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Golf Course Redevelopment: What You Need to Know

Builder Magazine

June 20, 2018

As buildable land becomes increasingly scarce, many single-family developers are looking at current and former golf courses as prime sites for redevelopment. What makes golf courses so appealing in this regard? 
There’s been an uptick in interest in golf-course real estate over the past few years, particularly in South Florida, where golf sites are prevalent, but also in other areas such as New Jersey, North and South Carolina, and Georgia. Developers like these sites because they tend to be the only green land left in desirable, established neighborhoods. At the same time, a lot of courses are struggling financially and in many cases, they can’t afford to maintain the courses. When done properly, it can be a win-win-win for the golf course operator, developer and community since the sites can be redeveloped to suit their needs while fulfilling shortages for single family homes. 

What considerations should a developer keep in mind before acquiring this type of asset? 
Land use restrictions and restrictive covenants are major impediments to development. Neighbors usually object to redevelopment because they bought with the understanding that they would be living next to open green space protected from development. Sometimes this belief is based on agreements that may be enforceable by the homeowners. Even when they have no ability to stop redevelopment directly, they will try to stop it indirectly. For this reason, I recommend that developers engage the community early in the process to better understand their concerns, while also educating them on the inevitability of the golf course’s demise. Often residents are so against development for development’s sake, yet by working with the developer, they can best retain their property values and bring new amenities to enhance quality of life. 

What environmental challenges do golf courses pose, and how might that impact a developer’s project budget and timeline? 
Golf course assessment and cleanup can be complex, time-consuming and expensive. It requires hiring an environmental consultant with specific technical expertise and experience in golf course remediation to avoid wasting time and money on inappropriate investigation and remedial activities. Conducting adequate and timely environmental due diligence is essential because these sites tend to have residual soil and groundwater contamination related to the legal use of agro-chemicals such as fertilizers, pesticides, herbicides and fungicides over a long period of time. 

It also entails ongoing coordination with the relevant regulatory agency to ensure that the agency understands the client's desired endpoint and agrees with the strategy to achieve it, which can often depend on the proposed future land use. Buyers of single-family homes, for example –– especially high-end homes –– may be put off by a property with a soil and/or groundwater restriction where the contamination is only partially cleaned up. 

How do you remediate a golf course for single-family use? 
In a residential scenario, with large green spaces such as backyards or community playgrounds where you expect children to play, you need to make sure that those areas of exposed soil are pristine. It’s all about who is exposed and for how long. Conversely, if you’re building for industrial use, you don’t necessarily need to clean the site to perfection –– you just need to control exposure pathways, which are different for industrial than for residential use. On an industrial site, for example, no one is playing in the backyard. It’s mostly built-out with concrete foundations and paved parking areas, with limited green spaces.

Are there any other infill sites that residential developers might consider similarly, and if so, what are the challenges they pose from an environmental standpoint? 
One reason golf courses are so desirable for single-family homes is because they have so much land. Other types of infill properties typically involve fairly small tracts of land, which is why they are more suited for condo or multifamily redevelopment. Traditional infill sites still present environmental challenges, though, because industrial uses from before current zoning regulations were put in place may lead to underlying conditions that must be addressed. 

For example, some parts of Florida are built on pre-regulatory landfills, which can lead to uneven settling and soil gas issues as the landfilled material decomposes. Gas stations were also not as regulated in the past as they are now, and even if they’re no longer there, builders may discover contamination from historic underground storage tanks. Given that many of these uses are no longer present, you have to go back to historical records to know what prior activities took place on the site. That way you can ensure, prior to acquisition, that you have a comprehensive understanding of the issues that will need to be addressed before development proceeds.

Reprinted with permission from Business Magazine.
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