Residential Estate Industry Journal 4 - Page 39

GOVERNANCE
who wouldn ’ t want to look at a golf course from their lounge windows ?) in this phenomenon , such as the need for secure suburban fortresses in South Africa . Whatever these may have been , the net result was that the majority of golf estate residents and property owners were non-golfers .
Fortunately , lessons have been learned from these miscalculations , and expectations rethought to a point where some of the much newer and larger mixed-use estates – Steyn City north of Johannesburg would be an excellent example of these – are forecasting that as few as ten percent of their residents will become golf members , and the golf revenue expectations from residents ’ activities have also been revised accordingly .
This change in thinking brings to the fore the parallel need for an entrepreneurial and innovative approach to managing the golf facility , in an industry where management skills up to this point have been , quite naturally , largely custodial . Golf at club level now more than ever needs to be seen as a real business , one in which flair and innovation are encouraged and coupled with the requisite custodial skills , and then embedded in a culture in which experimentation is encouraged , and where the real fear should not be in the failure of a particular plan or initiative , but rather in the consequences of not being willing to try something new .
We now understand clearly that the relationship between the developer and the golf facility needs to be managed carefully from the outset .
This must include a completely objective and dispassionate view of the downstream , post-property-sales-phase needs of the golf facility , because if it does not , it can turn out to be a recipe for future disaster . Equally , the investors or buyers must see the golf course as an essential part of their property ’ s investment value , whether they are golfers or not . History clearly shows that where the relationship is not carefully structured , promoted clearly and honestly and then managed realistically , the most likely outcome will be one in which the golf course , due to a lack of provision for adequate funding , will become a significant liability in the overall context of an estate ’ s financial activities .
Jeff Gilmour comments : “ Even if it has already been fully integrated into the estate , unless the golf course can be managed effectively to at least a breakeven point as the first-phase goal , it will continue to be a bone of contention among homeowners ( especially the non-golfers ) and a recurring and unwanted item for discussion under ‘ general ’ at every AGM ”.
As Jeff says , the golf course must be seen as a core and integral element of the complete facility and must not be allowed to be sheared off as a separate entity . No matter how imaginative this process might be , it will be unlikely to change the fundamental interrelationship between the golf course and the estate itself .
From the outset , with the sale of too many developments , the use of creative golf membership options , in the form of debentures , founder categories , shares , etc . were little more than a cosmetic wrapping , which masked the real downstream needs .
The newer estates , where a golf course is part of the “ package ”, have learnt from these marketing and presentation errors . Steyn City sees golf as only one of the many lifestyle features it offers its residents , all of which must be supported by every homeowner .
The fact that the golf course is presented as an integral part of the facilities from the outset gives the prospective buyer or investor a clear understanding of their responsibility in community terms , both to it and any other facilities that might be part of the package . Mature facilities need to effect retrospective action to address this same issue along the theme of total ownership by every homeowner
This approach will ensure that the golf course is securely anchored at the core of the development along with the roads , gardens , security fences , etc ., and reinforce the premise that the value in any property investment is inextricably linked to the maintenance and wellbeing of ALL the facilities that the estate offers , and not just the ones that individual homeowners choose to use personally .
Jeff comments further : “ This issue , it must be said , is not limited to the golf course , but would also need to be applied to other leisure facilities that might be developed as part of the estate . However , due to the sheer size of its footprint , the course ’ s share as a percentage of the overall maintenance costs will stand out in any budget .”
So much for the background factors , but now many estates are faced with the task of unpicking the original structure and reintegrating the course back into the dayto-day financial core of the estate .
This reintegration can be a divisive period in a community sense , but it is an essential bridge that must be crossed for the overall long-term benefit of the estate . Those embarking on this process should draw comfort from the achievements that Pecanwood has made to date in this tricky process .
This transition process also makes it essential to revise the management architecture and streamline processes so as to be more efficient and be able to effectively monetise activities around the course .
In response to this need , ARC has developed a consultancy partnership with The Business of Golf . The service will provide support to ARC ’ s member golf estates ’ HOA boards , estate and golf management teams and the development of an orientation course for HOA board members to help them to understand both the new and day-today challenges being faced by their golf management staff .
John Cockayne
PAGE 37
GOVERNANCE who wouldn’t want to look at a golf structured, promoted clearly and honestly gardens, security fences, etc., and reinforce course from their lounge windows?) and then managed realistically, the most the premise that the value in any property in this phenomenon, such as likely outcome will be one in which the investment is inextricably linked to the the need for secure suburban golf course, due to a lack of provision for maintenance and wellbeing of ALL the fortresses in South Africa. Whatever adequate funding, will become a significant facilities that the estate offers, and not these may have been, the net liability in the overall context of an estate’s result was that the majority of financial activities. just the ones that individual homeowners choose to use personally. Jeff Gilmour comments: “Even if it has Jeff comments further: “This issue, it golf estate residents and property owners were non-golfers. already been fully integrated into the estate, must be said, is not limited to the golf course, but would also need to be applied Fortunately, lessons have been unless the golf course can be managed learned from these miscalculations, effectively to at least a breakeven point as and expectations rethought to a the first-phase goal, it will continue to be point where some of the much a bone of contention among homeowners newer and larger mixed-use estates (especially the non-golfers) and a recurring – Steyn City north of Johannesburg and unwanted item for discussion under would be an excellent example of ‘general’ at every AGM”. in any budget.” As Jeff says, the golf course must be seen So much for the background factors, but these – are forecasting that as few as ten percent of their residents will become golf members, and the golf revenue expectations from residents’ activities have also been revised accordingly. 26&RBFVw&VVVBbFP6WFRf6ƗGBW7BB&RvV@F&R6V&VBfb26W&FRVFGFFW"V7W&Rf6ƗFW2FB֖vB&PFWfVVB2'BbFRW7FFRvWfW"GVRFFR6VW"6RbG2fG&BFP6W'6^( 26&R2W&6VFvRbFPfW&FV6R67G2v7FBW@rW7FFW2&Rf6VBvFFRF6bV6rFR&v7G'V7GW&R@&VFVw&FrFR6W'6R&6FFRFФGFW"rvFfRF2&6W72FFf66&RbFRW7FFRF26vRF涖r'&w2FFRf&R֖vB&RBv&RVƖVǒF6vRFRFR&VVVBf"VG&W&VWW&BgVFVFFW'&VF6&WGvVVFRF2&VFVw&F6&RFf6fRW&@fFfR&6FvrFRvbvb6W'6RBFRW7FFRG6Vbf6ƗGGW7G'vW&RvVV@62WFF2BfR&VVVFPGW&ǒ&vVǒ7W7FFvbB6V WfVr&RFWfW"VVG2F&P6VV2&V'W6W72Rv6f"BfF&RV6W&vVB@6WVBvFFR&WV6FR7W7FF62g&FRWG6WBvFFR6RbFFWfVVG2FRW6Rb7&VFfPvbV&W'6F2FRf&`FV&VGW&W2fVFW"6FVv&W26&W2WF2vW&RƗGFR&RF66WF2w&rv66VBFR&VFv7G&VVVG2BFVV&VFFVB7VGW&Rv6FRWvW"W7FFW2vW&Rvb6W'6PWW&VFF2V6W&vVBBvW&R2'BbFR( 6v^( fRV&@FR&VfV"6VBB&RFRfW&Rg&FW6R&WFrB&W6VFFb'F7V""FFfR'WB&FW"W'&'27FW6G6VW2vb2ǒPFR66WVV6W2bB&VrvƖrFbFRƖfW7GRfVGW&W2BffW'2G0G'6WFrWr&W6FVG2bv6W7B&R7W'FV@6VG6V6R'WBB2W76VF'&FvRFBW7B&R7&76VBf"FPfW&rFW&&VVfBbFRW7FFRF6RV&&rF2&6W726V@G&r6f'Bg&FR6WfVVG2F@V6vB2FRFFFRF0G&6&6W72F2G&6F&6W726W2@W76VFF&Wf6RFRvVV@&6FV7GW&RB7G&VƖR&6W76W262F&R&RVff6VBB&R&RFVffV7FfVǒWF6R7FfFW2&VBFP6W'6Rख&W76RFF2VVB$22FWfVV@'WfW'VvW"67VF7'FW'6vFFR'W6W70&VF6&WGvVVFRFWfVW"BFRFRf7BFBFRvb6W'6R2&W6VFVBvbf6ƗGVVG2F&RvVB6&VgVǒ2FVw&'BbFRf6ƗFW2g&$>( 2V&W"vbW7FFW>( &&G2g&FRWG6WBFRWG6WBvfW2FR&7V7FfR'WW" vRrVFW'7FB6V&ǒFBFPF2W7B6VFR6WFVǒ&V7FfPBF776FRfWrbFRFv7G&V7B&W'G6W26RVVG2bFPvbf6ƗG&V6W6RbBFW2BB6GW&WBF&R&V6Rf"gWGW&RF67FW"WVǒFRfW7F'2"'WW'2W7B6VPFRvb6W'6R2W76VF'BbFV fW7F"6V"VFW'7FFrbFV &W76&ƗG6VGFW&2&FFbvbFR6W'f6Rv&fFR7W'BFW7FFRBvbvVVBFV2@FRFWfVVBb&VFF6W'6Pf"&&BV&W'2FVFVЧFVFW'7FB&FFRWrBFFЦBBFW"f6ƗFW2FB֖vB&RF6VvW2&Vrf6VB'FV"v`'BbFR6vRGW&Rf6ƗFW2VVBvVVB7FfbFVffV7B&WG&7V7FfR7FFFG&W70F26R77VRrFRFVRbFF66PvW'6'WfW'VvW &W'G( 2fW7FVBfVRvWFW"FWF2&6vV7W&RFBFRv`&RvfW'2"B7F'6V&ǒ6w26W'6R26V7W&Vǒ6&VBBFR6&PFBvW&RFR&VF62B6&VgVǒbFRFWfVVBrvFFR&G2tR3p