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Mike Wagner

  • Karma: +0/-0
LA folks, is $180,000/acre a reasonable amount in Beverly Hills?


There’s a 1.5 acre lot here in Mankato Minnesota’s best neighborhood for an asking price of $300,000


Charlie,


Just to be clear,  have no idea what the right number. That’s why I offered two different estimates that are far apart in value.


Here is a third estimate:


Berkshire Hathaway median price for land in Los Angeles times ten
 
$60,000 x 10 x 295 = $177 million


Annual tax at 5.5% = $9.7 million


Per 300 members


Sale at $177 million = $590,000
Annual assessment on $9.7 = $32,450


Note: if this estimate is correct, LACC would play about $9,7 million vs $600 million annual spending on the homeless.

Hi Tim,

Here is a listing on Redfin for a 2.27 acre parcel about 3/4 mile north of the golf club:

https://www.redfin.com/CA/Los-Angeles/344-Delfern-Dr-90077/home/6824267

You need to reconsider your most recent estimate.  Conservatively, you are off by a factor of 5.  The retail value of residential land is now $600k per acre in typical upper-middle class towns in many areas of the western United States.  I'd argue the primary reason for the high cost of residential land is a notable scarcity in housing supply which makes residential real estate an attractive industry for major investment companies.


We should be discussing how to force the crooks to spend less rather than how to help them steal more.

Charlie Goerges

  • Karma: +0/-0
I’m sorry I made my value comment, Matt was making a beautiful and nuanced argument, and I’ll bet the actual value makes little difference to his point.


The way I understand Matt’s point is that golf is a ripe target at this point and the courses and clubs should be doing more to help ease the housing situation, if for no reason other than self-preservation.


I know it isn’t LACC’s job to fix the housing market, but things are pretty dire out there, and being seen as totally indifferent makes them and others like them a target. It would take one ballot initiative or amendment initiative taxing golf at full-market, best-use to end a bunch of clubs and courses.


This is a bright group, I bet there are a lot more ideas out there about what can be done.
Severally on the occasion of everything that thou doest, pause and ask thyself, if death is a dreadful thing because it deprives thee of this. - Marcus Aurelius

Tim_Weiman

  • Karma: +0/-0
I’m sorry I made my value comment, Matt was making a beautiful and nuanced argument, and I’ll bet the actual value makes little difference to his point.


The way I understand Matt’s point is that golf is a ripe target at this point and the courses and clubs should be doing more to help ease the housing situation, if for no reason other than self-preservation.


I know it isn’t LACC’s job to fix the housing market, but things are pretty dire out there, and being seen as totally indifferent makes them and others like them a target. It would take one ballot initiative or amendment initiative taxing golf at full-market, best-use to end a bunch of clubs and courses.


This is a bright group, I bet there are a lot more ideas out there about what can be done.
Charlie,


I’m career oil industry by background. Believing one should understand the economics rather than just political arguments is in my blood.


Besides, there does seem to be a pretty serious argument about property rights. Should clubs just abandon the defense of property rights?


I am also wondering what “full-market, best use” actually means? Does “full market” require an actual bona fide purchase offer?
Tim Weiman

Tim_Weiman

  • Karma: +0/-0
Mike Wagner,


I think what some here are saying is that they believe the country (or State of California) has or will move so far Left that urban golf clubs are seriously politically vulnerable for their very existence. Moreover, they appear to believe such clubs can and therefore should take some action “for the benefit of the community” that will stave off legislation that would end their existence.


Given that their perspective is basically a social/economic justice argument and they openly suggest LACC annual tax assessment (apparently about $200,000) isn’t “fair”, it seems only logical to ask “what is fair.”. Then too, if one believes these clubs face extinction based on just one ballot initiative, how likely is it that anything short of “full market, best use” will satisfy those who are determined to advance such legislation?


By the way, I recently joined Old Barnwell and one of the reasons I did was Nick Schreiber’s vision for the club which essentially includes doing some things for the community of Aiken. However, I don’t think what Nick has in mind includes submitting to a “full market, best use” tax assessment: what if someone were to argue “those 500 acres would be the perfect place to build a EV manufacturing plant”? Pay up!


Mike it would be great to catch up in person sometime, perhaps for golf at Old Barnwell.


Hope you are well.
Tim Weiman

Charlie Goerges

  • Karma: +0/-0
It’s not some Bolshevik revolution that we’re worried about. It’s bad city planning. I’m definitely not doing this topic justice my apologies.
Severally on the occasion of everything that thou doest, pause and ask thyself, if death is a dreadful thing because it deprives thee of this. - Marcus Aurelius

Matt Schoolfield

  • Karma: +0/-0
What tax rate do you think a club like LACC should pay?
This is as complex of a question as there is, and will touch on every aspect of political philosophy, so I don't want to have some rote equation, but I will try to actually answer your question.

Any community has an existing tax base. One could argue forever about the role of gov't, and what the size of that tax base should be. To me, that's a political issue that communities solve democratically, and people vote at the ballot and with their feet.

To me, taxes should be as low as possible, insofar that the community can provide reasonable safety and the means to human flourishing for all it's residents. Flourishing means education, transportation, general welfare, recreation (most people play muni golf, after all); generally, all of the things that we gain and save on by by living together and pooling our money rather than living apart (this is the same principal behind the 501c7).

The reason why this situation is so problematic, is that our many of our cities are not providing the means to human flourishing right now, because young people are looking at home prices approaching 25x median annual income after taxes, effectively meaning that any 30 year loan would be a young person's entire paycheck.

So why do property taxes matter? Property taxes are effectively opt-in wealth taxes. Property taxes are basically the only taxes where people can, by definition, afford to pay them. They act to prevent land hoarding. If reasonable property taxes become unaffordable to the property owner, that means that the land is not being used to create value. The natural progression would be to increase the efficient use of the property's value (that is, the home becomes a duplex to generate additional income).

Thus, when we see enough residents to form an effective political coalition regarding reasonable access to property-ownership (a means to human flourishing) then we should expect them to target raising the rates of property taxes. This is why we are talking about raising property taxes, and not, say, income or sales taxes. Note: I basically agree with them here. I know plenty of folks making very good money, who still can barely afford a starter home in their late 30s and early 40s. I also know plenty of retirees fighting to preserve their low property tax rates while at the very same time passionately fighting to block new residences for the next generation for reasons as flippant as that they appear a bit gauche. This is why the political disagreement is becoming a political brawl.

Now, open space obviously has value to the city (again, this is my main argument to folks in this movement against converting municipal golf courses). Again, though, not all open space is not created equal. Thus, if I had to have a clear answer, I think a private course should be taxed around the rate of farmland (which I think is a reasonable compromise), because unless the course is actively set up as a native wildlife or plant life preserve, it's effectively an urban turf/sod farm. Courses that are providing actual benefits for the native flora and fauna I think should be able to get some tax relief. That said, I'm not the person we're trying to convince.

This is why I harp on simple golf benefits for non-golfers. I'm trying to focus on operators creating a real, tangible things and experiences for the greater community that they will lose if the local course goes away. This could be something as simple as putting a clubhouse grill sign on the street, inviting people in, and staying open for dinner. It could be something like having a warming hut-style food truck strategically place at the edge of the property between two holes to allow the neighborhood a place to stop in on a weekend walk. I become more and more worried as public and municipal courses have mimicked private clubs, and operate as little fiefdoms, trying to keep others out, because I know that, fair or not, we are much more vulnerable than a lot of us think we are.
« Last Edit: May 06, 2023, 02:24:33 PM by Matt Schoolfield »

Kalen Braley

  • Karma: +0/-0
Matt,

Excellent last post.

One of the trends we've been seeing more and more the last few years is in the following link.  Its a triple whammy of sorts in that 1) Its removing inventory making ownership less likely and more expensive for younger people, 2) Resulting in raised rents, 3) Making it even harder to save to purchase one day.

https://www.cnbc.com/2023/02/21/how-wall-street-bought-single-family-homes-and-put-them-up-for-rent.html

As for this paragraph:

"To me, taxes should be as low as possible, insofar that the community can provide reasonable safety and the means to human flourishing for all it's residents. Flourishing means education, transportation, general welfare, recreation (most people play muni golf, after all); generally, all of the things that we gain and save on by by living together and pooling our money rather than living apart (this is the same principal behind the 501c7)."

Not only is this not happening, but its going in the opposite direction with further tax cuts for the very rich and cuts in social safety net programs and services to pay for it.  To say its disturbing is a gross understatement.

Mike Wagner

  • Karma: +0/-0
Mike Wagner,


I think what some here are saying is that they believe the country (or State of California) has or will move so far Left that urban golf clubs are seriously politically vulnerable for their very existence. Moreover, they appear to believe such clubs can and therefore should take some action “for the benefit of the community” that will stave off legislation that would end their existence.


Given that their perspective is basically a social/economic justice argument and they openly suggest LACC annual tax assessment (apparently about $200,000) isn’t “fair”, it seems only logical to ask “what is fair.”. Then too, if one believes these clubs face extinction based on just one ballot initiative, how likely is it that anything short of “full market, best use” will satisfy those who are determined to advance such legislation?


By the way, I recently joined Old Barnwell and one of the reasons I did was Nick Schreiber’s vision for the club which essentially includes doing some things for the community of Aiken. However, I don’t think what Nick has in mind includes submitting to a “full market, best use” tax assessment: what if someone were to argue “those 500 acres would be the perfect place to build a EV manufacturing plant”? Pay up!


Mike it would be great to catch up in person sometime, perhaps for golf at Old Barnwell.


Hope you are well.


Tim -


Appreciate the note and the invite! Just read up on Old Barnwell .. what more could you ask for? Seems like an incredible place, and love his vision.


Please continue to educate with your experience. I'm from Seattle and live in AZ. I've watched what was an amazing city to grow up in years ago turn into a shit hole .. along with Portland, San Fran, and LA. There's not a politician in any of those cities I'd hire to make a cup of coffee.


If you've ever in Scottsdale / Phoenix, would love to play some golf with you.


Tim_Weiman

  • Karma: +0/-0
Mike,


Re Old Barnwell, I think it is clear Nick Schreiber and his wife Sarah have a distinct vision for the club, but I should add that includes building a really good golf course and I think Brian Schneider and Blake Conant are doing that.


What stands out for me is that I think the course will have its own character: it doesn’t remind me of anywhere else. That is a big deal in my book.
Tim Weiman

Tim_Weiman

  • Karma: +0/-0
Matt,


Once again, I appreciate and respect your input on this topic, but I am confused about one thing: what is the value of farmland in Los Angeles? Does farmland in Los Angeles even exist?


Not being a farmer I relied on Google. Apparently the average price of farmland in California is $7,200. If we increased that be a factor of ten, LACC would only be worth about $21 million ($7,200 x 10 x 295), far below my earlier low estimate of $53 million.


So, let’s multiply this by another factor of 10. The property is now worth $210,000,000 or still way below “full market, best use) meaning residential and commercial development.


As best I can tell, the annual tax would be about $21 million (assuming a tax tax of 9.5%), still not much compared to the estimated annual cost of homeless support of $600 million.
Tim Weiman

Joe_Tucholski

  • Karma: +0/-0
We should be discussing how to force the crooks to spend less rather than how to help them steal more.


Mike, the unfortunate thing is each side thinks the other is the crook and can't understand how they could be wrong.

Matt Schoolfield

  • Karma: +0/-0
Once again, I appreciate and respect your input on this topic, but I am confused about one thing: what is the value of farmland in Los Angeles? Does farmland in Los Angeles even exist?
I think discussing the details and aiming for an approximate number is unhelpful. My point in bringing up LACC in the first place is that (1) the discussion of one of property taxes which is interwoven to the crisis I reference, (2) LACC is a 36 hole golf course with a clubhouse that is probably better described as a small hotel, with an absurd annual property tax rate of $1307 (my estimate) ($300,000 revised estimate), (3) it will be spotlighted in a place of prominence this year in a place suffering the extremes of this crisis. This is why I thought LACC was illustrative, but I could have chosen any club paying even somewhat generous taxes in a similar area. The Country Club, for example, may have been a more helpful illustration, as it is directly adjacent to Newton, MA.

It doesn't matter if we calculate the land at the farmland median, or if we add in a premium for it's adjacency to the city. My point is only that this course is a highly visible symbol of the root problem (insufficient access to property) that this political movement is based around. It doesn't matter really matter what the general city/state fund is, as the function of the property taxes here isn't about raising revenues, but is about efficient use of land.

Discussing this as an issue of homelessness misses the point. This is a crisis of the unattainability of property, at any reasonable price, for two entire voting age generations. I'm not at all worried about these city's budgets. I am very much worried about golf becoming a symbol of property-hoarding decadence, because (for the last 20 years, honestly) the existing property owners have largely ignored, even benefited from, this very real and accelerating crisis for these future generations.
« Last Edit: May 13, 2023, 12:45:45 AM by Matt Schoolfield »

Mike Wagner

  • Karma: +0/-0
Once again, I appreciate and respect your input on this topic, but I am confused about one thing: what is the value of farmland in Los Angeles? Does farmland in Los Angeles even exist?

It doesn't matter if we calculate the land at the farmland median, or if we add in a premium for it's adjacency to the city. My point is only that this course is a highly visible symbol of the root problem (insufficient access to property) that this political movement is based around. It doesn't matter really matter what the general city/state fund is, as the function of the property taxes here isn't about raising revenues, but is about efficient use of land.

Discussing this as an issue of homelessness misses the point. This is a crisis of the unattainability of property, at any reasonable price, for two entire voting age generations. I'm not at all worried about these city's budgets. I am very much worried about golf becoming a symbol of property-hoarding decadence, because (for the last 20 years, honestly) the existing property owners have largely ignored, even benefited from, this very real and accelerating crisis for these future generations.


Please define "access" and "reasonable" in the context you've used.


Where exactly is this property "unattainable?" Are there some sort of laws in the area that prohibit a certain people from purchasing property?




Matt Schoolfield

  • Karma: +0/-0
Please define "access" and "reasonable" in the context you've used.
The reason why this situation is so problematic, is that our many of our cities are not providing the means to human flourishing right now, because young people are looking at home prices approaching 25x median annual income after taxes, effectively meaning that any 30 year loan would be a young person's entire paycheck.
There is no hard and fast definition, but when this type of situation is happening, you know you're pretty far away from "reasonable" prices for real estate. The normal self-balancing of supply-demand system as been broken by zoning. There is no legal way to increase the supply to meet demand, hence prices are skyrocketing, adults like myself have roommates in their 30's and 40's, and illegal units proliferate nextdoor to retirees living alone in 3-bedroom single family homes. All because these young folks didn't have the sensible forethought to be born 20 years earlier.

These dichotomy of living situations in these communities is growing, and becoming more bottom-weighted, and this is where the political brawl is fomenting. Instead of seeing housing supply grow with demand, we are living though a political cascade, and when the dam breaks (and that is exactly happening now with the election of powerful pro-housing candidates like Scott Wiener), then we may have a potential crisis for golf courses.

I would not feel like cassandra/chicken-little talking about this if did not see this as a coming cascade. Once the generation suffering under this shortage holds the reigns of power, the changes will accelerate rapidly. Golf courses will do well to get out ahead of what's happening and become well-liked members of the while community as soon as possible. 

Tim_Weiman

  • Karma: +0/-0
Once again, I appreciate and respect your input on this topic, but I am confused about one thing: what is the value of farmland in Los Angeles? Does farmland in Los Angeles even exist?
I think discussing the details and aiming for an approximate number is unhelpful. My point in bringing up LACC in the first place is that (1) the discussion of one of property taxes which is interwoven to the crisis I reference, (2) LACC is a 36 hole golf course with a clubhouse that is probably better described as a small hotel, with an absurd annual property tax rate of $1307 (my estimate) , (3) it will be spotlighted in a place of prominence this year in a place suffering the extremes of this crisis. This is why I thought LACC was illustrative, but I could have chosen any club paying even somewhat generous taxes in a similar area. The Country Club, for example, may have been a more helpful illustration, as it is directly adjacent to Newton, MA.

It doesn't matter if we calculate the land at the farmland median, or if we add in a premium for it's adjacency to the city. My point is only that this course is a highly visible symbol of the root problem (insufficient access to property) that this political movement is based around. It doesn't matter really matter what the general city/state fund is, as the function of the property taxes here isn't about raising revenues, but is about efficient use of land.

Discussing this as an issue of homelessness misses the point. This is a crisis of the unattainability of property, at any reasonable price, for two entire voting age generations. I'm not at all worried about these city's budgets. I am very much worried about golf becoming a symbol of property-hoarding decadence, because (for the last 20 years, honestly) the existing property owners have largely ignored, even benefited from, this very real and accelerating crisis for these future generations.


Matt,


Sorry, but what you call “unhelpful” just isn’t realistic IMO. The city of Los Angeles has already been given estimates of LACC’s value at $6-9 billion.


I just don’t see how a discussion of economics can be avoided if entities like private urban golf courses are truly so politically vulnerable.


Moreover, this is a discussion group of reasonably like minded people. We all love great golf courses. If we can’t have a discussion of all the issues pertaining to urban private golf courses, then how likely is a successful dialogue between, say, LACC and the Los Angeles City Council?
Tim Weiman

Matt Schoolfield

  • Karma: +0/-0
I just don’t see how a discussion of economics can be avoided if entities like private urban golf courses are truly so politically vulnerable.


I don’t think it’s helpful because of the worst case scenario comes to pass, and private golf course taxes are reassessed at unsustainable levels, it won’t be a negotiation. For LACC it has to happen at the state level via ballot proposition.


I’m not here to discuss my personal politics on the subject. I’m here to waive my hands in the air and try and explain the underlying looming economic and political reasons why something as obscure as removing property tax exemptions for private courses in Newton, MA is even being discussed, let alone has a chance of becoming law.

Tim_Weiman

  • Karma: +0/-0
I just don’t see how a discussion of economics can be avoided if entities like private urban golf courses are truly so politically vulnerable.


I don’t think it’s helpful because of the worst case scenario comes to pass, and private golf course taxes are reassessed at unsustainable levels, it won’t be a negotiation. For LACC it has to happen at the state level via ballot proposition.


I’m not here to discuss my personal politics on the subject. I’m here to waive my hands in the air and try and explain the underlying looming economic and political reasons why something as obscure as removing property tax exemptions for private courses in Newton, MA is even being discussed, let alone has a chance of becoming law.
Matt,


I don’t see it as discussing my personal politics. Rather, having raised the possibility of a worst case scenario, it seems only reasonable to explore whether there are practical steps that can be taken to avoid that scenario.


If that is not your interest, fair enough. My impression from your earlier posts was that you actually did have such an interest. No worries either way.
Tim Weiman

Matt Schoolfield

  • Karma: +0/-0
I don’t see it as discussing my personal politics. Rather, having raised the possibility of a worst case scenario, it seems only reasonable to explore whether there are practical steps that can be taken to avoid that scenario.


The best I got for you was my reply earlier (sorry I can’t fix the font size issue):


Take the LACC example. What exactly should it do?
I'm not entirely sure. I wish I had a better answer for you. This is a collective problem and there is no way to fix it that won't be messy. The 501(c)(7) legal structure limits what clubs are even allowed to do as far as making themselves indispensable to the community. Changing over to the British private club tax system would help there immensely.If I were on a board, at a minimum, I would want to be mindful of public relations. I would want the club on record supporting attainable home-ownership in the area.I think large memberships are also helpful to public perception, the Olympic Club does well to retain 10,000+ members (you might actually meet one occasionally).As it stands, the occasional philanthropy for a local 9 hole during a major public event is nice enough, I just don't think it's going to cut it going forward even if it is non-trivial money. There are tax changes that might annoy these clubs, but there are also changes that could really hurt them. I hope when the changes come, we don't lose any courses.
« Last Edit: May 06, 2023, 09:11:16 PM by Matt Schoolfield »

Matt Schoolfield

  • Karma: +0/-0
I wanted to set some things straight. I was going through the tax for LACC again, and I've found that their property is four separate parcels, not one. Their tax bill is probably somewhere closer to $320,000. I would still argue that this is quite small in relationship to the value of the entire property, but it's certainly not as shocking is the small unimproved plot associated with their address that I found initially.

Just want to keep everything above board here, eat some crow, and will update my previous posts.
« Last Edit: May 11, 2023, 08:41:58 PM by Matt Schoolfield »

Chris Hughes

  • Karma: +0/-0
Tax everyone who earns more than $100,000/year 10cents for every hour they are outdoors. It is easily monitored through our phones. Use the money to stabilize climate change. I’d pay $1 per day.


If you don’t like it stay inside.


Boom.   ;)


Leave it to Gavin, he will nail it...
Fear not C.S. -- the rule-of-law will prevail again soon -- this long-running feature premiers on January 20th.

Rob Marshall

  • Karma: +0/-0
If you want to look at tax breaks for country clubs look no further than ERC............
If life gives you limes, make margaritas.” Jimmy Buffett