Redeveloping some or all of golf course land as residential or resort units often gives a golf course owner the opportunity to transform a failed golf course into a profitable venture. The oversupply of golf courses and the financial difficulty many courses face have been discussed in Hospitality Law Check-In (see Growing the Game of Golf and Club Membership Deposits in Bankruptcy) and golf industry publications. A golf course owner that cannot make a golf course profitable should investigate development opportunities for the golf course land. The golf course owner may even save the golf course by reconfiguring it to allow for limited development on a small portion, which may enhance the profitability of the golf course by generating new users such as new homeowners or resort guests.
However, changing land use from recreation/open space to residential, resort or commercial development often presents significant challenges, including:
- Prohibitions or restrictions in local government development approvals and zoning;
- Covenants and restrictions imposed on the property;
- Restrictions in agreements with property owners or a homeowners association;
- Possible claims from owners of residences on the golf course of rights to golf course views or open space;
- Political opposition from property owners, neighbors and golfers; and
- Club membership program that must be terminated if the golf course is closing or would be impacted by a golf course reconfiguration.
Golf course owners can take measures to win support for land use changes through:
- Land planning to replace golf course views with landscaping, parks or open space;
- Architecture and land plan that complement and add to the community;
- Review of traffic and other impact on the community with a plan to address any negative impacts;
- Communication with the community and local government as to current financial difficulties and negative consequences of golf course closure or alternatives to proposed development; and
- Analysis and communication of positive economic impact to the community and property values.
Redeveloping a golf course is extremely challenging, but may result in a “white elephant” being transformed into a “pot of gold.”