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To the untrained eye, Roscommon, Mich., is in the middle of nowhere. A 2 1/2-hour drive up Interstate 75 from the northern suburbs of Detroit, 12 miles off the highway, surrounded by scrub pines, it has neither tourist traffic nor industry to support it. Snow falls from November to April, and the deer outnumber the people. It has no ski hills, no commercial airport, and it's set in one of the poorest counties in Michigan. A perfect spot, three Arizona developers decided in 1996, for a world-class, upscale golf course: If we build it, they will come.
Thus began the checkered history of Forest Dunes, a 7,104-yard gem designed by Tom Weiskopf that was built and foreclosed on shortly before it was set to open in 2000. It is a poster child for the current state of the golf industry, its dreams and schemes run aground by a glut of overbuilding and the new millennium's altered economic state. "The original idea was for there to be 1,200 homes on the property," says Walter Mabry, head of the board of trustees for the Detroit-area Carpenters Pension Trust Fund, which was making its first foray into course development when it became the primary lender to Forest Dunes. "We didn't have a lot of union activity in the field of residential home building in Michigan, and we thought it would put our members to work."
It hasn't--not yet, anyway. Instead of 1,200 homes at an average cost of $350,000, only seven houses, six of them built on spec, have gone up on the 1,190-acre site. In its first three years only 60 golf memberships were sold. (Just 45 remain.) Grand plans to extend the Forest Dunes season by adding an equestrian center, a second 18-hole course, cross-country skiing, snowmobiling and fishing were put on hold while the pension fund foreclosed on its $20.6 million loan to developers Payne Palmer, Thomas Barrett and Jerry Peterson in July 2000.
For the next two years more lawsuits were launched than fairway woods, and Forest Dunes was left unmaintained. Construction on the clubhouse was suspended, leaving a shell of steel girders overlooking the 18th green. Finally, late in the summer of 2002, Forest Dunes was reopened under the ownership of the carpenters' pension fund, which refurbished the course and sank more millions into buying an adjacent 800 acres. The fund resumed construction on the immense, 24,000-square-foot, Bavarian-style clubhouse, which opened in October. Whether the pension fund is throwing good money after bad or making a wise investment in the future of golf remains to be seen, but there's no question that the fund has created a memorable golfing experience in the wilds of Michigan. Last January, Forest Dunes was named Best New Upscale Public Course of 2003 by Golf Digest, and there's again talk of adding a second 18. "It got off to a rough start," says Mabry, "but we still believe it's going to be a big success, especially now that Jim Dewling is involved."
Dewling, president of Total Golf Inc., has held about every position in Michigan golf there is to hold, from assistant and head pro, to country-club general manager, to designer, builder and owner of his own course. Over the last 27 years Dewling has been involved in 44 golf projects in Michigan, and his company owns or manages 12 facilities. "I was in the business before the boom, and making this thing work will be one of my hardest professional challenges," he says, sweeping his eyes over the manicured, rolling fairways of Forest Dunes, admiring the army of nine groundskeepers as they top-dress a single green. As Dewling envisions it, Forest Dunes has the potential to become the Pine Valley of the Midwest--an exclusive, unique golfing enclave for captains of Michigan industry. "A lot of people are looking for a second golf club, and this could be it," Dewling says.
He knows it will be a tough sell. Michigan is saturated with 854 golf facilities, according to the National Golf Foundation (NGF), trailing only California and Florida, and if location, location, location are the three key words in real estate, the question Forest Dunes must answer is, Roscommon County? Roscommon County? Roscommon County? "If you were a developer who knew Michigan," Dewling says, "you would never have done what they've done up here."
Golf-industry consultants have been saying pretty much the same thing from South Carolina to Texas, and from Maine to Arizona, as one struggling course after another has engaged their services for help. Egged on by industry cheerleaders and promises of a golf boom fueled by a demographic cocktail of aging baby boomers and Tigermania, developers have oversaturated the market with new properties, driving one another to the brink of financial ruin or beyond. According to NGF figures, there were 11,178 courses for 23 million golfers in 1990. By 2003 the number of courses had soared more than 32%, to 14,827, almost all of the increase coming in daily-fee facilities as the number of private clubs remained fairly constant. There are 1,165 more courses in the pipeline, 415 of which are currently under construction. Meanwhile, the number of golfers has risen 15%, to 27.4 million, but that figure includes golfers who play as few as one round each year. Only about half of the 27.4 million are so-called core golfers, who play eight or more rounds a year, a segment that has been shrinking since 1997, from 13.5 million to 13.2 million. Rounds per year in the U.S. have gone down for the past three full seasons, from an alltime high of 518.4 million in 2000 to 494.9 million in 2003. That's fewer rounds than were played in 1999 (496.4 million). The result? Greens fees have gone down, revenue has shrunk, and untold scores of courses have either been forced into bankruptcy or been unloaded at fire-sale prices.
A regional sampling:
? In Stratham, N.H., the tony Golf Club of New England--nicknamed the Millionaires' Course because its elite founders included New Hampshire's governor, billionaire Craig Benson, and Tyco defendant Dennis Kozlowski--had to file for bankruptcy in 2004 after only a year of operation, staggering under about $18 million in debt.
? In Houston, one of the most overbuilt markets in the country, 35 new courses opened between 1998 and 2002. One was 27-hole Fish Creek Golf Club, a high-end, daily-fee facility designed by Steve Elkington and built for $14.5 million. After its first two years of operation the property was foreclosed on by the Woodforest National Bank. Among those taking a bath on the deal was discount-brokerage baron Charles Schwab.