I enjoyed reading Malcolm Gladwell’s (article? newsletter?) How the Private Golf Clubs of Los Angeles Can Right Their Wrongs, a follow-up to a half-decade old podcast A Good Walk Spoiled about private golf clubs:
After all, the taxes on a decent-sized Beverly Hills half-acre lot might easily exceed $100,000. But the fancy golf clubs of Beverly Hills run in excess of 200 acres. Some more than 300. The taxes on a piece of property that massive must be astronomical! How do private golf clubs stay in business?
If you haven’t listened to the episode (and you should, if not!), I don’t think I’m giving anything away when I give you the answer. It’s obvious. Private golf courses survive in Los Angeles because they don’t pay property taxes.
So a 250-acre golf club should pay $50,000,000 in property taxes in Bevery Hills, but just doesn’t, because of rich people schmoozing. Sounds about right. The land itself, he estimates, is worth a much more staggering $25,000,000,000. He’s got a fun idea for re-developing it into housing and public parks and keeping everyone happy because they get richer at the same time.
I’m sure it will never work. Rich people schmoozing is essentially the most powerful force there is and they like their golf. I suppose it only would if those folks thought it sounded like more fun than golfing, which I suppose they might when they get too old to golf.
I’m no golf course financial expert, but I’ve always found them odd to begin with. You really do have to have this enormous plot of land, and the closer to where people live who can afford the time and money to play golf the better. I grew up in Wisconsin where at the very best you’ll get 6 months of playable time. So this massive investment is totally neutered of any ability to make money half the year. And not just Wisconsin but anywhere with truncated seasons, like all of Canada. Too hot to golf is a thing too. Fortunately for the owners, they can just fire everyone half the year 😑. And if you do it somewhere like Alaska, you’ll be hampered by the simple fact that just not that many people live in or travel to Alaska.
So maybe build it somewhere nicer? Surely California could use some new golf courses? Sure, but I bet the land cost and tax cost are well more than double a Wisconsin golf course anywhere you look. Not to mention California is in a perpetual drought adding yet another dubious ethical angle to all this: golf courses need a boatload of water for all the grass. I imagine the same problem exists in places where water is just harder to come by, say desert heavy states like Nevada or Arizona.
Kinda feels like golf courses are either too expensive (for any number of reasons) or too underutilized (for any number of reasons). I’m wrong though, of course. There are loads of golf courses and for the most part, they seem to do fine if not appear to be raking it in. Speaks to my own general ignorance of how the world works.