Mining the Depths Yields a Slice of Sunken Treasure : Enterprise: O.C. company retrieves millions of balls each year from golf course water hazards and resells them.

As a boy, Larry Margison sneaked into the Meadowlark Golf Course in Huntington Beach at dusk, waded into the shallow ponds and picked up sunken golf balls with his toes. Often the superintendent shooed him away, but Margison always returned and got so proficient with his toes that the golf course finally gave him a deal: a quarter a ball.

Now 41, Margison still retrieves wet golf balls. And he still gets about a quarter apiece for them. But today, his company, Ball Hawk in Rancho Santa Margarita, employs seven scuba divers who mine the water hazards at 80 golf courses from Tijuana to Utah, picking up most of the 3.5 million golf balls a year that Margison resells.

That translates into a $900,000-a-year business, making Ball Hawk the largest company of its kind on the West Coast.

“I had a natural talent for pulling them out of the water,” Margison says, showing that he can still scoop up golf balls with his size-12 foot faster than most people would take to bend over and grab them by hand.

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Margison’s firm actually retrieves about 2.5 million golf balls a year. It buys 1 million more from other dealers. Ball Hawk cleans and resells the balls for as much as $1.50 each. Many are sold to golf courses at discounts, and the balls often wind up for sale in fishbowl containers at pro shops, where they’ll be bought, hit and most likely dropped into the water again.

“People don’t own golf balls, they just borrow them for a period of time,” Mitchell Lombard says of the typical golfer’s propensity to knock balls into the water. Lombard is president of Gold Eagle of Dallas, which processes about 50 million balls a year and as such is the nation’s largest golf ball retrieval company.

No one knows how many ball retrieval firms there are. Some golf courses clean the ponds themselves, and nighttime poachers take away a huge chunk of business for tax-paying entrepreneurs like Margison, who figures that illegitimate traders cut his revenue by 25%.

Margison’s company formally began in 1972, when he was 19, just married and playing golf for Golden West Junior College in Huntington Beach. He started with contracts from three golf courses: Anaheim, Costa Mesa and Sea Cliff. That year, Margison grossed about $18,000--picking up all the balls himself with a rake, his hands and his toes.

Margison’s business has boomed with the mushrooming of golf courses--about one a day nationwide in recent years--and the growing popularity of the sport. “The average golfer would lose three or four balls per round,” said Marv Kilburg, a marshal at Cypress Golf Club, which opened in the summer of 1992. For Ball Hawk, which has a contract at Cypress, that means a take of 4,000 to 5,000 balls a week.

When he can, Margison retrieves balls with a $10,000 rolling machine that sweeps the lake bottom like a lawn mower, sucking up golf balls between its aluminum blades. But machinery won’t work in most golf course lakes because they have fountains, pipes or plastic linings at the bottom.

At the Cypress golf course, for example, bubbling fountains shoot out from a 75-foot-long pond that skirts the par-four No. 8 hole. Vince Maxwell, outfitted in wet suit and turquoise face mask, usually spends a couple of hours a week in the murky lake, groping for balls barehanded. His average find is about 900 balls, for which he receives seven cents apiece, or about $63.

“This is one of the better holes,” Maxwell said last week as he came up for air. Ball Hawk’s divers, who are independent contractors, make between $25,000 and $40,000 a year, the company says. “The money’s pretty good,” said Maxwell, adding, “It’s interesting. We’ve come across lawn chairs, bicycles and golf clubs once in a while.”

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Is it dangerous? “Nah,” he said. Unlike Texas or Florida, where divers can run up against alligators, Maxwell says the worst creatures here are crawdads or big fish. “The other day at Sea Cliff,” he said, “a two-foot catfish kept bumping into me.”

At the end of the day, divers like Maxwell dump the balls into banana boxes and drop them off at Margison’s production facility in Rancho Santa Margarita. There the balls are dipped in a cleaning solution and sorted by grade, like lemons.

Margison says only 20% of the balls retrieved are in the top condition needed to be resold to pro shops. The rest are usually marketed to driving-range operators or firms that condition used golf balls.

Margison also runs his own retail shop near Tijeras Creek Golf Course in Rancho Santa Margarita, selling top-of-the-line used Titleist and Ultra balls for as much as $1.50 each--about $1 less than what they cost new. Those balls provide the best profit margins for Ball Hawk, and Margison’s hope is to open a similar store in Palm Springs.

Margison likens his best used balls to cars with a couple of thousand miles on them. “They’re not brand new,” he said, “but pretty close.”