While I was away in Nova Scotia, I received a call from a CBC producer wondering whether I’d come on a couple of shows to talk about the state of the golf course industry. The producer was in Moncton and wanted me to talk about Royal Oaks, a Rees Jones-designed course on the outskirts of the city. The course had been pushed into receivership by its lenders, seen its owners/founders given the boot, and was the beneficiary of a reported previous $4.3-million in government funds to keep it afloat. The province of New Brunswick now gets 50% of the profits, according to reports, to pay back the cash it put into the project.
On top of this, I just received a call from someone involved with Wildstone Resort in British Columbia, a high-profile Gary Player design, saying the project appeared completely stalled. I’ll have to get to the bottom of this one — since there were at least nine holes finished and plans to fully open this summer. It appears financing issues may have finished this project — though they haven’t filed for receivership. Apparently Shayne Dysart, the club’s vice-president (and former head of the Board of Trade) was let go and the holes that are complete are being barely maintained. Sounds like a mess.
Why did the two projects fail? Interestingly both were based on real estate — or the notion that the golf courses would attract buyers for the surrounding homes. I have no idea what kind of course the Gary Player track would have been — but he doesn’t exactly have a reputation for building great designs. Similarly the Rees Jones course at Royal Oaks was very average, built on lousy land with all the typical Rees Jones features — lots of water, big bunkers, raised greens and over-shaped.
It turns out that Royal Oaks had a long history of government involvement, leading one to wonder why it was built in the first place:
The province’s dealings with the club began in 1998 with a $3.3-million guaranteed loan from the previous Liberal government. The idea was that government would cover the loan if it couldn’t be repaid to the bank.
In 2002, the Conservative government of Bernard Lord paid off that loan and the resulting interest. So, instead of owing a bank, the club was in debt to the province.
Including interest, the original sum has grown to the current $4.8 million.
Back in 2002, then-Business New Brunswick Minister Norm Betts said refinancing was the only way to preserve a return for taxpayers.
But now it’s unclear if there will be any return for taxpayers.
In 2008, Byrne said the debt restructuring would allow the club to expand and employ more people.
The plan then was to build a new clubhouse and hold year-round events. (source)
Truth be told, Royal Oaks was flawed from the start. Nearby Fox Creek, in Dieppe, demonstrated a golf project could be successful in the area. But Royal Oaks was built on lousy land, by a builder that seemed to have little understanding of what would make either a strong real estate project or a good golf course. In this case, Royal Oaks isn’t shut — it remains open as the receiver searches for a buyer.
The CBC wanted to know if golf courses could be a good investment. I told them they certainly could be a strong long-term investment, but a lot of care and diligence had to be taken by the owner. In this case the owners spent a reported $18-million on the project, and real estate sales were never strong. The course was average and dull, on lousy land. The owner seemed to think hiring Rees Jones would fix his location problem, but the truth is that it really doesnt matter whose name is on the design if it isnt very inspired or interesting.
One last point about Rees Jones in Canada, since Royal Oaks was his first design here. American designers in Canada add to competition and make the situation better. However, Jones has not exactly demonstrated much when it comes to designs in this country. Royal Oaks was average, and cracked the Top 100 in Canada on Scores list only briefly. Grand Niagara, another Jones design, this one in Ontario, has been badly received and garners almost no attention. Then theres the reno work to Royal Montreal, which most of the pros (and club members alike) think is poor and one-dimensional. Despite this, Lambton Golf and Country Club in Toronto is going ahead with a Jones re-do. Cant imagine what they are thinking. Oh, right “ lets get another average course. Of course, thats what they already have, but I guess they can spend a boatload on a renovation and end up at square one.
In essence the designer doesnt really matter “ it is the design that is significant. And in the case of Royal Oaks, the design wasnt up to snuff, and couldnt compensate for a flawed business plan. Itll be interesting to see what happens with this course over the long run.