New (old) Owners for Tarandowah; Seguin Valley Finally Sold

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This is a tale of two courses — one of which is among my favourites to open in recent years, and the other of which was the focus of my derision.

Let’s start with the good news. Tarandowah, near Avon, Ont., which brought in outside investors last year, is back to simply being run by the Rowe family. Or at least I think that’s good. The Rowe family, who struggled to open Tarandowah in 2006, decided last year to buttress their finances by bringing in a number of outside investors to help complete the course. It opened — though in spotty condition — the course was a neat alternative to the typical parkland layouts that dot the Ontario landscape. The course, designed by Englishman Martin Hawtree, was able to overcome many of the problems (Guys without shirts playing! Carts in the fescue!) and proved to be among the best values in Ontario.

But apparently there were too many cooks in the kitchen — or maybe too many cashiers in the clubhouse. Whatever the case, difficulties mounted between the two ownership groups, and the Rowe family eventually acquired full control of the course once again. It has a new website and we can hope they’ve figured out where they fit in the market without compromising the course too much. This could be a real sleeper, or it could turn into something unfortunate. I hope it is the former. The course is up for best new course in Score Golf, Ontario Golf and Golf Digest. I doubt it’ll win — but if things are run properly, it’ll gain some attention.

[photopress:hole07.jpg,full,centered]On the other hand, there’s Seguin Valley. I’m not a fan, but thanks to reader “Craig” for pointing out the storyto me in an email. It seems incomplete, and that’s partially because of a battle between the architect, the owner and the construction firm. Regardless, I found it awkward. The co-owner of the course, Robert McRae, died soon after it opened, leaving it in the hands of his estate. They’ve been trying to sell it for some time.

Apparently a deal was in the offing for $12.7 million, which seems awfully high to me, with the Anishinabek Nation native band, according to Northern Ontario Business:

An earlier deal to sell the course to the Anishinabek Nation fell through in February.

The Aboriginal group was unable to finalize a $12.7 million deal to develop the course and a residential complex, says Maurice Switzer, spokesman for the Anishinabek Nation/Union of Ontario Indians.

Their financing partner (St. Clair Energy Inc.) said it was an “excellent proposal” but Switzer says it’s a challenge for First Nations to break into business fields. “By all accounts it was a good first effort.

“At the last moment our financiers sought further securities in the form of loan guarantees and development funding,” says Switzer. “We found all sorts of programs available for small businesses and multi-billion businesses, but we couldn’t find one that would help us close our deal.”

That deal was apparently to “develop” the course and surrounding real estate, the story says. I’m not sure whether that means the course would have been history or whether the goal was to develop cottages on the property.

Anyway, the story says there’s a new owner who will be named in June. No price was disclosed. Apparently the course will be open for some weekend play.

So why is it is tough for golf to make the numbers work in Muskoka? Look at what Ron Dennis, one of the partners in the venture, had to say about the amount of play it received:

Last season, he estimated traffic somewhere between 12,000 and 15,000 rounds.

Now that’s a pretty wide gap — and I’d be worried if he was “estimating” play. The club’s peak rate was $125, but I bet its average rate — that is the average green fee it received — was less than $100. But let’s use $100 as a ballpark. At 12,000 rounds, the club would have received $1.2 million in revenue. Considering it was in nice shape, one would have to guess it spent upwards of $700,000 on maintenance. It also employed 35 people, which is going to be another big hit on the books. With little play, the clubhouse, as it was, probably cost money to keep open.

Tally it all up and I bet this club lost serious coin every year it has been open, especially if McRae financed the land purchase.

That’s why Muskoka courses — with their short season — rarely make financial sense.