No entrepreneur wants to see a business fail, even more so when that business is a labor of love. Golf has been my passion for more than four decades, and as the owner of four Arizona courses, the highly publicized failure of one of them — the Ahwatukee Lakes Golf Club — bothers me, as I know it bothers the homeowners closest to the course.
The problem, unfortunately, is purely economic. The Ahwatukee Lakes Golf Club (ALGC), like other courses in the Valley, simply cannot attract enough paying customers to keep the links maintained, the clubhouse open and the business staffed. ALGC, which we bought in 2006 with the Ahwatukee Country Club for more than $5 million, has been losing hundreds of thousands of dollars for the last five years. For those years, we have subsidized ALGC with the income from our other golf courses and our own pockets.
The exact math? When we bought the property eight years ago, it was doing about 42,000 tee times a year. By last year, that number had plummeted by half — more importantly the greens fees we were able to charge golfers went from $38 to $21 including cart, in high season. In the summertime, the fees averaged $12, including cart.
Bad economic news and annual losses represent a business crisis that has to stop eventually. To us, this business failure wasn’t easy to accept, but it was inevitable. Our company couldn’t afford such deep losses, year after year. Some residents of the Lakes, who have played golf for years, have suggested we mismanaged the golf course. Unfortunately, playing golf and being in the golf business are completely different. In business, we are not allowed mulligans.
Having said that, I do wish our company had done at least one thing differently. The fence we put up last fall created hard feelings in the community. Though our intention was to protect neighbors and avoid insurance liabilities, what happened ultimately made a tough situation for homeowners near the property worse. For not notifying the community ahead of time, I apologize.
In an effort to avoid this mistake again, I wanted to let you know we will begin to drain the lakes (last week) as well as remove the fence due to the impending city ordinance on fencing. As we do so, we will be moving the turtles and other habitat from this property to the Ahwatukee Country Club.
We have made this decision because, again, the cost and legal liability of maintaining the lakes is too great. The only solution I have heard to potentially keeping the property a golf course is for the few residents surrounding the property force each homeowner in Ahwatukee, including you, to pay a special assessment of an estimated $1,500 to purchase the property. Their plan would also triple your monthly assessment for the annual maintenance of the course, not to mention funding potential losses if the course would continue to not be profitable.
However, the feedback I have received about this plan is that the majority of Ahwatukee is against paying these extra costs to benefit a small few. In the meantime, the uncertainty for the property continues for everyone.
Finally, selling the property is not a business decision my partners and I have taken lightly. Our partnership has only owned and operated golf courses. This will be only the second time we have sold a golf course in the last 23 years. We chose Pulte Homes, over commercial, apartment and higher single-family residential developers because they stood out as the company we believe best to end the instability and who would do their best to satisfy the competing needs of the neighbors adjacent to the former golf course.
• Wilson Gee is owner of the Ahwatukee Lakes Golf Club.