Much has been written about golf being an elitist activity, about it being too expensive for the masses and the resulting decline in participation.  In this space, I’ve written extensively about broadening golf’s appeal to the “3-M’s” (Millenials, Minorities & "Moms").

As I see it, a big part of the problem is that just like our societal shift in distribution of wealth, more seems to be going to the top.

When I look back over the past few years at our appraisal, consulting and brokerage assignments, there is a clear distinction between the upscale private clubs (which are performing favorably) with the mid-market and affordable clubs which aren’t faring as well.  This is consistent in other areas as well, where upscale restaurants like Del Frisco’s and Capital Grille, are thriving while Red Lobster and Olive Garden are struggling.  Have you noticed that there’s rarely an empty seat in First Class lately?  Not many upgrades are available.

Avoiding Golf Course Extinction

It seems as though 2017 saw more than its share of golf course closures.  While the statistics aren’t out just yet many in the industry are predicting a record number of courses closing this year.  What (if anything) did these operators do wrong and how can a golf course avoid extinction.  Golf courses and clubs close for several reasons.  These include:

Several times this week, I received calls inquiring about the impact of the new proposed tax bill on golf courses.  The area most seem to focus on are conservation easements.  Depending on the source of the news, the tax benefit afforded to golf courses, clubs and their owners is either a “loophole”, the “Trump Golf-Course Break”, or simply a deduction in the interest of open-space conservation.

The issue of conservation easements arose during Donald Trump’s campaign when news emerged that he might be claiming tax deductions for property on some of his golf courses and estates, including his Mar-a-Lago complex in Palm Beach, Fla.

Regardless of the political implications, the new tax bill appears to preserve the potential for significant income tax deductions for golf course owners for open space conservation easements for those who qualify.  According to “Accounting Today” Section 170(e)(1) of the Tax Code allows a deduction for a qualified conservation contribution, which is a contribution of a qualified real property interest to a qualified organization exclusively for conservation purposes. The contribution should include a restriction, granted in perpetuity, on the use that can be made of the real property. The IRS and the Treasury Department said they have targeted some promoters are syndicating conservation easement transactions that offer the opportunity to obtain charitable contribution deductions in amounts that significantly exceed the amount invested. In those transactions, a promoter offers prospective investors in a partnership or other pass-through entity the possibility of a charitable contribution deduction for donation of a conservation easement.

Some of our recent assignments include:

MEET WITH LARRY

GPA president Larry Hirsh will be visiting the PGA Merchandise Show in Orlando on January 24-25.  To make an appointment to meet with Larry, simply email atLarry@golfprop.com. 

To order our award winning book, Golf Property Analysis and Valuation - A Modern Approach, click on the graphic above.