Targeting Northern Virginia golf courses, developers play for the big money
One of the basic tests of golf is to keep the ball in bounds. Errant shots beyond the boundary stakes are penalized by stroke and distance. Players must return to the spot where they launched their shot in addition to taking a one-shot penalty.
Golf in Northern Virginia is heading out-of-bounds. A land-grab currently threatens many of the region’s iconic courses, extending the region’s ever-expanding urban sprawl with new housing subdivisions, townhouse communities and data-center clusters. Recreational green spaces — particularly those as large as golf courses — are an endangered species.
The economics are these: As relentless development raises the value of land in Northern Virginia, the high recurring costs of running a golf course force operators and country clubs to seek higher yields for their properties.
The opportunity dividend can be enormous. One acre of developed land in Northern Virginia can bring ten times — or, in some cases, substantially more — than what it is valued as a golf course. For example, Connecticut-based Wheelock Communities purchased Hidden Creek Country Club in Reston for $14 million last October. The developed value of the land has been estimated at $250 million.
That’s just one scenario in a lucrative, region-wide assault on golf courses by developers.
Wheelock also paid $63.75 million for 12 acres in the adjacent Charter Oak Apartments, or $5 million per acre. That’s right: an acre on the golf course was one-fiftieth the price of an acre in the apartment complex next door. This dramatically lower price per acre for Hidden Creek is precisely because the golf course is not currently eligible for development under Reston’s charter and Fairfax County’s master plan.
Community advocates, residents, environmentalists, golfers and groups including the Reston Association and Rescue Reston adamantly oppose Wheelock’s plans, citing the assault on Reston’s founding charter and the zoning laws established to protect Reston’s two golf courses and green space in the utopian-planned community.
More than golf is at stake. Restonians fear substantial increases in traffic on neighborhood roads, rising home costs, higher taxes, associated public safety problems and a worrisome burden on local schools if further development plans are approved.
Wheelock remains undeterred, convinced that Fairfax County supervisors will continue to express their decades-long bias for development, high density housing and expanding the county’s tax base. The developers are banking that supervisors will change the regulations that prevent building homes on Hidden Creek and nearby Reston National golf courses — both proximate to Silver Line stations
Still, developers must play through the hazards. Asked about potential changes to Reston’s Planned Residential Community (PRC) district, the director of Fairfax County’s Department of Planning & Zoning, says any developer that wishes to build residential units on Reston’s golf courses would have to avoid traps.
“One of the things that the plan that was adopted in 2015 did was explicitly call the golf courses as planned for golf courses and to remain as golf courses,” Fred Selden told Reston Patch. “I can only speak to what kind of development can occur. It’s planned for a golf course. If somebody wants to develop it in some other fashion, they have two options: They have to prove that they have some kind of property rights to build, or they have to come in and request a change to the (Fairfax County) Comprehensive Plan.”
Golf’s current problems factor into decisions that are political as well as economic. Hundreds of courses have closed in recent years as participation by millennials has slipped and demographics turn toward retired players.
“Golf is all but dying,” Tysons-based developer Bob Kettler told the Washington Business Journal. Kettler’s company has built eight golf courses, including what is now Trump National Golf Club in Lowes Island. Kettler bought Goose Creek Golf Club in Leesburg in 2000 and closed it in 2015.
“Goose Creek was obsolete as a golf course,” Kettler contended, but the 111-acre property has yet to be developed for approved housing and commercial space adjacent to the Village at Leesburg.
That’s par for the course. Since the housing market crashed in 2009, more than 500 golf courses have folded across the United States, according to Bloomberg Business. In that time Brambleton, a master planned community in fast-growing Ashburn, abandoned a public golf course project it had planned with new housing.
Compounding the situation in Northern Virginia is the carpetbagger effect: the influence and capital that interests from outside the region exert on local decisions. Again, Wheelock is an example. A real estate developer of master-planned communities and urban mixed-use projects throughout the nation, it is backed by Wheelock Street Capital, an investment firm with locations in Greenwich, Boston, New York City and Tampa.
Hidden Creek members contend that the new owners have scant understanding of the club’s membership and fail to appreciate the qualities of a local club that make investments and experiences unique.
Similarly, multinational players in the commercial real-estate market such as Amazon Web Services and Equinix are pulling the levers of deals in Loudoun County with little regard for local land-use, the lifestyles of residents or the historical context of the land.
Golf courses are so challenged that some developers are willing to give away holes to gain support for the housing developments they seek to build on just part of the property. Home builder CalAtlantic has proposed to give Westpark Golf Course to the Town of Leesburg in exchange for building 27 homes on the 140-acre property. As in Reston, Leesburg residents are fighting for the preservation of the golf course.
Meantime, the outlook for golf courses in Loudoun County becomes a game of real-estate speculation. At Ashburn’s 1757 Golf Club, named for the year Loudoun County was founded, data centers close in from all directions. The current price per acre in Data Center Alley for these massive concrete bunkers: more than $1.2 million an acre. Thus, the sale of 1757 Golf could yield $240 million from the world’s most active data-center market.
In the golf market, only luxury or resort courses are faring well in Northern Virginia’s overheated economy for real estate. And while the economics of most private country clubs are negotiable matters between owners and members, costs can be steep to keep the courses in shape.
Creighton Farms, an exclusive housing community set in Loudoun County’s horse-and-hunt country, has launched a TV advertising campaign to reach a capacity of 275 members for its golf club. The golf club currently has about 240 members, the majority of whom don’t own property in the compound of multi-million dollar homes. The initiation fee for golf membership is $45,000 with annual fees of$11,000.
Similarly, Belmont Country Club in Ashburn has taken to Facebook to advertise its new, no-initiation fee membership in order to attract new members.
Then there’s Trump National Golf Club in Sterling (formerly Lowes Island Golf Club), where a $100,000 initiation fee will get you tee times on two courses beneath a fake waterfall. Play can be slow at times. Golfers can get Trumped: directed to let the real-estate mogul who owns the place play through, security detail and all. Just don’t ask the President about his vanity handicap.
Dale Peskin, an avid golfer, is a member of Hidden Creek Country Club.
— Follow informed coverage of key issues impacting Northern Virginia at Dale Peskin’s “A Pony and a Boat” blog on Medium.com.
— Follow Dale’s posts on Facebook: https://www.facebook.com/dale.peskin
— To receive exclusive alerts to authoritative stories and insights, or to suggest a story, send an email to Dale at dalepeskin02@gmail.com
