in Naples, Florida. The purchase price was $8.2 million, according to Naples News and The Business Observer, which is published in Sarasota, Florida. According to Naples News, Dick Klass, a developer, bought the course. Green, however, said that he provided the money and Klass is a partner in charge of operations.
The Naples course doesn’t figure to be Green’s last.
“We’re working on two deals out of Florida right now,” Green said. “Hopefully, they will happen within the next six months.”
Green said that the Florida course he owns has an advantage over Piper Glen in that homeowners who live on the course are required to pay monthly fees to the course, a concept known as bundling.
“If it’s not bundled, it’s tough,” Green said. “Here (at Piper Glen) they’re paying zero. What should have happened originally is, they should have set up that course and set a monthly fee, say $35, just for living there. They didn’t do that. Panther Creek’s got the same problem. You live on the course for free. You can’t do that.”
It’s too late now to institute monthly fees for Piper Glen homeowners, Green said. But even a modest fee could have made the difference between at least breaking even and operating in the red, he said.
Smith, whose company manages 15 courses, said that he believes the golf business is on the upswing. The industry is growing as the housing market has recovered, he said, and the number of players and corporate dollars are growing. He said that his company hasn’t considered making a bid for Piper Glen, but he has heard rumors of Green’s interest.
“That’s great if he’s interested,” Smith said. “I personally think that the golf course would be better served if it had local ownership. That’s one man’s opinion.”
Contact Bruce Rushton at email@example.com.