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From the mid-1980s to the mid-2000s, high-end developers of large residential communities often thought building a golf course and creating a club in the community was necessary to attract its target market. Today, such developers want to avoid doing that due to the excessive oversupply of golf (see Growing the Game of Golf, posted November 26, 2012) and the financial failure of many golf clubs (see Club Membership Deposits in Bankruptcy, posted July 2, 2012). However, these conditions create a unique opportunity for the residential developer to arrange with a local golf course owner not only to give the developer’s residential purchasers golf access, but to actually create a golf club at the area golf course. Similar opportunities exist at area family oriented recreational facilities such as lake clubs, beach clubs, fitness centers and adventure centers, which will help attract non-golfers and young families.

How can a residential community developer turn an access arrangement into the type of club experience that amenitizes the community similar to having the club actually in the community?

  • The golf course or other amenities should be easily accessible from the community.
  • The arrangement should be long term and preferably structured to run with the land so as to give purchasers a guarantee of continued access.
  • The residential community owners should be able to acquire memberships that give them preferences over the general public, charge privileges and regular dues payments rather than only “pay as you play” fee arrangements.
  • The residential developer and facilities owner should develop member services and activities, which include a member services/activities director, full calendar of activities, and a member website newsletter.
  • The golf course and other amenities need to be comparable in appearance to the residential community.
  • The arrangement needs to be viable for the amenities owner, with both sufficient dues payments to support operations, plus the member services and activities costs, and ongoing capital to fund capital improvements and replacements in order to allow the amenities owner to maintain the club. The amenities owner should expect financial support based on the developer not needing to build the amenities and the amenities increasing property values of the homes.
  • Provided such financial support is provided, the agreement should establish maintenance and operating standards for the amenities.

The right arrangement can be a win-win for the developer, the amenities owner and most importantly, the homeowners.