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Larry Hirsh,
CRE, MAI, SGA, FRICS
President
Golf Property Analysts
RECENT PUBLICATIONS
Learn more about GPA's consulting services
Check out Brad's new book
Click above to learn more about GPA's golf property brokerage and marketing services. We have buyers and are seeking available golf course properties to sell.
HAPPY (& safe)
LABOR DAY!
Suite 300
Conshohocken, PA 19428
610-397-1818
717-648-4653 (c)
www.golfprop.com
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Tax Assessments - One Right Way?
I often write about tax assessments and this week had the opportunity to testify in New Jersey (NJ) state tax court on one of our assignments. The case was most interesting because of the completely opposite valuation methodologies employed by the township's expert and myself, acting as the taxpayer's (club's) expert.
The property, an upscale private club with small residential development component and club related lodging facility is not stabilized but does generate a positive cash flow. It also benefits from a solar power array, which significantly reduces it's power costs and generates additional revenues. Under NJ law, the revenue from the solar array is not taxable and an adjustment was required. The township's expert relied exclusively on the cost approach in valuing the club, saying that a hypothetical sale of the property was irrelevant and that the cost approach was the only method appropriate for valuing the golf club in NJ Tax Court. Our approach at GPA was much different, choosing instead to follow the "implicit sale" element of the appropriate definition of market value and employ the income and sales comparison approaches. Given the varying interpretations of case law, it is not uncommon for this "disconnect" to occur and time will tell how the court rules.
I recently authored two (2) articles on tax assessments that may be of interest. One, in the National Club Association's quarterly magazine Club Director highlights considerations for clubs and the other soon to be published by the Counselors of Real Estate journal Real Estate Issues provides guidance for attorneys, assessors, tax court judges and others charged with administering and adjusicating golf property ad-valorem tax cases. Each article can be accessed by clicking on the name of the publication.
GOOD TRACK, BAD TRACK?
This year, I've had the opportunity to play more golf courses than usual. Through travel, assignments, a few tournaments and one of the courses at my home club being closed for renovation, I've had the chance to play (and rate for Golfweek) some interesting courses, old and new and begun to define what (for me) makes a golf course enjoyable or not.
As golf enthusiasts, we all aspire to play those courses that are highly rated or that have hosted professional tournaments. Many of them are quite good. However, I've come up with my own criteria for what makes a golf course special.
As my friend, Brad Klein says "Throughout the 1980s and 1990s, the U.S. golf industry was based on a constitutive myth of difficulty and championship quality. Unfortunately, this represents an infinitesimal share of the actual golf market and has nothing to do with who actually plays golf, enjoys golf and pays for golf. The clubs that do well in today’s highly competitive, over-supplied golf market (especially on the private club side) are those that have a unique design identity, an active women’s program, thriving junior programs, have flexible courses and good practice ranges." Don't get me wrong, I love the challenge of a difficult and demanding golf course. It's fun to see what you can do, but the game is hard enough and we need new players and need them to stick with the game. In order for golf to be healthy, golf courses need to be financially sound and change is inevitable. To read the rest of my thoughts, check out my BLOG.
KEY FACTORS FOR CLUB SUCCESS
Check out my most recent article for Golf Course Industry on key factors for private club success. It starts on page 50.
HIRSH TO MODERATE CONFERENCE PANEL
GPA President Larry Hirsh will be moderating a panel discussion at the upcoming Crittenden Golf Conference in Phoenix, AZ, October 7-9, 2013. Hirsh will also be presenting at the GOLFWEEK Donald Ross/Architecture seminar at Pinehurst, NC on November 10-11, 2013.
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