Source: The Pittsburgh Post-Gazzette
Rees Jones is one of America's top designers, the Ralph Lauren of his profession. But, instead of clothes, he designs golf courses, many in a classic style reminiscent of his father, Robert Trent Jones. Not only has Jones designed more than 100 courses -- Pinehurst No. 7 and Ocean Forest in Sea Island, Ga., among them -- he has been retained by host clubs of the U.S. Open championship to re-design their layouts and get them ready for the best players in the world. His makeovers have earned him the title, "The Open Doctor."
Jones, though, does not build golf courses in quantity. He sacrifices volume for quality, preferring to work on only four to five courses a year. Right now, though, the 63-year-old architect is as busy as he has ever been, with at least a half-dozen projects on his books. They stretch from east (Niagara Falls, N.Y.) to west (Palm Springs, Calif.), north (Jackson Hole, Wyo.) to south (Daniel Island, S.C.). There is also a course in Madrid, Spain.
Perhaps that is why Jones disputes the notion that fewer golf courses are being built in the United States, a trend that has conspired with a three-year decline in play to create more concern for an industry that seemingly had no problems less than a decade ago. The decline in course construction is especially evident in Western Pennsylvania, an area that once served as a microcosm for the boom of the 1990s, when courses across the country were sprouting at a pace of greater than one per day.
"The number of courses have declined, but there are an awful lot of courses that have been built and are being built in conjunction with real-estate developments," Jones said. "Don't buy into the doom and gloom just yet."
But that's just what has afflicted the course construction business, and the gloomy effects are certainly being felt in the tri-state region.
For the first time in recent memory, almost no courses are under construction or being planned -- "in the pipeline," as it is referred to by the National Golf Foundation -- in Western Pennsylvania. The lone exception is Blackthorne, an 18-hole Arnold Palmer-designed course that is part of a real-estate development in Penn Township, Westmoreland County.
Blackthorne, though, has been in construction for several years and has not undergone any further development since nine holes opened last summer. The other nine holes have been slowed by environmental problems and financial issues. No completion date has been set.
"It's just kind of sitting there, waiting to get approvals," said Thad Layton, one of the Palmer architects working on the project. "Nothing has really happened with the construction."
Still, after a dramatic influx of private and public courses in the 1990s, Blackthorne stands as the lone Western Pennsylvania project on a docket shockingly devoid of new layouts.
Since 1992, 22 new courses -- 17 public or daily fee, five private -- opened in the tri-state area. It began with the Jack Nicklaus-designed Club at Nevillewood and continued with other such private designer courses as Diamond Run (Gary Player), Treesdale (Palmer) and Southpointe (Arthur Hills). Upscale public courses -- those that command higher greens fees -- also sprouted, including Tom's Run (Bill Love), Olde Stonewall (Michael Hurdzan/Dana Frye), Birdsfoot (Ault & Clark) and Cranberry Highlands (Love). There were even resort-style courses such as Mystic Rock, the Pete Dye-design at Nemacolin Woodlands resort, and the Palmer Course at Speidel in Wheeling, W.Va.
What's more, the number does not include courses that expanded or built an additional nine holes, such as Pheasant Ridge, Butler's, Lindenwood and Cherry Creek.
But the number of new courses has slowed like an unmowed fairway the past three years, with no foreseeable change in the trend. The last private course to open in Western Pennsylvania is Totteridge, a Rees Jones design in Greensburg that opened in 2002. And the last public course to debut was Birdsfoot, which opened in May 2003, nine months after Cranberry Highlands.
"It certainly has slowed, and I don't know if that will change in the future," said Gary Sheffler, a civil engineer whose Moon-based firm worked on the construction and design of Diamond Run and The Madison Club. "That's not to say if I have the right piece of property, like a Diamond Run, it can't happen. But I look every day for that and it certainly doesn't exist around here."
On the decline
The dearth of course construction in Western Pennsylvania only crystallizes what is happening nationally.
While some areas continue to enjoy an explosion of new courses, most have declined along with the Pittsburgh region. The National Golf Foundation said in a February report that the number of new courses in the United States has decreased every year since 2000. For example, the NGF said between 150 to 160 18-hole courses will open in 2005. That is a nearly 63 percent decline from 2000, when 400 18-hole courses opened.
In Pennsylvania, the numbers declined just as steadily. The NGF said 35.5 courses were "in the pipeline" in 2004, compared to 51 in 2002. Curiously, though, seven new courses opened in the state last year, just one fewer than in 2002 (8).
"Back in the early '90s, the NGF said we could build a course and open a new one every day for five years just to keep up with the demand," said Deborah Thode, vice president for the Arnold Palmer Design Co. "And for 15 years [the industry] did open more than a course a day. But now supply has caught up with demand and, in some cases, has exceeded it a little bit."
Thode said the Palmer design team -- one of the most popular in the industry -- had as many as 60 projects on the books in the early 1990s. This year, they have 37, including Blackthorne.
"If you look at it, without any explanation, there's a big difference in the numbers," Thode said.
So what is the explanation?
For starters, the numbers of rounds played has decreased each of the past three years, both nationally and locally. Stagnant play has made some developers cautious about opening a new course.
"You have to love golf and hate money to do this," said Jeff Rivard, executive director of the West Penn Golf Association, the local arm of the United States Golf Association.
The slowdown also has made banks cautious about lending money to developers. That's one of the reasons the majority of new courses being built are a part of real-estate developments -- banks are comfortable with housing plans. Also, developers use the lots to help defray costs of course construction.
Last year, real-estate developments accounted for 59 percent of new course construction in the United States, according to the NGF. Still, the overall number of new residential golf communities is lower than in the 1990s.
"The lender in general has a much smaller appetite for new-course development," said Greg Lewis, president of Golf Capital LLC in Philadelphia.
Lewis' company is an arm of Textron Financial, the largest golf lender in the world which has invested nearly $6 billion in the golf industry since 1989. Less than 10 years ago, there were eight or nine golf lending institutions in the country. Now only Textron, along with GMAC and General Electric, remain.
That hasn't helped the course construction industry, either.
"There are more people looking for loans than there are lenders lending in the industry," Lewis said.
Supply and demand
Some in the industry argue that golfers aren't playing less; there are just more places for them to play. Nonetheless, the declining number of rounds at public courses has forced many daily-fee facilities to lower their greens fees or offer daily specials.
In Denver, developers have been cautioned by city planners and economic advisers to stop building courses or assume significant financial risk. The reason: The area has been saturated with new courses at a time when play declined 19 percent from 1999 to 2003. The Front Range region will open two courses this year after sprouting between eight to 10 in the past decade.
Ed Mate, executive director of the Colorado Golf Association, said even the golf course communities have to be careful.
"Golf is the carrot that developers are using to sell the lots," Mate said. "You see houses lining these beautiful greens fairways. But if the golf part can't be supported because it's not viable, whether because of over-supply or lack of participation, at the end of the day the homeowners will be up in arms if they're backing up against a bunch of weeds.
"At some point, we do have to be aware of the economic viability of the golf course, including the developers. They need to be aware we're doing a real disservice if all we're doing is having a nice four- or five-year run."
The situation isn't much different in warm-weather areas such as Phoenix, where city planners are not predicting any new courses because of saturation.
In Western Pennsylvania, the situation is more dire, particularly with some of the private courses that have been forced to close or go public because of declining membership and play. Others have consolidated into eight-club consortiums in which members from one participating club can play another for $20.
"Look at the costs," said Tom Tanto, who owns Totteridge along with Meadowink Golf Course in Murrysville. "The cost of construction is high; the cost of design is really high. You just can't make the numbers work. You have to charge some pretty high membership dues to pay for the maintenance if you want high standards. You can do it for less, but in the end you're cutting your own throat. You have to take the high road to success."
The decline in course construction is not a worrisome issue, however, to a lot of people in the golf industry. To course owners, it is a source of relief from their concerns about saturation and declining rounds. And, perhaps, a sign that supply has started to adjust to the lack of growth in demand.
"The high-end architects are still busy," Jones said. "I know Nicklaus is busy. I know [Tom] Fazio is busy. Everyone thinks golf is in a difficult situation. But a lot of people play it, a lot of people are traveling to play it and a lot of people enjoy it. I wouldn't bury the industry just yet."
