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Real estate market tightens squeeze on golf industry

Industry has mixed feelings about the redevelopment of courses into housing
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Golf courses seem to always be in play when it comes to Lower Mainland land-use debates.

Earlier this year, Surrey’s city council approved the development of 325 homes on part of Eagle Quest Golf’s Coyote Creek course. In March, Vancouver Mayor Gregor Robertson proposed turning one of the city’s municipally owned golf courses into a park. The suggestion comes after wildlife and biodiversity concerns were raised over a 2012 proposal to turn the course into housing.

“Golf courses and all kinds of other lands that are currently empty should be developed,” said Andrey Pavlov, professor of finance at Simon Fraser University’s Beedie School of Business. “The question is, is this the most effective way to increase supply?

“I wouldn’t think golf courses are the first place to go, but if that’s what somebody wants to do, it’s better than not doing anything.”

Golf industry leaders have mixed feelings about repurposing golf courses. If a course is struggling and there’s an opportunity to find financial relief by redeveloping it, that just makes good financial sense, said Kris Jonasson, executive director of British Columbia Golf.

Jonasson said he isn’t worried about the effect that converting some courses to residential development might have on the broader golf industry. He noted that rising investment in facilities by the golf community is a sign of the industry’s health.

However, Jonasson has concerns about the potential loss of municipal courses. While B.C. has plenty of high-end luxury and championship courses, entry-level public courses are scarcer. Redeveloping public courses like Langara Golf Course would tilt the balance even further toward limited-access private courses. Jonasson said that would threaten the sport’s long-term viability.

“You need to have the entry-level facilities in order to generate play at all of the facilities,” said Jonasson. “We get people in at an entry level, they develop a love for the game and then they’ll find the appropriate venue that they want to consume the product at.”

The industry is concerned that without entry-level courses, attracting new entrants to the sport in B.C. would be much harder.

Many in the industry, however, are quick to point out that golf courses and housing aren’t mutually exclusive.

The city-approved housing development at Coyote Creek, for instance, sits on only the portion of the golf course that is outside the Agricultural Land Reserve, leaving the remainder of the course intact.

Jonasson said the choice to redevelop B.C. golf courses is also not a zero-sum game; the total benefit can be greater than the sum of the parts because redevelopment can help improve golf courses.

He noted that Coyote Creek plans to use the proceeds from its redevelopment to improve its golf course.

The Kamloops-based Tobiano Golf Course has been cited as another prime example of how housing and golf courses can provide symbiotic benefits.

The course was originally designed to be the cornerstone of a future community development. Tobiano provides both a customer base for the course and increased value for homeowners.

Ultimately, industry participants agree that the decision to redevelop a golf course should be left to supply and demand.

If a course can improve its financial position by redeveloping either part or all of its lands, then it makes sense to do so.

Tobiano’s general manager, Terry Smith, said redevelopment could offer both short- and long-term benefits to the industry.

In the short term, golf course closures could help neighbouring courses boost their attendance. In the long term, Smith said, courses with limited economic viability will continue to be redeveloped into housing, and new courses will be built on more affordable land.

“It’s been a learning experience from building too many, too fast,” Smith said. “We’re going to have some [golf courses] that struggle, that’s inevitable, and eventually I do think there are going to be areas where a well-built golf course in the right spot will be built.” •