Originally published on Law 360 | Written by Grace Dixion
The nation's supply of golf courses has taken a hit since the turn of the century, narrowing 11% between 2006 and 2021, according to the National Golf Foundation, which projects that a further 95 courses will close in 2022 and is not the market's "natural bottom."
But as the several-hundred-acre tracts of land come up for grabs, developers who envision affordable housing, mixed-use development, industrial space or a nature preserve in their stead are finding themselves face to face with litigious neighbors that they must either learn to appease or fend off in court.
Neighbors hampered a developer's efforts to redevelop the long-defunct Calusa Country Club by challenging Miami-Dade County's requisite rezoning for a residential complex, though the county beat back the challenge in June. In Wilmington, North Carolina, a developer's plans to convert the Masonboro Golf Club to housing have drawn local challenges that are still playing out in trial court. And in Minneapolis, a plan to halve the historic Hiawatha Golf Course and restore wetlands passed in September, but only after a yearslong battle.
"We built way too many golf courses — between 1985 and 2006, the percentage of golf courses increased by 40%," said Reid Wilson, chairman of the Houston-based real estate firm Wilson Cribbs & Goren PC. "So you have all this land, it's usually well-located, and there's going to be continued pressure from the development community to buy this property and redevelop it."
A. Kimberly Hoffman, chair of Morris James LLP's land use and zoning practice, told Law360 that the golf courses popping up for sale present an opportunity to remedy a housing deficit that Freddie Mac estimates most recently at 3.8 million homes and to assist the 30% of households that are spending more than 30% of their income on rent, according to Harvard's Joint Center for Housing Studies.
"You have a big social need in almost every jurisdiction for affordable housing, and it's getting to be a very acute problem in some places," Hoffman said. "Some of the places that have probably the most acute [need] are the places that have a lot of golf courses because you have wealthy people who have a lot of expensive housing and people have been priced out of those markets."
The Promise
In Collier County, Florida, the local government, in conjunction with the Collier Community Foundation and several other nonprofits, was able to seize on a redevelopment opportunity when the defunct 167- acre Golden Gate Golf Course came up for sale. The county purchased the property in 2019 and approved the construction of a 350-unit complex on 25 acres of it, funded by the Community Foundation and others, per the foundation.
Collier Community Foundation CEO Eileen Connolly-Keesler told Law360 that 250 units will be designated for essential workers, including police, teachers and nurses.
"Because so many of our service people live outside Collier County, it takes them an hour or two to get to work every day," Connolly-Keesler said. "And then we also are adding in 100 units for veterans and seniors because we have a lot of veterans living in the woods, we have seniors living in cars."
And though the rezoning and permitting process added 2½ years to the redevelopment, Connolly-Keesler said the foundation expects that developer Rural Neighborhoods will be able to break ground in the first quarter of 2023.
But though the Collier County development embodies attorney Hoffman's hope to see golf courses transformed into mixed-use, low-density residential development with substantial open space, she said that hope has turned out to be a "pipe dream" in most cases, as so-called NIMBYs have launched attacks on such attempts across the board.
"What I see is that the surrounding community tends to regard these courses as a community amenity that they control and that they don't want to see change, even when the business model for that particular golf course has really failed," Hoffman said.
The Peril
Neighbors resistant to any changes to nearby golf courses have a playbook of challenges at their fingertips to stymie attempts to convert public and private courses to varying degrees of success, attorneys said.
Challenges based on restrictive covenants, for example, have been used by private landowners to restrict the future use of land. Such covenants can be explicitly written into deeds or be implied, as was the case when the bankrupt operator of the Heatherwood Golf Course sought a green light to sell the Shelby County, Alabama, property amid Chapter 11 proceedings.
Though the deed governing the property did not expressly limit how the operator might use the land, the Eleventh Circuit affirmed in 2014 that homeowners were convinced to buy land in the abutting subdivision because of the course and the belief that the subdivision would remain a golf course community. The circuit panel in Heatherwood Holdings LLC v. HGC Inc. pointed to the fact that plat maps, street names, deeds and marketing materials all reference the golf course.
"Without there being any legally enforceable written document, the court said, 'Well, if it looks like a duck, it has feathers and quacks and has webbed feet, then we're going to call it a duck," said Wilson of Wilson Cribbs.
Art Anderson, a shareholder at Winstead PC, told Law360 that in other instances, plat approvals — the process of mapping out how a piece of land will be divided and where infrastructure will be built — can also become a sticking point. This was the case, he said, with a developer he represented nearly a decade ago in its efforts to repurpose a course in Grand Prairie, Texas, for industrial warehouse space.
When officials ignored and later denied a plat application for the proposed redevelopment of the Great Southwest Golf Club, Anderson filed suit on behalf of the developer.
But platting is a largely ministerial duty in which cities have much less discretion, Anderson noted, with the exception of a unique Texas platting statute that creates additional hurdles for developers looking to replat subdivision golf courses. And in 2016, a Tarrant County judge ruled in Ch Realty VII-Ascendant I
Dallas 360 Global Logistics Park LP v. The City of Grand Prairie, Texas et al. that the Texas statute did not apply to the developer.
Anderson added that the Grand Prairie developer was at an advantage because the underlying land was zoned for industrial use already, characterizing zoning battles as the largest hurdle for developers.
"That is one huge barrier to entry because zoning is typically legislative and discretionary," Anderson said. "Most cities and neighbors like open space, they like not having activity out there, … so that's the main barrier to entry."
Four industrial warehouses have since been built on the site of the former Grand Prairie course.
Roll of the Dice
In the case of Collier County in Florida, though rezoning the land to allow for multifamily residential use added considerably to the project's timeline, Connolly-Keesler told Law360 that the pushback was muted for several reasons.
"I think because these units are set aside for police and teachers and firefighters, I don't think there was the biggest concern coming from the neighbors," Connolly-Keesler said, adding that the county's agreement to retain part of the land as a golf course aided the process as well.
While the prospect of a nearby golf course shifting to residential or industrial use can often incur vitriolic community resistance, attorneys pointed out that attempts to repurpose courses into conservation easements and nature preserves are the most readily received.
So when the Grand Traverse Regional Land Conservancy in Michigan purchased the Mitchell Creek Golf Course in 2019, the group received little, if any, opposition from the surrounding community, according to the conservancy's Executive Director Glen Chown.
When the land came up for sale, a township supervisor tipped off the conservancy, afraid that developers who sought to turn the land into housing or a racetrack might further impair the 220-acre tract of the Mitchell Creek watershed, Chown said.
With funding from two longtime supporters, the conservancy was able to purchase the land, where, in addition to conservation measures, it plans to build trail systems for nearby students walking to school and its own permanent headquarters. The preserve will protect water quality in a watershed that feeds directly into municipal drinking water, Chown added.
"It's an oasis in an area where hundreds and hundreds, if not thousands, of new homes are coming online, … and we are receiving a tremendous amount of public support for this," Chown said. "We haven't really had any opposition, the township's been very supportive, they recognize how valuable this property is."
Looking ahead, attorney Wilson noted that developers can and should take lessons from past disputes over attempts to repurpose golf course land.
"Knowledgeable developers are putting waivers in the record, so when you go to buy a house in a golf course lot, … it says that the golf course might not be there forever," Wilson said.
And according to Hoffman of Morris James, local governments can also take steps to amend their landuse policies and zoning codes that would enable such projects.
"In a lot of jurisdictions, a project that you can designate a 'redevelopment' gets a lot of favorable treatment in the approval process, so there's been a lot of controversy in some jurisdictions that do that as to whether a golf course redevelopment qualifies or not," Hoffman said.
Subjecting efforts to repurpose golf courses to an administrative review process rather than quasijudicial authorities and public input might encourage developers, she added.
"When it's an administrative review, then it's a lot easier to come up with a plan that complies with the code, the administrative reviewer looks at it to make sure it's compliant and then you're really entitled to your approval," Hoffman said. "And opportunities for appealing that kind of approval are a lot more
limited."
Republished with permission from Law360.
--Additional reporting by Chuck Slothower. Editing by Steven Edelstone.
All Content © 2003-2022, Portfolio Media, Inc.
