SMOKINCHOICES (and other musings)

August 14, 2013

Longaberger Golf 4 Sale

FRED SQUILLANTE DISPATCH PHOTOS Since it opened in 1999, the Longaberger Golf Club in Nashport rates as the best public course in Ohio.

Changing course

The ‘for sale’ sign has gone up in Nashport because the new

Longaberger owner isn’t interested in golf

By Tim Feran and Steve Wartenberg THE COLUMBUS DISPATCH

The Longaberger Golf Club is up for sale, with an asking price of $5.4 million.

When it opened in Nash-port in 1999, the course was part of the multifaceted Newark-based Longaberger Co., which included dining and shopping venues along with its basket-making and marketing operations.

The course was ranked the top new golf course in the U.S. by Golf Digest. GolfWeek magazine has rated the club the No. 1 public play course in Ohio for 13 straight years.

But since then, Longaberger has streamlined itself and early this year was sold to Dallas-based CVSL Inc., which is interested in buying and expanding direct-sales companies. Owning golf courses is not part of its business plan.

“The Longaberger Golf Club is a fantastic property, but it obviously doesn’t have anything to do with the Longaberger Co.’s core business of making baskets, so it makes good sense for us to put it on the market,” said Russell Mack, spokesman for Longaberger and CVSL.

“We want to concentrate on what our company does best, which is American craftsmanship and serving our customers and our sales force. Selling the golf course is a logical thing to do.”

The 55,000-square-foot Longaberger clubhouse dominates the view from the fairway on the 18th hole.

Commercial real-estate company Colliers International is handling the sale.

The course is “a very attractive property,” and has had “solid financial performance,” said Keith Cubba, national director of Collier’s Golf Course Brokerage Group.

The property for sale is 645 acres in all and includes a 55,000-square-foot clubhouse, 25-acre practice facility and six maintenance buildings.

The intention is to keep the property as a golf course, Cubba said, calling it the “highest and best use of the property.” But he cautioned that, “if someone has an alternative use that works for them, that’s up to their own discretion.”

Cubba said that it usually takes between 60 and 90 days to locate an appropriate buyer.   The course was for sale before, about three years ago. “The timing of that wasn’t very conducive to a sale as it was during the worst period of the recession,” Mack said.   An additional parcel of land adjacent to the golf course — about 100 acres — also is available, Mack said.

Longaberger outsourced management of the course about four years ago to Billy Casper Golf, a firm that specializes in operating such properties nationwide.

The sale of the Longaberger Golf Club comes in the midst of a challenging time for golf-course owners and operators.  The recession and an oversupply of courses have cut profits and sent many tumbling into bankruptcy during the past few years.

“Central Ohio is overbuilt by way of golf courses,” said A.C. Strip, a Columbus bankruptcy lawyer and court-appointed attorney for several local golf courses that went into receivership, including Tartan Fields Golf Club and the Golf Club of Dublin.   “I live in Dublin and within 10 minutes of my house are 11 golf courses, and within 15 minutes are 15,” he said.

The Columbus Recreation and Parks Department recently closed its Walnut Hill Golf Course and reported that its seven municipal courses lost a combined $63,336 in 2012 and $101,817 in 2011.   “Right now, the profitability isn’t there,” Strip said. “I still project a good five years before golf courses are back up to where they were in their heyday.”

The national scene is similar, said Steven Ekovich, the managing director of the National Golf & Resorts Properties Group, a division of real-estate investment firm Marcus & Millichap.   “From 2007 to 2011, as a result of the financial meltdown, we had five years of declining rounds and declining revenue, and golf-course owners suffered enormously,” he said.

To compensate, golf courses lowered their fees, creating what Ekovich called “a war of green fees” that was good for golfers but drove several courses out of business.

Many of the distressed courses were sold in 2012, when the average sale price of a golf course was $3.1 million, Ekovich said. With these properties off the books, the price rose to $3.3 million for the 55 transactions Marcus & Millichap tracked in the first half of this year.   “We feel confident the market has stabilized,” Ekovich said.   So does Cubba. “Most of the larger lenders in golf have stabilized their portfolios and done the workouts.”    Ever so slowly, new capital is coming into the market.   “We haven’t seen a shortage of buyers, and when more lending comes back for golf, that will help,” Cubba said.

Strip said it is difficult to determine the fair-market value of a central Ohio golf course because “we haven’t had a true sale in several years.”

Tartan Fields, he said, was purchased for about $7 million by the mortgage holder, General Electric Capital Corp., after the owners defaulted on a $13.3 million loan.    “They didn’t actually pay a penny,” Strip said. “It was a credit bid, credited against the mortgage.”

From 2000 to 2010, the number of golf courses increased by about 700, Ekovich said, adding the total dropped by about 300 in the past two years and there are now just under 16,000 courses in the country.   The loss of courses is not necessarily a bad thing.    “We had too many functionally obsolete courses, older courses in bad locations,” Ekovich said. “Now, the healthier ones remain.” tferan@dispatch.com   swartenberg@  dispatch.com

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