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Big Hat No Cattle Golf Developers: Making the Rounds Part 13

Royal Kunia Offers Views of Pearl Harbor, downtown Honolulu, Waikiki & Diamond Head Crater (Photo by Mark Miller)
Royal Kunia Offers Views of Pearl Harbor, downtown Honolulu, Waikiki & Diamond Head Crater (Photo by Mark Miller)

This column features recollections of the author’s 34 years as a golf writer. These installments stem from his many travels and experiences, which led to a gradual understanding that the game has many intriguing components, especially its people.

While serving as the editorial director of Cybergolf.com from 2000-15, I also created and published golfconstructionnews.com (GCN). It was a busy time. Over the duration of the former, I posted 16,000-plus stories – many of which I wrote. The latter, a subscriber-driven website with high-tech bells and whistles, covered golf development throughout America.

Complimenting various magazines and press releases, Adams News Clipping Service vastly helped me research hundreds, if not thousands, of golf projects (classified as New and Proposed, Remodels to Existing Courses and Recent Openings). Nearly every day my mailbox bore a fat envelope bursting with articles describing golf projects in all 50 states.

It felt a bit like Christmas. But those folded pieces of newsprint meant I had much work to do.

In addition to listing the city and course name (if yet determined), each GCN project identified its acreage, owner/developer, status, and golf architect and construction company (if far enough along). It also had a detailed comments section that would be frequently updated during a course’s evolution until it became, hopefully, a Recent Opening. I also subscribed to a service that regularly provided CDs with millions of phone numbers for the contacts. GCN’s reports were quite cutting-edge: when a user clicked on a contact name or another “live” link, a pop-up window would appear with the pertinent data.

Besides big national firms as subscriber targets, I focused on smaller outfits (golf-property appraisers; local companies dealing in sod and sand; design and construction services for golf courses and clubhouses; truckers, and so on). Annual subscriptions ran from $250 for each of the eight regions in the country to $2,000 for the entire nation. GCN was a rousing success and am proud to have fathered it.

But things turned sour in domestic golf development following the Great Recession of 2008, and GCN was shuttered in 2010, a time when there many more layouts than golfers to play them. Proposed developments were being tabled and, prophetically, there was a surge in course closures. In other words, the “news” part of GCN had become bad, and the reports had lost their key usefulness in providing subscribers promising business tips.

Along the way I encountered projects that were quite grandiose when announced. Cold facts (lack of money and permits, local opposition, environmental issues, etc.) smacked some developers back to earth, rendering their glorious plans impossible to realize. Other projects simply did not pencil out due to factors such as demographics, erroneous market projections for housing units, or exorbitant site/mitigation costs.

Big Hat No Cattle
Big Hat No Cattle

I call this situation the “Big Hat No Cattle” syndrome (called “All Hat No Cattle” in Texas), whereby initial boastful talk (big hat) was ultimately not backed up (no cattle). It was always refreshing to find developers with the “hat” and “cattle,” as it meant my subscribers might make a buck.

There are too many big-hat-no-cattle golf projects to mention here. Some may have come to fruition but were so heavily leveraged by onerous loans they ultimately bit the dust (it just took longer for the hat to fall off). Others that did open were way too difficult and carried $100-plus green fees to meet the 10-percent capitalization-rate on loans. Golfers would shell out a C-note, get their rear ends kicked, and never return. That unsustainable model happened a lot in the 1990s and early 2000s.

Some projects shuttered before getting underway, but later rose like a phoenix from the ashes. One such example is Remington Ranch in central Oregon. Originally announced in 2006, the proposal on a 2,000-acre site in Crook County promised three 18-hole golf courses designed by big-name architects, 800 homesites, and 400 overnight lodging units, a project whose costs (including expensive infrastructure) could easily soar over $100 million. Architect Tom Doak began preliminary work on the first layout, but the project stalled in 2010 when the recession bashed central Oregon.

But Remington Ranch is now back on the front burner with a new owner, an investment group apparently with the hat and cattle. As of February 2021, the downsized project involves one 18-hole course, 300 homesites and 150 lodging units. County officials will likely approve the second go-round, just as they did with the original.

A project in northwest Washington near the Canadian border, Loomis Trail, was a conglomeration of folks with the hat but an uncontrollable breed of cattle. Japanese investors bought a ready-to-open course designed by Canadian architect Graham Cooke in 1992 for $14 million – sight unseen – from local developer Rick Dvorak. They immediately demolished the par-72 layout (including irrigation system, cart paths, 18 fairways and greens) for an ultra-private, fly-in-from-Japan course designed by popular Japanese pro golfer “Jumbo” Osaki. Just a few holes into his work, it became clear that Jumbo was in over his head (he had never designed a golf course before), so Cooke was rehired to redo the layout. Meanwhile, the investors built a 44,000-square-foot clubhouse with 18 overnight units for members, a bar, exercise facility and dining areas. An extended stay here promised to be lavish.

Before work began on Cooke’s second go-round, the developers purchased over $1 million in construction equipment for the project. Upon the course’s completion, they had no idea what to do with these fancy implements and gave them to Dvorak, who sold them at a sweet profit. Over $40 million was spent on the new course and clubhouse. The original developers soon sold Loomis Trail to another Japanese company, Kaiyo Investment. The erstwhile private club is now a public facility owned by Lummi Nation, a local Indian Tribe, who acquired the 180-acre property for $3.62 million.

Perhaps the biggest “Big Hat No Cattle” golf developer of all will prove to be former president Donald Trump.

In October 2020, The New York Times reported that No. 45 has lost a combined $315.6 million since 2000 on his 19 golf properties. Like other high rollers, Trump got into the golf course ownership business at the wrong time. Trump bought one facility, Doral National, for a whopping $150 million in 2012; a $125 million mortgage payment is due in 2023.

Another Trump acquisition is the former Ocean Trails Golf Club in Rancho Palos Verdes, California (located not far from Tiger Woods’ recent car accident). Trump bought the 150-acre property out of bankruptcy in November 2002 for $27 million. That was chicken feed compared to that spent by the developers – Edward Zuckerman and a partner.

The site has magnificent views of the Pacific Ocean from a peninsula comprised of sedimentary rock historically prone to landslides. The Pete Dye-designed golf course was nearly complete in June 1999 when a massive fissure sent over 300 yards of the 18th hole into the ocean. The damage pushed Ocean Trails into bankruptcy. The re-creation of the 18th hole required 1.25 million cubic yards of dirt to fill and a repair tab surpassing $20 million. Golf writer/architect Geoff Shackelford calls Ocean Trails’ 18th “the most expensive single hole in history.”

My friend, golf course architect Mark Miller of Fort Collins, Colorado, was a GCN subscriber who said my report led to jobs that easily helped pay for his subscription. Here are a few of Mark’s “BHNC” stories.

“I got in touch with Perry Welker of Klamath Falls, Oregon, through GCN. I read he was thinking of building a golf course, so I gave him a call. He invited me to see his site of about 300 acres. It was a beautiful piece of open, rolling land that included the highest point in town. Perry and his wife, Pauletta, had a dream of building a golf course and hotel/lodge modeled after a castle they had seen in Europe. The Welkers called their venture, Castle Ridge Resort.

“Perry was someone who, if he didn’t know how to do something, would read books and learn it. For example, he built a helicopter so he could fly to his projects (he owned a booming “communication installation” business). He crashed on the first flight and almost died. He mastered AutoCad in a few weeks so he could draw plans for the castle. He rigged up a GPS scanning system on a four-wheeler to drive across the property and generate his own topographical maps. And he built an indoor swimming pool in the basement of their home.

“I was incredibly excited after my initial visit because I had just branched out on my own as an independent golf course architect. This was going to be my first big project. There was just one problem. Perry was still working and traveling a lot and was never available long enough for me to get much done. He also wanted to build the course himself. I’d never worked like this before, but maybe could convince him to hire a firm to build the course. I developed plans with the existing topography and tried to come up with the perfect layout. When I showed it to him while walking the land one day, we both became excited. He paid me for my time, but then got busy, and more time elapsed. I wanted to go full speed with construction drawings, but he would not unleash me.

“Finally, I decided to do rough-grading plans for a few holes and see if I could get Perry motivated. When I presented them, he got excited again and went out and bought a bulldozer, excavator and dump truck to start building the golf course and roadways. He hired his brother to work full time. I would show up and they would have a hole partially roughed in. It was cool, but at this rate it was going to take years and would likely never be completed. Again, he paid me enough to keep going, and I did a few more holes. Lather, rinse, repeat.

“After a couple of years, I came to realize that Perry was in a Catch 22 situation: He had to work hard to feed this ‘monster,” and could never give the time it needed.

He wasn’t a developer with deep pockets who could just hire a professional construction company and make real progress. Also, because Perry wanted to do everything himself, he wouldn’t seek outside investors. I began to grasp that this was how he had fun. This was his recreation, how he found pure joy in life, and didn’t want anyone to take that joy away from him. It seemed to me the only people he wanted to share it with were his wife and brother – and me in some small way. But I sure had fun designing what I still feel would have been a great course.

“In early 2021, I found the property on Google Earth. It looks like roads and a few homes have been built. It probably was sold off and will eventually become a housing development. Perry Welker died in 2016 at age 75.”

Here are two more of Mark’s BHNC stories:

“In Hawaii during the 1980s and ‘90s, the Japanese were buying up large hotels, Waikiki storefront properties and tracts of land to build golf courses. It was so expensive to belong to golf clubs in Japan – with few memberships available – that they would build in Hawaii with hopes of selling big-dollar memberships to their countrymen who would just have to travel to Hawaii to play golf. No problem, right?

“One such project was on Oahu in an area the locals call the “Ewa” side (west of Pearl Harbor). We [Nelson and Wright Golf Course Architects, a subsidiary of Belt Collins Hawaii] were hired in the early ‘90s to design Makakilo, a Japanese-owned 18-hole course. The site was on a hillside that was nearly too steep for golf. Holes had to almost be “benched” in some places. They wanted elaborate water features/waterfalls throughout and a giant clubhouse. Once construction started, I would attend a weekly meeting at the site to go over the construction and discuss what was next.

“We had rough-graded more than half the course, including water features, and the clubhouse was halfway built. Irrigation was in for much of it and grass was being planted … we were moving right along. One day the development group announced they had not secured a permanent water source for the project and were working off a temporary water agreement that was about to expire.

“Since fresh water is more precious than gold in Hawaii, we were suddenly facing a major issue. How and what were our options for getting water to the site now? This is usually figured out during a process called Due Diligence. The developers ended up evaluating some expensive options, including a desalinization plant by the ocean and pumping water into the site. Things didn’t look good.

After working on the project for about two and a half years, I showed up one day for a weekly meeting, finding the doors locked and the project shut down. So close to finishing, yet so far away. The site is now a housing development with no golf course.

“Royal Kunia Country Club was another interesting project. During this period of Japanese golf development in Hawaii, there was a Honolulu mayor named Frank Fasi. He was witnessing the vast amounts of money being spent by the Japanese and wanted Honolulu County to get its fair share. Fasi was a shrewd operator and invoked a new rule: the next course built on Oahu would be subject to an impact fee of $25 million.

“Guess what? That next course was the one we were contracted to design. The site was beautiful, overlooking the south side of the island from every hole, offering vistas across Pearl Harbor and Honolulu, with Diamond Head Crater in the background. The Japanese owner paid the first half of the impact fee upfront. The course was built, grassed, and ready to open in 1995. It was spectacular, with many lakes, water features, and swaying palm trees.

“Word came that the clubhouse couldn’t be built for a while; temporary buildings were set up for maintenance. Then we learned the course would only be maintained – and not open for play – until the owner paid the remaining $12 million. We thought that would happen soon as the guy was loaded; 12 mil was nothing to him. But the course went into receivership and sat there while being maintained – for five years. It couldn’t open until the impact fee was paid in full.

“In the meantime, we were obliged to check on the course. We knew the people watering and maintaining it, so naturally we had to occasionally play the course. Can you imagine, having a place you can golf in Hawaii, that no one else could play, for four or five years? It was awesome!”

Many other projects never got that far, falling victim more quickly to the Big Hat No Cattle syndrome. But they, however, will forever remain in golf-development lore.

Jeff Shelley has written and published nine books as well as numerous articles for print and online media over his lengthy career. Among his titles are three editions of the book, “Golf Courses of the Pacific Northwest.” The Seattle resident was the editorial director of Cybergolf.com from 2000-15. For seven years he served as the board president of First Green, an educational outreach program that is now part of the Golf Course Superintendents of America and Environmental Institute for Golf.

Read other in Jeff’s Series of Making the Rounds – https://www.golfcoursetrades.com/author/jshelley/

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