The cost of restoring Ahwatukee Lakes Golf Course would exceed $14.2 million and likely operate in the red for at least its first three years, according to a study by a management consultant hired by The True Life Companies.
Released last week, the study by True Club Solutions, a division of the global golfing industry giant Troon, was ordered by True Life as part of its court fight with Ahwatukee Lakes residents over the future of the defunct 101-acre course.
The estimated restoration cost is nearly double the $8.2 million True Life paid to buy the course from former owner Wilson Gee, who shut it down in 2013.
Calling its future profitability “minimal at best,” True Club Solutions said it “does not believe that Ahwatukee Lakes Golf Course would be a viable operating business if redeveloped as a golf course.
“If redeveloped, it would serve more as an amenity to the surrounding homeowners than as a sustainable business capable of producing enough cash flow to cover the cost of redevelopment and provide a fair return for the investment.”
A top executive for True Life said the report had “reaffirmed the need to stop the false rumors of golf being a viable option for this site,” which the developer wants to convert into an “agrihood” with about 270 homes, a five-acre farm, a private school, café, two lakes and trails.
True Life needs 51 percent of the community’s approximately 5,200 homeowners to agree to a change in the conditions, covenants and regulations governing the course.
“Our goal is to provide a viable asset to the community that benefits everyone and drives property values up,” said True Life Executive Vice President Aidan Barry. “In an already-oversaturated golf market, it is now clear that rebuilding a golf course is not a reality. Anyone who claims this property can or will be a golf course again is simply misleading the public.
“We aim to do better for the residents of Ahwatukee Foothills by creating a beautiful community that protects open space and adds values to homes in the surrounding area,” he added.
Release of the report triggered surprise and derision from Save the Lakes, a homeowners group which has two members suing True Life to force it to restore the course.
“We expected they were going to trot out the ‘economic defense’ in court,” said Linda Swain, one of the two plaintiffs in the lawsuit. “We have an expert – a guy with huge chops compared to the guy who works for Troon's newest start up. Obviously, they are desperate to keep out of court.”
Barry had told a small group of homeowners two weeks ago that the course study will be introduced as evidence during the Save the Lakes trial this June.
During a Save the Lakes town hall two weeks ago, Buddy Johnson, who has developed golf courses for 50 years, told the audience that several investors were interested in restoring the course.
““There are four or five groups of people who are not only credible but have money who are interested,” he said, admitting he did not know what it would cost to restore the course.
“The longer it goes the way it is, the more expensive it will be to restore it,” Johnson said. “We have someone waiting in the wings who will give me an idea of what it will take to make it a golf course again.”
Swain also indicated that several other golf course operators she knows said the estimate was high. They said the cost of restoration would be between $2 million and $5 million.
True Club Solutions’ estimate was based on an 18-hole executive golf course. Although its estimate did not include land costs, it did include: $6.8 million for course reconstruction; $4.6 million to build a new clubhouse and a maintenance facility and $2.5 million refurbishing on-course restrooms and a pump house.
In addition, it said that based on annual estimated revenues of $800,000, the course would sustain a 2 percent net loss in each of its first three years of operation.
The consultant also stressed that the restoration costs were only an estimate and suggested they could be higher, depending on the economy.
The report also included an overview of the state of golf and the golf industry in the United States and the Phoenix area. It said that said “while popularity has stabilized, the industry faces headwinds on several fronts.”
It said the age of “core golfers” is advancing. The report also said that while the number of Baby Boomers playing golf would be declining over the next 20 years, the number of millennials on the fairways was low.
“Greater challenges will arise,” it said, “as a greater number of Baby Boomers will become physically unable to play as often with fewer younger players filling the gap.”
In assessing conditions at Ahwatukee Lakes, True Club solutions said no turf remains from the old golf course, the bunkers would have to be reconstructed and the irrigation lakes dredged to remove “significance silt and runoff soil.”
It said that a maintenance building would have to be erected and that “the location of this facility could be problematic given the dense housing around the golf course.
“Wherever this building is located,” it added, “there will be unhappy residents as the site will produce noise early in the morning and throughout the day.”
The report also said consultants could not accurately estimate the cost of the course-irrigation system’s repair because the irrigation lakes were not filled with water. But it added that likely the “irrigation piping will have to be replaced.”