Lakewood Country Club Thinks $7.4 Million is Way Too Much For its 120 Acres, Sues DCAD

LWCC is valued by DCAD at $6,096,200 and they pay $165,000 a year in property taxes.  Based upon 118 acres, that equates to $51,600 per acre on valuation.  As a golf course, it's not worth that much.  And in this recessionary environment, the raw land is not worth that much either.

It is my understanding that they've had to cut their membership dues by 50% since 2008 and it is heavily in debt.  This is "par for the course" for most membership-only private clubs in America, due to the recession and the building boom in golf courses over the past ten years (300 new courses a year on average).  Google it.  The graying of the Yuppies was anticipated to push the geriatric from the ski slopes to the fairways, so they built a gazillion of these things.  But it didn't happen.  Now, golf courses are in the red, or worse abandoned by vacating the plat to get out from under horrific taxation.  People, these are the facts of the situation.  The reality in America.  

The City of Crandall got all hopped up about public courses so they bought the 18-hole private club in their fair city for $4,000,000, thinking it would be a cash cow since they didn't have to pay those pesky property taxes.  Why, they could cut their green fees in half and gut the competition who DID have to pay massive property taxes.  And they did. (kinda like our public golf courses).

But, alas, as we all know, friggin' socialists can screw up a wet dream and in five years, their commie course was draining the taxpayer by $300,000 a year - beacuse it stayed deeply in the red.  You see, if you know anything about golf courses it's this - they are hugely expensive to operate.  Maintenance heavy.  Real heavy.

So Crandall sold it back to the private sector.  For $2,000,000.  

And the City (the taxpayers) still owes the bond debt to acquire it.

It's a cautionary tale.  Best leave Lakewood alone.  I suspect it's teetering and you might have another Fair Park on your hands (ha!).

In fact!  Dispatch Schutz and his picnic basket to one of the fairways.  Count the duffers.  That course needs about 40 thousand rounds a year to break even.

The current Market Value, as is (undeveloped with streets, utility infrastructure, and a;; the soft costs to get it permitted through this city . . . is $25,000 per acre.  That is the most any developer could pay and then dump MILLIONS in development costs, then take 5 to 10 years to absorb (sell-out) the finished lots.

As an operating golf course, it's a money loser.

See, unlike the 9 municipal golf courses we own, they have to pay MASSIVE property and sales taxes . . . which must be built into the green fees on top of the extraordinary costs to maintain a golf course nice enough to attract golfers.  Private courses can't compete with city course green fees, as a result.

city courses don't have to operate in the black (and don't say that they are, because we are bieng lied to).  For instance, these huge upgrades our fairways and greens have gone through come from other city coffers.  

Wanna see some Justice?  Make the city-owned golf courses pay their "fiar share" of property taxes and demand they both operate in the black and borrow their own money (the only redress a lender has is to foeclose on the course if they aren't paid back).

Then watch you Leftists scream bloody murder.

 @holmantx At least we Leftists only scream bloody murder.  Right-wing extremists are out there committing bloody murder.

 @holmantx they're city parks.  You get dumber and dumber the more you talk about land development.

 @REDude Is it deed restricted or locked in by zoning?  I just looked it up.  It's PD 517 - private membership country club only.  But there may be deed restrictions too.

In any case, DCAD can't hang a big value on it based upon a use not presently allowed by zoning (not a legal use).

 @JohnNeelyBryan Lookie here commie, it's on the books at $6 mil.  I'm saying as a golf course it is not even worth that.  

And as far as the taxpayer subsidizing it, let me enlighten you.  The City of Dallas owns nine - count 'em NINE golf courses.  They operate them for profit.  They don't pay A LICK in property taxes - a course's biggest line item expense.  So they cut the green fees in half and suck off all the private courses that DO pay huge property taxes, such as LWCC ($165,000 a year).  So who's subsidizing who?  And let's assume each public course has 20,000 rounds of gold played a year.  There is only so many rounds of golf to be played by Dallasites.  These courses not only DO NOT  pay taxes, they gouge out 270,000 rounds from those that do.

Even churches have to pay taxes on for-profit enterprises they own.  

so you don't know what you are talking about.

 @WylieH  @holmantx $10/SF if the city would allow 24 units per acre (apartments or condos).  Single-family, detached would yield no more than 3.5 lots per acre, after subdivision development.  Then it would take years to sell it out.  And interest carrying costs would eat it alive.

So yeah, if the City would allow multi-family of a density greater than 21 units per acre, you could make some money.

But anything that would require a Jumbo loan ($417,000 or more) would be a slooowwwww sell out.

And it's zoned PD 517, restricted to: "(a) For a country club with private membership use".

It's surrounded by R-7.5 (7500 SF min lot size).  The neighbors would go nuts if you tried for a variance to get multi-family.  

And private membership only country clubs are huge money losers.  So all they gotta prove is that Lakewood CC ain't worth nuthin'.  And that I bet would not be hard at all.

And it can't be appraised under a use not presently allowed.

 @holmantx here you're on firmer footing.  But, you vastly undervalue the lot value.  The M-Streets are selling tear downs for $350k+. 

 @holmantx you're an idiot.  My Lake Highlands lot is worth $160k.  All around there are old houses being scraped for $4-500k houses.  This trend barely slowed during the recession.  Lakewood homes would sell for closer to a $million.  

 @holmantx all the city course owe is sales tax, that is a pass through cost.  Cities don't pay property taxes for parks. 

Lakewood CAN afford to pay more in ad valorem taxes than they do.  I'm not arguing that they should be taxed as residential or conventional commercial property, but that valuation is silly.   I would also be willing to bet that their tax rate is lower than res or comm property.  Again, golf courses do add a park-like benefit to the city, preserve green space, help with flood water.  I would suggest that my valuation of 16m is half the value of the property, still a conservative estimate.  Or, they could do what other golf courses do and move to more remote areas, where land value is indeed lower.  That's part of why the course that was the DAC moved from Glen Lakes today to Mesquite.   

 @scottindallas That country club cannot pay the kind of taxes you envision no more than the nine golf courses can pay the taxes they should pay, which the city owns and operates for profit.

 @holmantx I think you make a fair argument about the perils of over-building.  And, I agree that golf courses add to "neighborhood value," and it's unfair to value all that land the same as much/some of it is floodplain.  But, that also means that that parcel will always have some park-like character to it (even in the hypothetical development of the parcel)  So, perhaps a developer would be better served creating one acre lots, yielding say 80 lots.  If infrastructure cost 100k/lot (a generous estimate)  that would still leave a lot value of $200k (a very modest valuation)  yielding a value of twice what the country club is valued at, and leaving fully 40 acres undeveloped. 

 @scottindallas So, if 120 acres could reasonably yield 3 lots per acre, and DCAD valued these mythical lots at $100k per lot, then the LWCC should pay about 2.75% of that value each year?  Sure you want to do that to your neighborhood country club?  You'll lose it immediately.  That's $10 million a year just in property taxes.  And member-only country clubs are in the tank across America.  

Based upon your goofy logis, you could fill in White Rock Lake and GEE! look at all the lots you could sell!?!

but does White Rock and the LWCC add value to your lot?  Would your lot value suffer if they weren't there?

And who pays the interest carry and taxes on the years it would take to sell out that many lots?  You?

Those two items are the NUMBER ONE KILLER of subdivision developments.  But of course, you only care about your dipshit lot and how it affects you.