The Money Behind Building a Golf Course
Lubbock, Texas new $11 million golf course.
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Hey Golfers —
Lubbock, Texas is getting a new golf course.
Red Feather Golf Club is being built, with plans to open summer of 2023. I caught up with the Red Feather team last week to discuss the business of building a golf course.
Former PGA Tour player J.J. Killeen is the President of Red Feather, and Garrett Holt is the Head Superintendant; they are heading up the project.
Think of building a golf course like building a home. The designer is the general contractor, and like building a house, a golf course build depends on several variables; a few of the key variables are below.
Land
Location
Designer & Builder
Let’s dive into Red Feather.
Lubbock has a population of 257,000 — its metro area has a population of 325,000. And it is growing quickly.
1980 — 173,000
1990 — 186,000
2000 — 199,000
2010 — 229,000
2020 — 257,000
Lubbock only has seven golf courses to serve the 325,000 population. To put that in perspective, cold climate Cedar Rapids, Iowa has a metro population of 257,000 and has eight golf courses.
The genesis of Red Feather is a group of entrepreneurs who owned a cotton field in south Lubbock; included in that group is Red Feather's owner and CEO, Brad Ralston. They had plans to develop the property into a neighborhood.
But there was an issue.
A majority of the property was in a floodplain. So they pivoted and decided to build a private golf course with a real estate component.
One of the first items Red Feather did was to select a designer. They landed on King-Collins Golf.
King-Collins is behind one of the best 9-hole golf courses in the country, Sweetens Cove, in Tennessee. They are nearly finished with Landmand Golf Club in Nebraska and have worked on several other projects.
Due to Lubbock’s unique water retention detention situation with playa lakes, Red Feather is spending extensive capital on building a 3.5 acre, 47-foot-deep playa lake that can handle the water runoff from over 900 acres.
Taking that a step further — Red Feather will not have concrete drainage systems. They are installing top-of-the-line irrigation equipment for around $2.5 million. The sprinkler heads and swing joints are $600 apiece — Red Feather is installing 1,200, totaling $720,000 for sprinkler heads alone. Labor to install the irrigation system was over $1 million.
Since Red Feather is built on a flat cotton field, they will move around 1 million cubic yards of dirt to build the golf course. Equipment rental to move that much dirt to shape a golf course is pricey.
D8 Bulldozer — $25,000 per month
Other equipment — $5,000 - $10,000 per month
Red Feather was running two D8 Bulldozers per month for a period of time. They will spend between $4 - $5 million on rental equipment and diesel fuel when the project is complete.
Red Feather initially budgeted for $2.50 per gallon of diesel fuel; now, they are spending north of $4 per gallon — they are using about 1,000 gallons of diesel every day.
Red Feather is bringing in 300 - 350 mature trees. A mature tree can cost around $15,000. This is where Red Feather got creative, they purchased a 40-acre tree farm, and they will move the trees themselves, saving a significant amount of money.
Total cost to build Red Feather? Around $11 million.
Keep in mind that doesn’t include the original cost of land.
It also doesn’t include the maintenance shed and equipment or the clubhouse and casitas they are building for the National Members.
Red Feather’s planned maintenance cost?
$2 million for Toro equipment
$500,000 for the maintenance shed
An interesting thing that Garret Holt pointed out to me?
If done correctly, golf course renovations are typically more expensive than a new build golf course. This is evident in a couple of clubs in Texas that recently went through renovations and spent significantly more than Red Feather is spending.
Here is a breakdown of Red Feathers’ membership fees.
Local membership — $50,000 initiation & $750 per month
National Membership — $15,000 initiation & $4,800 per year
Red Feather will limit local members to 350 and national members to 75.
Let’s assume Red Feather sells 90% of their membership. Initiation revenue breakdown:
Local membership — $15,750,000
National membership — $1,020,000
Annual member revenue:
Local membership — $2,835,000
National membership — $326,400
Red Feather also has a social membership available; the breakdown above does not include that.
It also does not include the projected food and beverage revenue Red Feather will bring in annually.
While Red Feather initiation fees may be considered expensive, they will have a laid-back community atmosphere.
No tee-times
No dress code
Pickleball courts
Halfway house with several TVs
And the design of the golf course promotes pure fun and enjoyment. There will be several loops from the clubhouse with less than eight holes.
Red Feather is pivoting away from the traditional country club culture — and in my opinion, that is a smart business decision. Especially given the current growth of the game and the explosion of golf entertainment promoting a social golf experience.
Have yourself a great Monday. Talk to you next week!
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pickleball courts are clutch!
Really love the idea of a laid-back community and I hope this trend continues to pick up - beautiful properties without the country club stuffiness.
However, would still love tee times