Frisco's $2.5 Billion Golf Plan
The PGA of America's new facility could have a huge impact on North Texas.
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Hey Golfers —
Some catchphrases have been used to describe the PGA of America’s new facility in Frisco, Texas.
Seth Waugh called it ‘The Silicon Valley of Golf.’
Gil Hanse dubbed it ‘The American St Andrews.’
While I am not ready to go that far, there is good reason to argue that North Texas is one of the better places in the world for golf-related commerce. Several golf organizations are based out of the North Texas area.
Topgolf
ClubCorp
Arcis Golf
Drive Shack
And it makes sense — the Dallas-Forth Worth area is a warm climate and centrally located in the United States — conducive for the golf industry.
The PGA of America relocating its corporate office from Palm Beach Gardens, Florida, to Frisco, Texas was a logical business decision — they outgrew their office space and needed an upgrade. Frisco came calling with an incredible plan and healthy financial incentives.
One of the selling points the Frisco Economic Development Corporation pitched to the PGA of America to relocate to Frisco? Two world-class golf courses on-site. Similar to the PGA Tour’s headquarters with TPC Sawgrass, its building is just 1,200 feet from the 17th tee.
But that wasn’t all Frisco pitched.
A 500-room Omni resort was in the plan. As well as practice facilities, a short course, and retail space.
Below is a look at the 600-acre plan.
The estimated cost of the total project? $520 million.
While the PGA of America is financially healthy — it would be impossible to spend that kind of capital. According to its most recent 990 Form — the PGA of America did $128 million in revenue in 2019 and had $342 million worth of assets.
There were several moving pieces to make this work financially.
Frisco ISD
City of Frisco
Woods Capital
PGA of America
Stillwater Capital
Omni Hotels & Resorts
Omni Hotels & Resorts created a joint venture with Woods Capital and Stillwater Capital. Together, the group invested $455 million.
Here is where the $455 million went.
Retail space
Purchase the land
Build the Omni hotel & conference center
Build two golf courses & practice facilities
The PGA of America invested $30 million into its new 100,000-square-foot headquarters. For reference, The PGA Tour spent $65 million on its new facility, which came in at 187,000 square feet.
The PGA of America will receive a 20-year tax abatement from Frisco — estimated at around $90 million. One item to consider here — this number came directly from the Frisco Economic Development Corporation. I would be surprised if property taxes were $4.5 million per year on a $30 million building.
The city of Frisco invested a little over $30 million, including nearly $6 million from the Frisco Independent School District.
The city of Frisco will own the golf courses, clubhouse, and practice facility — the PGA of America will operate the golf facility.
The City of Frisco is offering performance incentives valued between $52 - $74 million over 20 years. The state of Texas is also providing a rebate valued at $62 million over ten years.
To sweeten the deal for the PGA of America — the Frisco Economic Development Corporation is investing about $1 million per year for the next 15 years for job creation and PGA tournament incentives.
According to economic impact studies — this project is expected to bring in $2.5 billion to the community over the next 20 years, or $125 million per year.
While that may be a crazy number — it might make sense.
Several high-profile golf events have already been scheduled at PGA Frisco — six major championships over the next 12 years.
2023 — Senior PGA Championship
2025 — Women’s PGA Championship
2027 — PGA Championship
2029 — Senior PGA Championship
2031 — Women’s PGA Championship
2034 — PGA Championship
And while nothing is official — the Ryder Cup will likely visit PGA Frisco in 2037 or 2041.
The last major championship held in Texas was the 1969 U.S. Open — this is huge for a state with golf history.
Economic impact studies are widely debated, especially in the NFL. I have written three newsletters on the impact of golf on local communities, which is significant.
The Ryder Cup at Whistling Straits in 2021 was estimated to have a $135 million impact on the local community.
The PGA Championship at Southern Hills was estimated to have a $140 million impact on the local community.
Seth Waugh said, “this was a great dream.” And I agree with him. The PGA of America is investing $30 million for a new facility — that was needed regardless — will not have to pay property taxes for 20 years, receive investment from the local community, and will have two world-class golf courses they can host major championships at.
Local and State entities will invest around $180 million to possibly see a $2.5 billion return to the community — it sounds like a good deal for them as well.
I’m excited to watch the Senior PGA Championship next year and re-visit this newsletter down the road to see how it played out for all stakeholders.
One last thing to note. As part of the deal — Frisco Independent School District will receive dedicated space at the practice facility and reduced student rates. They will also be holding high school tournaments at PGA Frisco — that’s pretty damn cool.
Have yourself a great Monday. Talk to you next week!
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Loved this piece top man !
Well written