Recently, I served as an expert witness in a tax certiorari case in New York State. The property that was the subject of the matter is an upscale private country club with not only a highly regarded and desirable golf course, but additional facilities, including a large and elaborate clubhouse, swimming and tennis facilities, equestrian stables, member lodging in the clubhouse and 4 onsite residences. While the stables may be unusual, the other facilities are typical of many private clubs, especially upscale clubs.
For many years, New York, as a result of case law from some years ago treats private clubs as daily-fee golf courses. This resulted from the argument that the only difference between daily-fee and private golf facilities was how they are operated and not the fundamental differences in the real property, which is the subject of the real estate tax assessment.
It has become abundantly clear to me that there are significant differences in the real property, as well as the operations.
Golf facilities are made up of land, golf course improvements and building improvements (real property). While the operational differences are well known, with private clubs (PR) relying on annual dues and public access courses (DF) relying on daily fees, that is more about operations. There are significant differences in the real property characteristics of private clubs and daily-fee facilities.
One of the first questions a golf course architect or clubhouse architect raises in development or renovation is how the course will be used and who will be playing it.
The daily-fee golf course is typically designed and built with pace and volume of play in mind. Whether a course is planned as PR or DF is significant in developing the design. Most DF courses host a higher volume of rounds than private clubs and routing, hazards and sequence of holes are designed to accommodate this volume of golfers and minimize the time necessary to get around the course. Conversely,the PR course typically has more hazards, a routing focused on creating the ideal golf holes for challenge and scenery, while not preparing for a high volume of rounds. Most DF courses need to host more rounds and have tee time intervals at 10 minutes or less. Many PR clubs have tee time intervals at 10, 12 and even 15 minutes, enhancing the experience and limiting membership to provide easy access.
PR and DF courses also have very different infrastructures and buildings. Clubhouses are very different. PR clubs typically have large locker facilities, fitness areas and banquet areas, in addition to a choice of dining options. DF facilities rarely have the choices in these amenities typically found at PR clubs. Few DF courses have the swimming, tennis, and other sports facilities enjoyed by most PR clubs.
According to the American Society of Golf Course Architects (ASGCA), no matter what level of a golf facility is being planned, there are certain elements that are common to all.
These basic real property components of a golf facility (PR of DF) are:
Pro shop (minimum of a few hundred square feet)
Restroom(s) (unisex and handicap accessible as a minimum)
Maintenance storage building (minimum of a 2-car garage)
Golf Course Improvements (tees, greens, fairways, irrigation, drainage, etc.,)
Other buildings and facilities (swimming, tennis, etc.)
Notice that clubhouses are omitted from this list but would be included in an improvements analysis.
In his famous 1927 book Golf Architecture in America, George Thomas writes: “The Municipal (DF) Course should first of all consider congestion; everything hinges on that, for there
is the absolute necessity of getting as great a number of players around the course as possible between daylight and dark, and those many persons are all hammering golf balls in diverse ways
both as to length, direction and execution, and like all golfers, are doing it with implements ill suited to the purpose. In the opinion of the Municipal Greenkeeper, all such impeding obstacles
as long grass, traps, hazards, one shot holes, and so forth are best elsewhere, and there is much truth in his belief.”
Furthermore, in his 2005 book Golf Course Architecture – Evolutions in Design, Construction and Restoration Technology, Dr. Michael Hurdzan, PhD, states: “A public golf course can expect to host golfers with a wider variety of skills than an upscale, invitation-only country club. This suggests that the public course might have more gentle hazards than those found at
the private club.”
In his 1982 book Turf Management for Golf Courses, Texas A & M professor James Beard wrote: “Public fee and municipal courses may exhibit only the elemental concepts of strategy,
having few bunkers and other hazards, whereas courses designed specifically for hosting major championships usually have numerous bunkers and water hazards to accentuate the strategic,
heroic or penal nature of each hole and to create a high level of excitement during competition. The normal private club or resort course falls somewhere in between.”
These are the first clues that PR and DF golf courses can be very different and not appropriately comparable to each other, despite both being golf facilities. Private clubs typically have more complex and precise irrigation systems and because players demand quality playing conditions (and are willing to pay for it), these courses typically have better components as listed below: More and larger Hazards (bunkers, ponds, trees, etc.)
Different types of turfgrass
More extensive and lush rough areas
Better maintenance practices throughout, including tighter cutting heights and faster, firmer greens and fairways.
On-Course amenities (bathrooms, water fountains, “turn stations”)
Better drainage systems (Better Billy Bunker reports 90% of its customers are private clubs)
More extensive golf practice facilities
Golf course maintenance practices are typically more complex at PR clubs with larger budgets and result in healthier, more dense turf and more manicured, precisely mowed playing surfaces. Conversely, DF courses do not provide the strategic design, playing surfaces or conditions that PR clubs do. Off the golf course, these differences are even easier to identify. They can include private clubs having:
Larger, more elaborate clubhouse facilities with expanded locker/shower areas and often multiple dining and function areas
Larger and more complex maintenance facilities, often with multiple buildings, storage areas for sand and chemicals and improved fuel facilities and wash areas
Additional sports amenities, such as swimming pools, tennis, paddle, squash and other facilities, including indoor sports facilities
As clearly demonstrated herein, all golf courses are not alike. An analogy might be restaurants. McDonald’s and Ruth’s Chris are both “chain” restaurants. However, they are not comparable, serving dramatically different products, and most importantly in very different environments with different facilities. Golf courses are segmented into sub-markets. While it is easy for the
unfamiliar to segment those markets by operations, it should be emphasized that each requires real property characteristics and improvements necessary to meet the demands of each sub-market.
One of the fundamental concepts of tax assessment is that there be uniformity in valuation methodology. Unfortunately, this doesn’t cross jurisdictional boundaries. Many assessors (and appraisers) struggle with golf and club properties because of some of their unique characteristics. I proposed some uniformity in my recent article in Fair & Equitable.
Therefore, while the typical DF golf course can operate, and even thrive with more limited facilities, the PR club requires dramatically different characteristics to be successful. The differences are clear to the golf and club consumers and they make choices accordingly. Thus, given the fundamental differences between the different types of golf facilities, care should be taken to analyze them accordingly. They are most definitely “different animals”.