MCDERMOTT COLUMN: Golf business has risks, rewards

  • John McDermott
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  • Posted: Sunday, February 12, 2012 12:01 a.m.
    UPDATED: Friday, March 23, 2012 10:02 p.m.
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The clubhouse at the recently sold RiverTowne golf course. The ninth green is in the foreground.
/FileThe clubhouse at the recently sold RiverTowne golf course. The ninth green is in the foreground.

On the fairway, they call it a risk-reward shot.

In the boardroom, they call it a merger.

The recent pairing of two Mount Pleasant golf courses embodies both.

An affiliate of the company that bought Snee Farm Country Club a decade ago is the new owner of RiverTowne Country Club, one of the last layouts to be built in the Charleston area.

The sale closed Jan. 30. The buyer, Jim Feeney's RiverTowne Country Club LLC, shelled out $2.6 million for the 180-acre property, county records show. The price it paid Lubert-Adler for the business was not disclosed.

RiverTowne is one of the first big local parcels that the Philadelphia-based investment fund of Lubert-Adler has shed since taking control of most, if not all, of the acreage it acquired in frothier times with developer Bobby Ginn as its partner.

Ginn, a Hampton native whose business is based in Florida, had a nice run at RiverTowne, teeing up the subdivision just as real estate began to really sizzle in Charleston. He tapped golf legend Arnold Palmer to put his name on the course, which is on Horlbeck Creek between S.C. Highway 41 and the Wando River.

He sold off the surrounding land to major homebuilders. He persuaded the LPGA to hold a tournament on the 7,200-yard tract, but the short-lived Ginn Tribute died from lack of financial support in 2008.

As the housing market slipped deeper and deeper into a thick rough, Ginn quietly retreated. His backers at Lubert-Adler have since put one of their own in charge of its Charleston-area investments.

Amy Wilde, a vice president in the firm's Atlanta office who is now overseeing the Ginn-inspired Bridgeside project near Patriots Point, did not respond to a request for comment last week.

Hard hitting

Snee Farm is about 5,000 yards due south of RiverTowne as the birdies fly. From that distance, Feeney and his crew could smell opportunity wafting over the salt marsh and pluff mud.

Talks with Lubert-Adler officials started almost two years ago, said Mike Ashton, Snee Farm's general manager.

Like most of its peers, Ashton said the members-only club he runs off of U.S. Highway 17 has felt the sting of the downturn. Golf is a pricey luxury for most duffers, and monthly dues quickly turn into low-hanging fruit when times get tough. All the while, the cost of running a clubhouse and maintaining nearly 200 acres of green space rarely go down.

"The business side has definitely been hit hard by the economy, and for the private club business maybe even more so," Ashton said.

RiverTowne also felt the pain. Among other cost-cutting measures, the semi-private club stripped all carts of the electronic devices that informed golfers how far they were from the pin.

The golf industry as a whole still hasn't recovered, Ashton said

"Everybody's tightening their belt," he said.

Moving day

At a professional golf tournament, the Saturday round is pivotal. It's when competitors try to turn up their game and jump to the front of the pack. They call it "moving day."

It may well be moving day for Feeney and his JKM Holdings, which also owns a resort course in Lake George, N.Y. By acquiring RiverTowne, the Ramsey, N.J.-based golf entrepreneur is pulling out the driver and taking a calculated gamble in the face of gusty, unpredictable economic headwinds.

"Both clubs are on solid footing, but in this industry, everybody's trying to be creative," Ashton said.

No immediate major changes are planned at the newly purchased property, he said. In announcing the sale to RiverTowne members, Ashton noted that JKM is well-capitalized, experienced and "committed to the long-term success and ownership" of the 11-year-old course.

Feeney and Ashton are keeping most options open as they look for ways to cut redundancies, increase play and boost the bottom line. Ashton tosses out a term that only a hard-core MBA would dare utter on a golf course: "synergies."

"The main thing we feel is that by having a sister relationship, or whatever you want to call it with another club, gives both clubs an opportunity to move forward in a positive manner," he said.

The RiverTowne deal underscores the fact that golf and business aren't all that different. They can be at once frustrating, difficult, humbling and competitive. And, sometimes, they reward the player who takes the risky shot.