In the Zone by David Gould
A growing number of operators are finding themselves in battles over zoning regulations and individual property rights.
Owners of stand-alone golf courses once scowled at developers who built courses to sell residential lots rather than green fees. Now, many golf operators are turning the tables and then some, oftentimes selling their entire golf acreage to a homebuilder. That is, if they can keep town councils and zoning commissions from blocking the sale. Some apparently can’t.
While local newspapers often flash headlines detailing the demise of golf courses to real estate developers, a slim minority of daily fee operators across the United States have actually sold (or tried to sell) their land for conversion. In total, approximately 200 facilities have closed and been converted since 2004.
Some of the would-be sellers, like John Shields of Glenn Dale Golf Course in Glenn Dale, Maryland, only start down this road when approached by developers. In Shields’ case, homebuilding giant Toll Brothers floored him with an unsolicited offer. Shields and his co-owners—two siblings—saw the proposal as the solution to manifold family issues of retirement and estate planning. To their dismay, the group was politically and legally outmaneuvered in a struggle over zoning of their 50-year-old course. When the dust settled in late 2005, Toll Brothers walked away.
Other course owners have fared better with their exit strategies, either because political resistance was spotty or timing and circumstance were on their side. For those whose sellouts get waylaid, terms such as “spot zoning,” “down-zoning,” “re-planning” and “taking” have become a bitter vernacular. When golf’s oversupply woes finally fade, the tension over these governmental tactics may fade as well. Meanwhile, the attitudes and regulations pertaining to golf as a land use are worth examining. In some cases, they can swiftly tilt against course owners and force them into continuing their operation—profitably or not.
Changing Times, Evolving Needs
The driving force compelling those operators who eventually decide to close their courses and redevelop the land has more to do with putting food on the table than an aversion to the golf business. Quite often, an extended family’s need to divide its sole major asset is a common catalyst for conversion. Urban sprawl is another.
For example, longtime operator Parker Edwards sold off his course in Raleigh, North Carolina, last June because it had become engulfed by commercial development. In the conversion process, Edwards faced no roadblocks. His Cheviot Hills Golf Course, a Raleigh staple for nearly eight decades, was a zoning oddity, free of residential neighbors who might complain about losing their fairway views.
A smooth road to rezoning and re-use was also possible for developers in Germantown, Wisconsin, in part because their plan was a partial one—cutting a 27-hole course down to 18 to add housing, commercial space and a banquet facility. The lead developer, Jim Sedgwick of VJS Development Group, says “density hawks” on the village trustee board initially resisted his Blackstone Creek proposal. Over time, however, most residents and officials felt the plan offered genuine gains to offset the loss of golf acreage and the increase in unit density.
“The property layout included an old metal maintenance shed and an unattractive cart barn right on the major corridor through the village,” says Sedgwick. “Aesthetically, it was a problem.”
In response, Sedgwick and his group proposed replacing those buildings with a commercial cluster that would be architecturally and functionally integrated into the town and the golf course. With its growing empty-nester population, the village was demographically ripe for the townhouse-style housing to be featured at Blackstone Creek, a feature of the project that Sedgwick says enhanced its appeal.
Farther west, in Medford, Oregon, an 18-hole course operated by the Jantzer family since 1972 is on its way to becoming Cedar Landing, a 118-acre mixed-use development with more than 540 homesites and senior-living units. Of that acreage, 26 percent will remain as open space and common areas, a factor that helped ease the project through the approval process.
When it was still Cedar Links Golf Course, the property was annexed into the city and zoned as SFR-4 residential (quarter-acre lots), with golf as a conditional use. The decision to redevelop was made by the family, which had a set of parents and three children who all co-owned and jointly operated the facility—and had no revenue growth in sight. Asked if he felt hard times in daily fee golf prompted the decision to redevelop, Jason Jantzer says simply, “Nationwide, that’s the trend.”
Three thousand miles removed from Cedar Links, Myrtle Beach, South Carolina, has emerged as the epicenter of the current golf-conversion phenomenon. In Horry County, where the majority of courses comprising the famed Grand Strand are located, more than a dozen courses have closed in recent years. The county has received rezoning applications from another dozen or so, all aimed at converting fully or partially from golf to housing. Given the plethora of gated-community courses on the 100-mile swath of coast, this is ground-zero for the issue of whether covenants and restrictions truly protect owners of fairway-side homes from conversion of those fairways to yet more housing.
At Wicked Stick Golf Links, current zoning could allow condominiums and timeshares next to a neighborhood of single-family homes, according to Tom Palmer, who is president of the Southwood Homeowners Association. Palmer’s backyard borders a Wicked Stick fairway, and he’s concerned that redevelopment of course property will eliminate his view and reduce the value of his home. Palmer told reporters he “paid an extra $20,000 for the golf course (view)” at the time he purchased his home.
Reaching An Impasse
Outright failure of a golf operation and the specter of a large, derelict property is disturbing to many—if not most—residential neighbors, a factor that could possibly work in favor of an owner seeking to convert. Cases of 150-plus golf acres reverting to weed fields are few, but they make an impact.
Consider King’s Grant Golf Course in Summerville, just outside Charleston, South Carolina, which shut down in August 2005 after 34 years in business. The course’s owner, T-2 Green, LLC, had filed for bankruptcy a few months earlier, claiming that the facility wasn’t “economically feasible” to operate as a golf course. T-2 Green unveiled plans to develop 300 homes on the 178-acre tract, but the King’s Grant homeowners association contested the proposal, arguing that the course could not be developed unless a majority of property owners approved it.
Ultimately, a bankruptcy judge ruled in favor of the King’s Grant homeowners. The bankrupt course has since been sold, and the new owner—after soliciting bids to renovate the course and deciding the $2.5 million price tag wasn’t financially viable—has unveiled a scaled-back redevelopment plan that calls for 80 homes. The plan also sets aside a 60-acre plot for a public park and includes wholesale renovations to the clubhouse and pool area, which will be available as activity centers for residents.
Meanwhile, the Glenn Dale case depicts what happens when political and regulatory obstacles prove immovable. According to Shields, Glenn Dale had originally been zoned such that converting it to a residential subdivision was clearly permissible. The legal instrument that blocked conversion was a Prince Georges County Sector Plan and Sectional Map Amendment.
“It was the work of one political official, somebody right down the road from us,” Shields says. “He couldn’t use zoning to stop us so he took a county plan that’s divided into 21 different planning districts and is meant to be reviewed every decade or so for revision based on major growth patterns. Of those 21 districts, he picked out the one containing our land and sectioned off 19 percent of it, then zeroed in on 15 percent of that, to get to where the course is. He gerrymandered us.”
To Shields’ point, a county press release announcing the Glenn Dale amendment reads like the wanderings of a neighborhood cat. It specifies an area “bounded by Good Luck Road to the north, Springfield Road and Hillmeade Road to the east, Daisy Lane to the south, and Greenbelt Road to the west.” The amendment release also states that this re-designation was approved by “the County Council, sitting as the District Council for the Maryland-Washington Regional District.” According to Shields, this phrasing means the official opposing Glenn Dale’s redevelopment “had a panel of his handpicked locals that he was able to substitute for what is supposed to be a regionally representative council.”
The net effect of the amendment was to “down-zone” the course acreage from half-acre lots to five-acre lots. Up against “machine politics,” the Shields group couldn’t find a zoning attorney anywhere in Prince Georges County to take their case.
“I became radioactive,” Shields says. “Guys who were friends since high school wouldn’t represent me. And I didn’t blame them—they would have been blackballed.”
Eventually, a Baltimore firm took the case and successfully presented the Glenn Dale case on many fronts. According to Shields, his lawyers initiated numerous court challenges and prevailed in each instance, “the last time by summary judgment.”
Given the success on the legal front, the tactics of this one opponent were all the more frustrating to Shields because of how smoothly the official had navigated all other political and regulatory waters. “We had the support of the Glenn Dale Citizens Association throughout the process,” Shields says. “We got through all our other approvals.” On the public relations front, the group also fared well, receiving sympathetic coverage from The Washington Post and maintaining the loyalty of their regular clientele.
In the end, it proved fruitless. Their conversion plan in tatters, Shields and company finally relented and went to work rebuilding the golf operation as best they could.
“It had dropped from 55,000 rounds a year in our heyday to about 42,000,” says Shields, adding that “we’re starting to get them back.” Part of the problem he now faces—after so much up-front communication about the pending sale—is convincing people the course is open for business as usual and will remain so.
Growing In Prevalence
Not far up the seaboard is a similar case of daily fee owners who had their exit from a longstanding but currently flagging business blocked by local politics. John Goodwin, a principal in the family owned Ramblewood Country Club in Mt. Laurel, New Jersey, had a conversion deal in hand when his property was peremptorily rezoned from residential land to “open recreational-golf course.”
Goodwin contends the rezoning deprived him of an asset worth “about $40 million”—such as the one offered to him in March 2005 by a housing developer looking to buy his land. Two months after that first conversation, Goodwin approached the township of Mt. Laurel to state his intention to sell and convert the 27-hole property. Soon after that, he was talking to an attorney about suing the township to reverse its sudden rezoning decision.
As was the case with Glenn Dale, Ramblewood had its land-use options defined one way by zoning regulations and another way by comprehensive planning maps and documents. In another similarity to the Glenn Dale case, Ramblewood’s owners stated a preference to have the land remain as a golf course, with the town purchasing it at its best/highest use value and leasing it back to the Goodwins to operate.
“Our business has been declining,” Goodwin admits. “We used to have years of 76,000 rounds; now, it’s at about 50,000.”
At the very least, Goodwin argues that there’s no need to keep all 27 holes open. His attorney believes the Ramblewood suit against Mt. Laurel, on the grounds of “legislative taking,” is well supported by case law and likely to win at trial.
While he waits, Goodwin sketches out partial redevelopment plans, with the idea that a compromise might be reached and part of the course could remain. “I go to my computer and launch Google Earth and zoom down onto the property,” he says. “You can pick out one to cut or another hole to shorten. I spend hours doing that.”
David Gould is a Connecticut-based freelance writer.
