Feasability study

Feasability study

EXECUTIVE SUMMARY – AHWATUKEE LAKES GOLF CLUB

                                                     
This executive summary is derived from a larger study and analysis of the Ahwatukee Lakes Golf Club and its existing market.  The purpose of the study was to determine the viability of the golf course as an ongoing business enterprise.  Remarks made below summarize the findings of this report.
1.     The subject golf course was built in 1977 by Presley Homes, the original developer of the Ahwatukee community.  It has been recognized as one of the top executive-type golf courses in the U.S. and has been the site of the Arizona Short Course Championship.2.     Land area for the course is 101.7+/- acres with attractive lakes and many mature trees.

3.     The course has an ideal location for an executive course within a relatively affluent and   densely populated (over 5,000 homes) community with a population of about 200,000 in a 5-mile radius.  It is also immediately adjacent to large urban development in nearby communities and is linked to its primary market area by major arterial streets and key freeways.

4.     There are about 37 executive courses in the Phoenix area (7 are private), 19 of which are in the East Valley. The most competitive courses include Rolling Hills and Shalimar, both in Tempe.  Rolling Hills is owned by the City of Tempe and under new management since 2012 “the golf fund is in the best shape it’s been in for 10 years”.  Shalimar is privately owned and has recently been updated and is operated successfully by its owner after years of neglect.  Both courses are in good condition with excellent management.

5.     Play at these competitive executive courses increased significantly since 2011, as well as at the Ken McDonald facility, a regulation course owned by the City of Tempe.  Each of these courses improved through “hands on” daily management by competent operators.

6.     Between 1990 and 2005, the number of courses in the U.S. increased dramatically, especially those associated with residential development.  Many of these courses were not feasible as a business and suffered financially during the national real estate bust when home and lot sales diminished. Since 2006, this over-built condition resulted in the closure of many courses as the market sought equilibrium.  In 2013, only 5 courses in Arizona closed, or 1.5% of the state’s golf facilities.

7.     A golf course market is determined by local characteristics.  Arizona is highly attractive to retirees, new business and job development, and relocation by scores of families living in more inclement states.  Golf is a major contributor to the positive factors relating to future growth in the state and the metro Phoenix area.

8.     The subject golf course has a maximum location for an executive golf course with its surrounding population and accessibility to the area market.  Most resistance to golf is presented by its difficult, cost, and time required to play.  The executive course appeals to golfers because it is typically easier to play due to of its shorter length. It requires much less time, and cost to participate is well under that required at most regulation courses.  These courses also have strong appeal to older persons, beginning and less skilled golfers, women and youth.

9.     The subject golf courses can be operated as a successful golf facility.  It has all the characteristics one would seek when planning a golf course at its location.  With a long and mostly successful history, there is no reason it should not continue as a viable business and recreation enterprise, as well as contributing to the value of all residential real estate in the Ahwatukee community.

10.  Success will be directly related to diligent, competent, and experienced management by the ownership.