Orange County Plays Catch-Up on Golf Courses
Orange County mattress magnate Wayne Simmons plans to drive from his Anaheim Hills residence to Dana Point every other week this summer to play golf at Monarch Beach, shunning a country club situated much closer to his home.
Simmons, owner of W. Simmons Mattress Co. in Cerritos, says it doesn’t bother him a bit to fight freeway traffic for 45 minutes and pay the highest green fees in Orange County--$50 on weekdays, $75 on weekends--to play a first-class course with two holes right on the ocean.
There are plenty of people who share Simmons’ enthusiasm, and their apparent willingness to play golf at nearly any cost is prompting developers to transform hundreds of acres of valuable land in Orange County into upscale golf courses.
At least 12 new golf courses are being planned or built in Orange County, most in conjunction with expensive south county housing developments. Their completion will increase the number of public and private courses in the county to 44.
The new facilities are billed as premier courses, designed by golfing luminaries and architects such as Jack Nicklaus, Gary Player, Robert Trent Jones Jr., Tom Fazio, Tom Weiskopf, Jay Morrish and Ted Robinson. And all will cost much more to play than most golfers are accustomed to paying.
An increasing number of golfers and a limited supply of courses has sparked a golf course construction spree across the country. Developer interest has been stoked by higher fees, which make operating courses more lucrative than in the past.
Contributing to the boom in Southern California is the fact that golf courses can be used to satisfy open-space mandates and the recognition that the presence of golf courses will increase adjoining property values.
From 1970 through 1988, the number of golfers in the United States more than doubled to 23.4 million from 11.2 million, according to the National Golf Foundation. The national golfing population is expected to expand to 30 million by the year 2000.
Lagged Behind in Construction
The foundation believes that demand is sufficient to support construction of 400 or more golf courses annually between now and the year 2000. Only 211 new courses were opened in 1988. Golf, which seemed to take a back seat to tennis as the “in” sport of the early 1970s, is enjoying a resurgence in the 1980s. The national tennis population has fallen to 20 million from a peak of 40 million in the late 1970s, according to the American Tennis Foundation.
The change is generally attributed to the aging of America’s baby boomers, many of whom are now looking for less-strenuous forms of recreation that also offer social and professional payoffs.
Orange County, with an estimated 214,000 golfers, long has lagged behind other areas in construction of new golf courses. National Golf Foundation statistics show that in 1987, the county had 4,653 golfers for each 18-hole course. That compared to 3,620 golfers per 18 holes statewide and 2,056 golfers per 18 holes nationally. California had the fewest courses per capita of any state in the nation.
The demand in Orange County is dramatized by the long lines that form every day before dawn outside pro shops at lower-cost public courses. Early rising is a required regimen for golfers who stand in line not to play that day, but to make reservations for a week later.
The new courses are expected to attract golfers who want to escape the jammed municipal courses and are willing to pay more for some elbow room at the upscale facilities. Operators of the new courses also claim that they will be a cut above most municipal courses in quality.
High Fees
Gene Krekorian, senior vice president of Economic Research Associates in Los Angeles, said no one in Orange County is building the kind of golf course that is needed most: those with fees of $10 to $15. Even so, he said, there are plenty of golfers who will support the more expensive courses.
By traditional standards, the new courses are certainly pricey.
At the Tustin Ranch Golf Course, an undulating expanse of manicured turf, pools, waterfalls and 2,000 trees that is making its debut Monday, golfers will be asked to pay $45 on weekdays and $60 on weekends.
Charges at Tijeras Creek Golf Course, scheduled to open next summer in the developing foothill community of Rancho Santa Margarita, are expected to run about $25 on weekdays and $50 on weekends.
And two public golf courses that the Irvine Co. plans to develop along the coast just south of Corona Del Mar as part of a resort project are expected to top the $50 and $75 fees at the Links at Monarch Beach, currently the county’s most expensive course.
With fees like these, developers can not only recover all their development costs but also pay for part of the land underlying the course, Krekorian said.
Some developers, however, have no interest in operating golf courses and plan to recapture their costs by turning the courses into private clubs and selling memberships at prices that would have seemed astonishing only a few years ago.
Initiation fees for memberships in the new private courses range from $8,500 at Pacific Golf Club in San Clemente to $75,000 at Marbella Golf & Country Club in San Juan Capistrano. In addition, members must pay monthly dues in the hundreds of dollars.
Despite the high cost, memberships are selling briskly. Although the golf course and clubhouse at Marbella have yet to open, all but 52 of 300 club memberships have been sold, according to Ken Olson, corporate broker for the developers. And at Pacific Golf Club, memberships are being snapped up at a rate of 50 a month, said Bob Hayward, general manager of the 27-hole course.
In some cases, cities are encouraging the development of public golf courses. Jay Pierce, director of land development for an Irvine Co. subsidiary that is developing Tustin Ranch, said the Tustin City Council insisted on construction of a showcase public golf course as part of the 9,000-home community.
“We wouldn’t have been able to build houses out there if it weren’t for the golf course,” Pierce said.
Christine Singleton, Tustin’s community development director, conceded that fees at the new course will be too rich for the blood of some Tustin residents. Even so, she said, the city is getting a free golf course that is “far better than what the city could afford to construct.”
More Open Space
Although Orange County planning officials will not let developers substitute golf courses for required parkland in planned community developments, they will count courses toward general open space requirements. To that extent, the courses wind up generating revenue from land that would not be developed otherwise.
Eric Jessen, chief of planning and acquisition for Orange County Harbors, Beaches and Parks, said the county Planning Commission has shown “a strong interest in golf courses.”
Jessen said that in return for giving developers open-space credit for golf courses, the county in recent years has begun filing deed restrictions to be sure that the courses will be retained forever as open space and not later converted to housing.
In areas where land proposed for a golf course is flat and easily buildable, Jessen said, the county generally gets more open space than it otherwise could have demanded from a developer.
But as a rule, golf courses are not built because of the green fees they will generate or the open-space requirements they will satisfy. Krekorian said the most compelling economic incentive is the opportunity to increase the prices of lots and homes in surrounding communities, especially those directly overlooking the fairway.
“The reason they do it is for the real estate premiums that in many cases more than make up the cost of the land being used for the golf course,” Krekorian said. “You can’t afford to buy a piece of property and build a golf course and (expect to) make money. You need to do it as part of an overall community development.”
Garth Chambers, developer of the Dove Canyon community in southeastern Orange County, figures that his costs for golf course development include $6 million for the land, $6 million for construction of the course, $12 million for the clubhouse and $3 million to subsidize the private club until it is self-supporting. He said that if the state Department of Corporations approves his plan to sell 479 golf club memberships for $60,000 each, he will reap a very modest profit on his $27-million investment.
Water Features
But Chambers said he expects that the private country club atmosphere created by the golf course will add 30% to average property values within the 1,300-home community.
According to real estate sales people, home buyers cherish a view of a golf course second only to an ocean view. A home by a fairway often will sell for $50,000 to $300,000 more than the same model home just out of sight of the golf course.
“If a unit is directly on the golf course, the typical premium is about 20% of the base price. So if it were a $400,000 single-family home, it would get a $80,000 premium for the course,” said Ken Agid, a national real estate marketing analyst.
The size of the golf course premium, marketing experts said, also depends on whether the golf course is private and has water features.
“If you add water, they will pay an additional premium,” said Ted Robinson, a Laguna Beach golf course architect who designed the new courses in Santa Margarita and Tustin.
“For every dollar spent on waterscapes, we will get $3 to $4 in increased real estate values,” said Robinson, who specializes in “babbling brooks and waterfalls.”
At Marbella, sales of lots over the past year have been at least as hot as sales of golf club memberships. “We had 215 lots for sale, and they are all gone but for five. People love to live on golf courses,” said J. Richard McMichael, president of Fairway Land Co., a Laguna Niguel firm that is creating the exclusive golf community with two Bay Area developers.
McMichael noted that home buyers don’t seem discouraged by the company’s warnings that living near a golf course can pose dangers from errant golf balls.
Essential to Resorts
Even before Coto de Caza has enough golf club members to support one golf course, the developer of the fashionable community is planning a second course scheduled to open in mid-1991. The reason, said John Yelverton, president of the California division of Arvida, which is developing the project with Chevron Land Development Co., is to provide more golf course settings for more lots. He said a golf course view adds $60,000 to $90,000 to the price tag of each buildable lot.
Nor does living on golf courses appeal only to golfers. “Typically, 75% of the buyers in a golf course-oriented community do not belong to the club or play golf,” Agid said. “Twenty-five percent of the buyers are attracted by the open space and manicured setting, and another 50% by the associated benefits, such as the prestige and future real estate values.”
Golf courses are deemed essential to south Orange County’s bid to become a major resort area.
The Monarch Beach course is important to the nearby Ritz-Carlton Hotel and will be a big draw for two other hotels that are planned on its perimeter. In tandem with the new hotel projects, Townsend said, the golf course will be expanded and redesigned.
Henry Scheilein, general manager of the Ritz-Carlton, said he dearly values an agreement that reserves for the hotel half of the Monarch Beach tee-off times. “A resort couldn’t label itself a resort without a golf course,” he said.
Moreover, Scheilein said, many of his hotel guests are Japanese businessmen who are “wild about golf.” ORANGE COUNTY GOLF COURSES UNDER DEVELOPMENT
Public
1,2. Brea. The Southern California Golf Assn. is seeking county approval to build and operate two courses on property leased at the Firestone Boy Scout camp in Brea. The course may open in late 1991. Fees not yet determined.
3. Tustin Ranch Golf Course. Developed by the Irvine Co. Opens Monday. Green fees $45 weekdays and $60 weekends, carts included.
4,5. Irvine Coast, south of Corona del Mar. Two courses planned. Developed by the Irvine Co. Scheduled to open in 1991. Fees not yet determined, but developer says they will exceed fees at the Links at Monarch Beach, currently the county’s highest at $50 on weekdays and $75 on weekends.
6. Tijeras Creek, Rancho Santa Margarita. Developed by the Santa Margarita Co. Scheduled to open June, 1990. Fees not yet finalized, but operator says they will be about $25 on weekdays and $50 on weekends, carts included.
7,8. Talega Valley, a residential development at the north end of San Clemente. Two courses planned. Developed by Arvida. The first course will be public and is scheduled to open in late 1991 or early 1992. Green fees have not been set. It has not been decided whether the second course will be public or private.
Private
9. Coto de Caza. Developed by Arvida and Chevron Land Co. Northern course completed in 1987. A second course will be added in 1991. Memberships are $21,000 for Coto de Caza homeowners and $26,000 for non-residents. Dues are $235 a month.
10. Dove Canyon, east of Coto de Caza. Developed by Garth Chambers. Course expected to open summer 1990. Developer is requesting state approval to sell memberships for $60,000 with monthly dues of $350, including unlimited cart usage.
11. Laguna Laurel. Golf course planned by the Irvine Co. as part of new community in Laguna Canyon. May open in late 1991 or early 1992. Price of memberships and monthly dues not yet determined.
12. Marbella Golf and Country Club, San Juan Capistrano. Scheduled to open this fall. Memberships will sell for $75,000. Monthly dues are $265, plus $20 for each golf cart usage.