By now you should have received from the HOA a copy of the report submitted by the Golf Course Owners to the Board titled “Northern California Golf Industry Market Conditions”.  We believe the report was commissioned by the Owners to support their request for a home owners subsidy.  It speaks in dire terms about what might happen to property values if the golf course were to close.  Its Summary concludes that if support is not forthcoming redevelopment is the best option.  It is clearly biased in that direction.  It offers no indication how difficult and all consuming of time and money it would be to even attempt to convert our ecosystem to additional residential development.  More on this in detail on a blog to follow.

We have analyzed the report in some detail and found it misleading and short on facts.  We have attached an annotated PDF version which highlights these areas,  We encourage you to look at the annotated version and then decide.  Click on the following link to see the Report,  Golf Market Conditions Report Annotated.

The following are some comments highlighting the difficulties we found with accepting the original report at face value.

1. Since the Owners paid for it, as part of their approach to the community, its objectivity is suspect from the start.
2. The summary of findings says categorically that “clearly, an abandoned golf course has the most extreme impact” on home values. Then, on p.20, it states that redevelopment with residences would have the most extreme impact on values at MC (allegedly because MCGC is so wonderful, but with no research data to support this). The summary makes no mention of this significant “finding.” The report contradicts itself, in order to claim that the Owners alternative to a subsidy will have the most impact on our values.
3. The report also says MC is especially vulnerable to a closure because of its small size, but its size is between Rocklin and Rancho Mirage, two of the comparable examples.
4. The study predicts combined increases in labor and water costs could be $60-90K per year, or $240-360K by the fourth year of their proposed 10-year plan. These increases will consume the entire $300K per year they want from us by the fourth year. Thus, if they are losing money now, they will again be losing from the fourth year on. Their proposed plan was a plan for continued failure, at our expense, according to his own study. That’s how much faith we can put in their success plans and proposals that they may want us to buy into.
5. Exhibit 6, estimating property value impacts from course closures, and Exhibit A-1, historical house values during the relevant years, don’t agree. The historical values from A-1 show a 14.8% increase trend in Rocklin (perhaps the most relevant example) and a 24.5% increase in Rancho Mirage (another California community). However, Exhibit 6 uses an increase of 24.4% in Rocklin to calculate “expected value” in 2016 and an expected increase of 16% in Rancho Mirage. Thus, the “expected” value for Rocklin in Exhibit 6 exaggerates the supposed decreases in Rocklin values, to make the closure impact in MC look scarier. For some unstated reason, the study did not apply its own historical home sales information to the “expected” values and losses in at least these two relevant communities.
6. While we agree that golf is a mature industry and is experiencing consolidation, the decline is not cataclysmic. Well managed golf courses are and will continue to survive and thrive.
7. The bottom line is that their data shows an actual increase in property sales values post closure at Rocklin, not a substantial decrease.