05/21/2006

Special to the Record-Eagle/Kevin Johnston
The Chestnut Valley Golf Course clubhouse north of Harbor Springs is one of several area golf clubs struggling in our market.

In saturated market, local clubs struggle

A sure bet a few years ago, some face foreclosure

BY CRAIG McCOOL

mccoolrecordeagle@sbcglobal.net

Special to the Record-Eagle/Kevin Johnston
The main entry to the True North golf course on Stutzmanville Road north of Harbor Springs.

HARBOR SPRINGS — Grand Rapids developer Jeff Brown thought he had a sure thing a few years ago when he planned True North Golf Club.

Other private clubs in the area had waiting lists, and consultants assured Brown the region would support another high-end, residential community built around a golf course.

Today, as True North enters its third season, there's but one finished home among the course's more than 70 building sites. Brown and his partner face a $1.2 million foreclosure lawsuit.

Consultants "sold us on the fact that there was a market for an upscale club," Brown said. "I don't know that the numbers were as viable as they were portrayed to be."

The owners of a second Harbor Springs golf club, Chestnut Valley, face a similar foreclosure suit. The cases could be a sign of tough times ahead for the golf industry in northern Michigan, as saturated market meets stagnant economy.

In Emmet County alone, no fewer than eight new courses — 144 holes of golf — opened since 1990. But the number of golfers hasn't spiked proportionally.

Ten years ago, regional golf courses expected to do 20,000 rounds of golf each year, said Mike Chumbler, head of golf operations at the Boyne Highlands resort.

"From the late 1990s to 2000, things were booming," Chumbler said. "Today, I would say people are looking in that 14,000 to 16,000 range. It's been harder to be profitable in the last four or five years."

The market currently won't support any more courses, Chumbler said.

"It'll for sure level off, if not go the other way, where private clubs look to open their doors a little bit," he said. "We've reached the peak."

Harbor Springs attorney Neil Marzella agreed. He represents the owners of Chestnut Valley Golf Club, who face a $1.1 million foreclosure suit filed last month in Emmet Circuit Court. Chestnut Valley opened in the mid-1990s.

"Northern Michigan is saturated with golf courses," Marzella said. "I think there's a long-term problem. The Michigan economy is bad, gas prices are up, and you're spreading this low number of golfers over a lot of courses."

Both True North and Chestnut Valley are open for the season. Brown is no longer a part-owner of True North, and is involved in an ongoing legal dispute with the course's current owners over a recent buyout.

The lawsuit against him, which he says is close to settlement, involves eight building lots in the development that he and his business partner still own.

"Lots in that development are headed in the other (downward) direction," Brown said of the property values at True North. "Fifth Third bank and us have come to that realization."

Marzella said he's "optimistic" that Chestnut Valley would find new financiers, but said: "Right now to get a loan for a northern Michigan golf course is a difficult thing."