Clublink owner Rai Sahi: Preparing to unlock the hidden value of his golf assets?
So the news hit last Friday that Clublink Corp. and owner Rai Sahi were seeking to rezone Glen Abbey, the home of far too many Canadian Opens, with the goal of turning it into housing.
The request came from Glen Schnarr & Associates Inc., representing Glen Abbey Golf Club owner ClubLink Corporation ULC.
The Glen Abbey Concept Master Plan submitted to the Town calls for the development of 3,000-3,200 residential units as well as office and retail development opportunities.
The valley, which is listed as a Regional Heritage System, is left alone in this concept.
The master plan for the development says that if approved, the valley would be opened up to the public. (source)
The rumour that Glen Abbey would be turned into housing has kicked around for years. A lot of that is due to the fact that Clublink hasn’t really reinvested in the course at all (why reinvest in something you’re going to sell?) and that Sahi’s main business is real estate. The thing is that Sahi is involved in commercial real estate and hasn’t done much in the way of residential (that I’m aware of). I’ve written about Rai extensively (he was a chapter in my last book, and I’ve profiled him a couple of times for magazines. Here’s my Financial Post cover story, though it doesn’t have my byline) and I know he is very interested in golf, but I suspect he’s more interested in potential deals that bring in a lot of money. He bought his initial stake in Clublink at a steep discount, and recently announced Clublink would develop Highland Gate in Aurora, even though his company initially said it wouldn’t develop the property.
That’s the thing about Rai—what he tells the media isn’t exactly reliable. He’s a hostile takeover expert (he’s done dozens of them) and during those takeovers he’ll often disparage those he’s battling. He’ll say anything to get a leg up, and often after things are settled the same people he’s maligned will get board seats on his companies.
So it shouldn’t come as a great surprise that he told a Golf Canada meeting a couple of years back that Glen Abbey wouldn’t be developed, and that he was too attached to it. I guess he’s changed his mind, though he’s trying to downplay it:
Sahi told the Globe the rezoning application was “a preliminary thing.” But this “preliminary thing” is becoming common in the golf space. The Desgasperis family that owns Copper Creek is doing the same thing there. Both Glen Abbey and Copper Creek won’t be homes any time soon. I’d suspect both have lengthy legal hurdles to overcome.
As I referenced in my SCOREGolf cover story (found here) about the sale of Canadian courses, there’s already a fight in Oakville over the rezoning of Saw Whet and Deerfield. Add Glen Abbey to the list and there’s a town tying up a lot of lawyers.
I suspect Sahi knows that rezoning Glen Abbey is a long affair, full of legal wrangling and political glad handing. It could take a decade before houses show up, but already Clublink is dangling deals—should it get its rezoning, it would offer up the valley holes (11-15) as parkland. Of course, those holes could never be developed anyway given they are basically flood plain.
The other question is what this means for the future of the Canadian Open. Golf Canada CEO Scott Simmons seemed content to have the Canadian Open at Glen Abbey two out of every three years. Will he want to hold it there if all the talk is about how the course is on its last legs? Will Clublink make the needed improvements if it is planning on putting a for sale sign up? Does Golf Canada have to find another course to the tournament regularly now? What would that be?
The rezoning of Glen Abbey is significant as a business story, as a real estate story and as a golf issue.
It’ll be messy and it’ll be protracted.
When I spoke to Sahi six or seven years ago for the FP story I wrote, he made an interesting remark about the potential value of Clublink. I wonder if he always saw real estate as the end game for the golf business:
Whatever he decides to do with ClubLink, Sahi says that right now, he just wants to take his time. That’s a surprising statement for a man who’s built an empire by moving quickly and aggressively. With ClubLink, he says he is ready to be a little more indulgent. “There is long-term value in this company,” Sahi says. “But you need to have patience.”
That patience, it turns out, might not have anything to do with the golf business, and everything with waiting out the hidden real estate value the courses sit on.
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