Shaker Hills faces foreclosure

[kmorr2586]

http://www.bizjournals.com/boston/real_estate/2012/03/shaker-hills-golf-club-to-be-auctioned.html

[sabram]

That's a shame, but all too common the last few years

[Shemp]

That's a nice course, in an affluent area, with a good clubhouse. Management had to screw it up, the debt service isn't that bad.

[raynorfan1]

[quote name='Shemp' timestamp='1333479699' post='4641079']
That's a nice course, in an affluent area, with a good clubhouse. Management had to screw it up, the debt service isn't that bad.
[/quote]

I don't think that's the case. Shaker Hills was a local pioneer in the "daily fee country club" market, but that market is suddenly pretty crowded, and that local market probably has an oversupply of quality golf. Just on the "daily fee country club" model, they had to compete with Stowe Acres, Red Tail, Cyprian Keyes, and others. Add to that some good private clubs with low barriers to entry (The International, Charter Oak, etc.) and I think the simple economics was too much supply and not enough demand.

I do wonder if these daily fee country clubs can survive without a built-in membership pool from an associated housing development (ala Pinehills). I have my doubts that the Shaker/Stowe/RT/Cyprians of the world can stand on their own.

[DLiver]

[quote name='raynorfan1' timestamp='1333487032' post='4642073']
[quote name='Shemp' timestamp='1333479699' post='4641079']
That's a nice course, in an affluent area, with a good clubhouse. Management had to screw it up, the debt service isn't that bad.
[/quote]

I don't think that's the case. Shaker Hills was a local pioneer in the "daily fee country club" market, but that market is suddenly pretty crowded, and that local market probably has an oversupply of quality golf. Just on the "daily fee country club" model, they had to compete with Stowe Acres, Red Tail, Cyprian Keyes, and others. Add to that some good private clubs with low barriers to entry (The International, Charter Oak, etc.) and I think the simple economics was too much supply and not enough demand.

I do wonder if these daily fee country clubs can survive without a built-in membership pool from an associated housing development (ala Pinehills). I have my doubts that the Shaker/Stowe/RT/Cyprians of the world can stand on their own.
[/quote]

I think you are right on the money. There are a lot of quality golf options in the area. It is too bad, because that is a really nice facility.

[MyShortGameSucks]

That is a shame although to some extent they did bring it on themselves. Service has always been less than stellar there and the staff often displayed an arrogance quite unbecoming of a public course. Also Red Tail up the road just killed Shaker. Instead of trying to actively compete against it with marketing and deals like say Waverley Oaks vs Pinehills they have just rested on their laurels. Big mistake.

When I first came over to USA in 95, Shaker really was the gold standard for upscale privates. At the time there was no better public in MA. Unfortunately times change. I hope someone buys it up and lowers prices a bit. There is no reason Red tail and Shaker should not coexist.

[raynorfan1]

[quote name='MyShortGameSucks' timestamp='1334324590' post='4714020']
That is a shame although to some extent they did bring it on themselves. Service has always been less than stellar there and the staff often displayed an arrogance quite unbecoming of a public course. Also Red Tail up the road just killed Shaker. Instead of trying to actively compete against it with marketing and deals like say Waverley Oaks vs Pinehills they have just rested on their laurels. Big mistake.

When I first came over to USA in 95, Shaker really was the gold standard for upscale privates. At the time there was no better public in MA. Unfortunately times change. I hope someone buys it up and lowers prices a bit. There is no reason Red tail and Shaker should not coexist.
[/quote]

Shaker was definitely the gold standard when it opened. The first of its kind, at least locally. But I do think that years of tee sheets being full with high greens fees created an arrogance that did not serve them well when the market got more competitive.

I'm actually not sure that Shaker Hills and Red Tail can coexist. Are there enough golfers in their immediate local area willing to pay ~$100 a round? 10 years ago, Shaker attracted people from inside 128 who were willing to pay - now we have almost 10 choices that are all about the same:

Pinehills Jones
Pinehills Nicklaus
Stowe Acres North
Stowe Acres South
Cyprian Keyes
Blackston National
Waverly Oaks
Red Tail
Shaker Hills

So where I might have played Shaker Hills 10 times a season, now it's down to one or two.

[DCSerafin]

[quote name='raynorfan1' timestamp='1334341978' post='4715808']
[quote name='MyShortGameSucks' timestamp='1334324590' post='4714020']
That is a shame although to some extent they did bring it on themselves. Service has always been less than stellar there and the staff often displayed an arrogance quite unbecoming of a public course. Also Red Tail up the road just killed Shaker. Instead of trying to actively compete against it with marketing and deals like say Waverley Oaks vs Pinehills they have just rested on their laurels. Big mistake.

When I first came over to USA in 95, Shaker really was the gold standard for upscale privates. At the time there was no better public in MA. Unfortunately times change. I hope someone buys it up and lowers prices a bit. There is no reason Red tail and Shaker should not coexist.
[/quote]

Shaker was definitely the gold standard when it opened. The first of its kind, at least locally. But I do think that years of tee sheets being full with high greens fees created an arrogance that did not serve them well when the market got more competitive.

I'm actually not sure that Shaker Hills and Red Tail can coexist. Are there enough golfers in their immediate local area willing to pay ~$100 a round? 10 years ago, Shaker attracted people from inside 128 who were willing to pay - now we have almost 10 choices that are all about the same:

Pinehills Jones
Pinehills Nicklaus
Stowe Acres North
Stowe Acres South
Cyprian Keyes
Blackston National
Waverly Oaks
Red Tail
Shaker Hills

So where I might have played Shaker Hills 10 times a season, now it's down to one or two.
[/quote]
They had two problems. They got killed by the drought in 2009 where their conditions were pitiful BUT they were in fact arrogant. Blackstone also got hit hard, in fact harder with the drought. The difference was the Customer Service!!! There was/is no comparison. The one time I played there was on an In-climate day. While coming up the ninth it literally started raining so hard there were small rivers on the cart paths. Me and playing partner went into the clubhouse to see if it would slow up. As soon as we walked in, we were not greated but INFORMED that if the group behind us continued, we were done, we were like fine. of course that group did not continue, but that left such a bad taste I never went back, heck most course will give you a 9hole rAin-check if you play under 9holes. At most courses, there's beer flowing, people laughing etc, not there. Comparing an experience at blackstone.... Went up there on a busy late Friday afternoon around 4 pm? Walk in the clubhouse... Hi, looking to sneak out a twosome...guy looks at me! Who's your second! I point down to my 10 yo son, he says, he doesn'tt pay. Give me the 9 hole green and cart fee and go have fun. To add, they always have deals!!! That is why Shaker has just been auctioned, in my opinion. Most of these course are all the similar, obviously layout and dificullty vary but two of the best in the immediate area are blissful meadows and blackstone.... Great geople who run it, typically great conditions for a semi-private, decent prices and a good challenge. Othe cheaper options include Green Hill, some excellent greens!!

[MyShortGameSucks]

You hit the nail on the head - the pro shop attitude and arrogance just killed that place.

I think that Red Tail and Shaker could co-exist BUT any new owner/management would have to reinvent the place as more of a value place. I have no clue what Red tail charges these days but assume it $100+. Shaker needs to be at the 65-70 level inc cart and range balls.

Waverly Oaks has shown this can be done. They have survived against higher priced/quality Pinehills and lower priced Crosswinds.

[raynorfan1]

[quote name='MyShortGameSucks' timestamp='1334487225' post='4724620']
You hit the nail on the head - the pro shop attitude and arrogance just killed that place.

I think that Red Tail and Shaker could co-exist BUT any new owner/management would have to reinvent the place as more of a value place. I have no clue what Red tail charges these days but assume it $100+. Shaker needs to be at the 65-70 level inc cart and range balls.

Waverly Oaks has shown this can be done. They have survived against higher priced/quality Pinehills and lower priced Crosswinds.
[/quote]

Red Tail peaks @ $99 with cart and range balls for weekend prime time in the summer. And at a similar price point, there really isn't much comparison between the two.

I agree that Shaker Hills [i]could[/i] recast itself at a lower price point - maybe $65 prime time, sub $50 weekday - which is basically where Cyprian Keyes and Stowe Acres have gone. I think at that point, they become less of an "attraction" looking to pull people in from Boston and more of a high-end local semi-private.

[Dess]

I wonder if on-course housing is in Shaker's future? A local commercial real estate investor bought it for 3.4M. If that is what it takes to keep one of the states best tracks open, I'm on board.

Ownership also thinks that with the help of the folks from Butter Brook they can reopen this summer.

[billybaroo]

[quote name='raynorfan1' timestamp='1334341978' post='4715808']
Pinehills Jones
Pinehills Nicklaus
[b]Stowe Acres North
Stowe Acres South[/b]
Cyprian Keyes
Blackston National
Waverly Oaks
Red Tail
Shaker Hills

So where I might have played Shaker Hills 10 times a season, now it's down to one or two.
[/quote]

I stopped playing these courses a few years back, as it seems the rates were out of line with the course conditions and the horrendous pace of play. Have they done something to change that? If not, neither Stow course belongs in the same category as those others listed.


Shaker is a great course, but echo the comments about the staff. A 100% turnover would be a good place to start. Let's hope the owners catch wind of how poor of a reputation the staff has earned from their attitude.

[raynorfan1]

[quote name='billybaroo' timestamp='1339549964' post='5080810']

I stopped playing these courses a few years back, as it seems the rates were out of line with the course conditions and the horrendous pace of play. Have they done something to change that? If not, neither Stow course belongs in the same category as those others listed.

[/quote]

I would put Stowe (North/South) in the same category with Shaker and Blackstone National, a cut below the others on the list. Their rates are also a bit lower than the others.

[DCSerafin]

Played Blackstone recently and it is back to it's great conditions. Greens and tees are in excellent condition and the fairways are all back. The rough is brutal. Another course that needs some love is Blissful Meadows. great staff, great course conditions and a course where you will use every club in the bag. The front 9 has a totally different feel to the back. Give it a chance, I think you'll be impressed. it has hosted a few MGA qualifiers and recently hosted the MGA Publinks. Another course that doesn't get mentioned is Green Hill. Played in the Cosgrove event this past weekend and the conditions are pristine with great greens and some excellent views.

[Shemp]

[quote name='DLiver' timestamp='1333492331' post='4642717']
[quote name='raynorfan1' timestamp='1333487032' post='4642073']
[quote name='Shemp' timestamp='1333479699' post='4641079']
That's a nice course, in an affluent area, with a good clubhouse. Management had to screw it up, the debt service isn't that bad.
[/quote]

I don't think that's the case. Shaker Hills was a local pioneer in the "daily fee country club" market, but that market is suddenly pretty crowded, and that local market probably has an oversupply of quality golf. Just on the "daily fee country club" model, they had to compete with Stowe Acres, Red Tail, Cyprian Keyes, and others. Add to that some good private clubs with low barriers to entry (The International, Charter Oak, etc.) and I think the simple economics was too much supply and not enough demand.

I do wonder if these daily fee country clubs can survive without a built-in membership pool from an associated housing development (ala Pinehills). I have my doubts that the Shaker/Stowe/RT/Cyprians of the world can stand on their own.
[/quote]

I think you are right on the money. There are a lot of quality golf options in the area. It is too bad, because that is a really nice facility.
[/quote]

Well, you're both wrong.

Debt on the property was only $2 million which is less than $13,000/month, and the new owner paid $3.4 million. That says it all. Someone knows how much capital it can support. I'm a banker/former commercial lender, and I know the people who foreclosed on it. Management ran it into the ground, then stripped the clubhouse and kitchen when they abandoned ship.

If the property was carrying the type of debt that Pleasant Valley, The Ridge Club, Sterling or others had then you could blame it on economic conditions, but $2million + is the going price for an 18 hole facility with function space so the market works well with that debt level. Management screwed it up.

[raynorfan1]

[quote name='Shemp' timestamp='1340044481' post='5122392']
Well, you're both wrong.

Debt on the property was only $2 million which is less than $13,000/month, and the new owner paid $3.4 million. That says it all. Someone knows how much capital it can support. I'm a banker/former commercial lender, and I know the people who foreclosed on it. Management ran it into the ground, then stripped the clubhouse and kitchen when they abandoned ship.

If the property was carrying the type of debt that Pleasant Valley, The Ridge Club, Sterling or others had then you could blame it on economic conditions, but $2million + is the going price for an 18 hole facility with function space so the market works well with that debt level. Management screwed it up.
[/quote]

I wasn't arguing that they were swamped by debt, I think they're swamped by high-quality competition. I'm not sure how much of that you can pin on management - definitely some of it. They got (or always were) arrogant and adapt to the other, better options had cropped up in their area. I would say that management did not rise to the challenge, but I'm not sure they "screwed it up" - I think they just kept on keeping on, and that was no longer good enough.

Where I think we disagree is with your assumption that a "good course in an affluent area with a good clubhouse" is enough to survive with $100+ greens fees. There are too many good courses with good clubhouses in what is really the fringe of an affluent area (outside of 495).

[Shemp]

You don't need $100 greens fees to support 13,000/month in debt service. They had a great facility, in a great market. Other courses are doing well under the same conditions. My point is that with their cost structure and product they should have survived. I play out of Blissful Meadows in Uxbridge. Their rounds per year continue to go up. Weekday rates are around $50-60 and weekends are around $60-70 per player including cart. Their debt level is higher than the $2 mill that Shaker owned.

I played golf with the loan officer who was working the account down at Crestwood CC 2 weeks ago. I asked wtf went wrong, he said... management were complete a*******.

Btw, someone up above mentioned how awful the staff was at Shaker, and he would start by cleaning them all out. That's the type of thing that hints at the broader management issue. Someone else came in and paid $3.4 million just to acquire the property, which needs significant investment because of the condition left by the prior owners. He will sink another million in. I don't know who the new owner is, but I'm guessing he will turn it around and make it work.

[raynorfan1]

I think the new owner will turn it around and make it work, but he'll do so by responding to the changes in the market. The act that made Shaker Hills successful 10 years ago didn't work any more. The new owner can bring in a new philosophy, and I'm sure the property can survive in some different incarnation. They have to come to grips with the fact that they're no longer a destination course for central Boston.

I do not believe (and you seem to agree) that they can survive at the $100+ price point with the assets that they have and the competition that they face. As I said above, I think they can successfully recast themselves as a mid-tier local semi-private at $50 - $60 per weekend round and do pretty well.

[Dess]

[quote name='raynorfan1' timestamp='1340109963' post='5127232']
I do not believe (and you seem to agree) that they can survive at the $100+ price point with the assets that they have and the competition that they face. As I said above, I think they can successfully recast themselves as a mid-tier local semi-private at $50 - $60 per weekend round and do pretty well.
[/quote]

That would put them $18 - $28 cheaper than Butter Brook (who is doing great)? That seems like way to discounted a rate to me. Perhaps $65-75 would be a nice sweetspot and still cheaper than BB (a nice track, but not as good as SH).

[eacsgolferdad]

Has anyone heard if Shaker Hills will reopen this year? Things have been very quiet since the auction took place.

[Dess]

While the front gate has been locked all spring/summer the back road (maintenance, deliveries, etc.) seems to be well traveled. No doubt they're working on getting the course, clubhouse, & staff up and running. Lets hope it is soon

[Pritam]

Can someone PM me with details on Charter Oak? I looked into them a few years back and heard they were in financial difficulty so I didn't join. Has that changed? Have they reduced their dues?

I'm in Sudbury and looking for a place to play frequently. Right now I'm stuck in a Sandy Burr and Wayland GC weekly routine with the occasional trip to Red Tail.

[OrangeCrush]

[quote name='Pritam' timestamp='1342140613' post='5265412']
Can someone PM me with details on Charter Oak? I looked into them a few years back and heard they were in financial difficulty so I didn't join. Has that changed? Have they reduced their dues?

I'm in Sudbury and looking for a place to play frequently. Right now I'm stuck in a Sandy Burr and Wayland GC weekly routine with the occasional trip to Red Tail.
[/quote]

Have you ever played that course? I did 5 yrs ago for a charity event and I thought it was one of the worst designed courses I ever played. They have awful drainage issues and TONS of mosquitos! But they have maybe the nicest clubhouse I ever been in. Looks like a Georgian mansion.

What about Framingham CC or Marlborough CC, I was told FCC is really nice.

[BrianL99]

[quote name='Shemp' timestamp='1340102350' post='5126892']
You don't need $100 greens fees to support 13,000/month in debt service. They had a great facility, in a great market. Other courses are doing well under the same conditions. My point is that with their cost structure and product they should have survived. I play out of Blissful Meadows in Uxbridge. Their rounds per year continue to go up. Weekday rates are around $50-60 and weekends are around $60-70 per player including cart. Their debt level is higher than the $2 mill that Shaker owned.

I played golf with the loan officer who was working the account down at Crestwood CC 2 weeks ago. I asked wtf went wrong, he said... management were complete a*******.

Btw, someone up above mentioned how awful the staff was at Shaker, and he would start by cleaning them all out. That's the type of thing that hints at the broader management issue. Someone else came in and paid $3.4 million just to acquire the property, which needs significant investment because of the condition left by the prior owners. He will sink another million in. I don't know who the new owner is, but I'm guessing he will turn it around and make it work.
[/quote]


I was the 2nd high bidder on Shaker Hills (& on Sterling C.C.). The outstanding 1st position on SH was $1.9M. There was a 3rd position for about a $1M, that had a story behind it. One of the former owner's estate also had an outstanding position.

In my opinion, the course failed for one and only one reason, horrible management and internal squabbling among the owners.

The deal with SH, went something like this.

I originally looked at the land to build a course, well before the previous owner's bought it. I laughed & said a golf course couldn't be built on the site ... which in some ways, turned out to be true ... they went broke building it. The Architect (Brian Silva), the "builder" (Dexter Loring) and a couple of minor players, all ended up being "part owners". Ownership attempted to buy out some of the minority partners as time went on. When they tried to convert the Golf Course into a housing development, they spent a small fortune (which created the 3rd position, to one of the owner's, who was an attorney. When there was a "margin call" for cash, the original developer/owner was essentially forced out.

The new owner was a cash buyer and by my estimate, the course/clubhouse needs $1,000,000 to get it ready to go. I'm privy to the operating statement for the last 5 years and I can assure, the club cannot handle any signifiant debt service, based on reported revenue from 2011. If there was any way to re-establish the revenue stream they had back in 2008/2009, the club could sustain itself, but I personally don't see that happening.

I was shocked at what it sold for. I was sure I was the owner at $2.750,000. The Auctioneer was at "going twice", before Curtis jumped in. I ran him to $3.375 and I figured that was $500,000 more than it was worth.

If you know of any real 18 hole courses in the area that can be bought for $2,000,000, call me ... I'm in.

I was at $4.275M for Sterling ... that one's a big loser at those kind of #'s. Although again, if they could possible get back to their revenue #'s of 2007/2008, it could work. Interestingly, the Pro Staff from Wedgewood Pines went to Sterling and the staff from Harvard, went to Wedgewood.

There is really only (1) kind of viable buyer for an 18 hole golf course these days ... someone with a lot of cash, that sees the intrinsic value of the land, as a reasonably safe long-term investment. Perfect example was the sale of Pleasant Valley. There's not much opportunity for operational profits in the golf business these days, although the guys behind Hopkinton & Black Rock have been doing fairly well in an un-saturated market.

[BrianL99]

[quote name='OrangeCrush' timestamp='1342150135' post='5266324']
[quote name='Pritam' timestamp='1342140613' post='5265412']
Can someone PM me with details on Charter Oak? I looked into them a few years back and heard they were in financial difficulty so I didn't join. Has that changed? Have they reduced their dues?

I'm in Sudbury and looking for a place to play frequently. Right now I'm stuck in a Sandy Burr and Wayland GC weekly routine with the occasional trip to Red Tail.
[/quote]

Have you ever played that course? I did 5 yrs ago for a charity event and I thought it was one of the worst designed courses I ever played. They have awful drainage issues and TONS of mosquitos! But they have maybe the nicest clubhouse I ever been in. Looks like a Georgian mansion.

What about Framingham CC or Marlborough CC, I was told FCC is really nice.
[/quote]

Framingham is average, Mike.

Marlboro is in my opinion, a 3rd or 4th Tier golf course.

You're right about Charter Oak. Even the members dislike the golf course. Some friends of mine helped financed it and they won't even play there and it's free for them.

[BrianL99]

[quote name='raynorfan1' timestamp='1340109963' post='5127232']
I think the new owner will turn it around and make it work, but he'll do so by responding to the changes in the market. The act that made Shaker Hills successful 10 years ago didn't work any more. The new owner can bring in a new philosophy, and I'm sure the property can survive in some different incarnation. They have to come to grips with the fact that they're no longer a destination course for central Boston.

I do not believe (and you seem to agree) that they can survive at the $100+ price point with the assets that they have and the competition that they face. As I said above, I think they can successfully recast themselves as a mid-tier local semi-private at $50 - $60 per weekend round and do pretty well.
[/quote]

IMO, you're right that the new owner has to deal with the changes in the market place and change the marketing/operating dynamic at Shaker. That said, the #'s simply don't work at $50-$60/weekend round ... no how, no way. Here's the reality of the situation, in simply #'s.

They did 19,000 rounds in 2011 & capable of doing a max of 25,000. At $60/Weekends + $50 during the week ... factoring 9 hole rates, discounts, leagues, afternoon rates, etc., their Greens Fee blended rate is about $40/round. Multiplied times 25,000, their revenue at maximum play = $1,000,000.

Assuming they could do another 50% in revenue, with food, beverage, etc., the revenue is $1,500,000 (at maximum utilization w/o functions).

It costs (+/-):

$650,000 to keep the grass in place.
$300,000 to run the Pro Shop
$100,000 in taxes
$250,000 in payroll, outside of "grass" & "pro shop".
$150,000 in utilities
$ 50,000 in insurance
$ 50,000 in advertising

Your money is all gone before you have even paid $1 for debt service.

[raynorfan1]

[quote name='BrianL99' timestamp='1342177615' post='5267224']
IMO, you're right that the new owner has to deal with the changes in the market place and change the marketing/operating dynamic at Shaker. That said, the #'s simply don't work at $50-$60/weekend round ... no how, no way. Here's the reality of the situation, in simply #'s.
[/quote]

The numbers don't work if they try to maintain the same quality standard they have established at a much lower price point. I don't believe their quality / price point value prop is a fit in that market right now. To be successful at the $50-$60 price point, they're going to have to look a lot more like Sandy Burr and a lot less like Pinehills.

[Shemp]

I think the course (if it's in good shape) warrants fees similar to Blackstone, which would be $95pp including cart Friday through Sunday. That's $20 less than Red Tail.

[eacsgolferdad]

[quote name='Shemp' timestamp='1342615343' post='5298540']
I think the course (if it's in good shape) warrants fees similar to Blackstone, which would be $95pp including cart Friday through Sunday. That's $20 less than Red Tail.
[/quote]
I'm a big Shaker Hills fan and have played it since it first opened. Even at it's best condition, I wouldn't pay $95 to play it on a weekend. I used to cringe paying $85 for weekend play there on occassion a few years ago. At $95, there will be plenty of openings on the tee sheet. I have only played Blackstone once. Although I enjoyed it, I would never pay $95 to play it.

Also, Red Tail isn't charging $115 anymore for weekend play. They dropped there rates last year to $85 for weekdays and $99 for weekends.

[Dess]

The appropriate comparison here, imho, is Butter Brook. It gets a healthy level of play and charges $78 on weekends. Match that rate and Shaker will be a must play.