Traverse City Record-Eagle

August 29, 2009

Rough and tumble golf business

by bill o'brien

BEULAH -- Justin Keillor remembers well the care-free days he spent roaming his family's Crystal Lake Golf Club in the heart of Benzie County.

Keillor spent many of his summer days as a youth around golf courses with his father, Bruce, whose family purchased the course just off U.S. 31 near Beulah in the late 1980s. His dad was a golf professional there and at other courses in the Midwest, and in his early days young Justin would "hang out" at dad's workplace, honing his game or wandering the property as an adventuresome boy might do.

"I was just fascinated with the game," Keillor said. "He would take me to work and I would bum around all day -- I loved it there."

Life has changed a lot for Keillor since those days -- but in other ways, not much at all. He still spends most of his time at the golf course, and lives with his family at a home along the course where he grew up.

But the days aren't as care-free anymore. As general manager and club president of his family's course, Keillor constantly searches for ways to sustain and grow a business that's been turned upside down in northern Michigan. An exploding number of public courses around the region combined with a flat and aging golfing population is putting a financial squeeze on northern Michigan's golf industry.

Several courses closed in recent years, including this year's shut down of High Pointe golf course in Acme, one of the early gems of world-renowned golf course architect Tom Doak, of Traverse City. Another course, King's Challenge in Leelanau County designed by golf legend Arnold Palmer, hung by a financial thread before Homestead resort owner Robert Kuras led a local group to re-open the track.

"The golf business in northern Michigan is not well right now," Keillor said.

Few golfers in northern Michigan have followed the evolution of the sport in the region like Larry Clark, of Traverse City. The owner of a local septic pumping business, Clark's true passion is golf. He plays or practices most every day, and is a familiar face at numerous courses in the area.

"It's a great sport," Clark says. "It's been a big part of my life."

Clark, 67, started playing golf around 1950 at a par 3 course on the east side of Traverse City near the site of the old Osteopathic Hospital along Munson Avenue. The green fees? Twenty-five cents. In those days, although several communities had private country clubs where members could play, there were few options for the general public. And even those courses didn't attract a lot of play.

"I don't remember as many people on the golf course when I was young," Clark said.

In the 1960s, locally the sport started to expand. Elmbrook Golf Course opened in 1964 along Hammond Road in East Bay Township, followed by Interlochen a year later. The communities of Acme and Elk Rapids had 9-hole courses open to the public, and Clark played them all.

The 1970s were relatively quiet in terms of new courses in the Grand Traverse area, as the still growing public courses took on more players. But within a few years, upscale golf would arrive in the region. Acme's public course became one of the early building blocks of the Grand Traverse Resort & Spa. In the summer of 1985, the resort opened The Bear created by Hall of Fame golfer and designer Jack Nicklaus. The layout quickly became a measuring stick for championship golf courses in northern Michigan.

The challenging course was swamped with golfers in its early years, and it hosted a nationally televised Senior Tour event in 1990. Michigan golf writer and historian Art McCafferty wrote that The Bear was likely more responsible for the proliferation of golf courses in Michigan than any other course in the state.

The popularity of golf in the region continued to grow -- and so did the number of public courses. The '80s saw the birth of several new layouts including Mitchell Creek in Traverse City, the Dunes Golf Club outside of Empire, former PGA professional Chick Harbert's A-Ga-Ming course north of Elk Rapids and Doak's High Pointe course. Treetops, the well-known golf mecca in Gaylord, was also under development.

The growth continued to accelerate, and spread throughout Michigan. New local courses included Matheson Greens and Veronica Valley, both in Leelanau County. Crystal Mountain and Shanty Creek resorts expanded their golf facilities, while new courses opened around Manistee and Traverse City. Palmer's King's Challenge at Sugar Loaf Resort and The Leelanau Club owned by the Bahle family of Suttons Bay were developed.

For golfers like Clark, who recalls when there were a handful of places to play, the rampant growth presented an almost unlimited number of options.

"Everybody that built a course thought they could make it work," he said.

The explosion in golf course construction put Michigan among the leaders in the U.S. The state boasts more than 1,000 public and private courses and trails only Florida and California in the number of courses, according to McCafferty's newsletter Michigan Golf News.

But it was growth that couldn't sustain. As a record number of new courses opened in Michigan, the state's economy started on a dramatic tailspin. The manufacturing industry, where legions of workers spent their free time playing golf, was hit especially hard.

The soft economy has left people with less disposable income, so that means fewer recreational activities like golf. The economic downturn also cuts into the number of corporate outings by businesses, another key revenue source for courses.

The local golf industry was still on the upswing when the Keillor family bought Crystal Lake Golf Club. The course dates to around 1970, its early design by noted Michigan golf architect Bruce Matthews. The Keillors were the third owners, financing the purchase in part through Justin's grandfather Art's success in the oil business.

Business was good. The course had recently expanded to 18 holes, and the operation enjoyed an overflow of golfers from nearby Crystal Mountain Resort who had few other golfing options nearby.

Then?

"The whole northern Michigan golf scene blew up," Keillor said.

The swift and seismic shift in the state's golf industry helped shutter more than three dozen courses around the state, including several in northern Michigan. New course construction slowed to a trickle. In some cases, courses shut down because owners couldn't find buyers or weren't interested in working the long hours of the business anymore.

But for many, it was a perfect economic storm created by a glut of new courses against a flat golfing population doused by a poor economy that sealed their fate.

That's the reality facing the golf courses that survive, but there are no illusions of grandeur anymore. These days, course owners like Keillor are keenly aware of the challenges that face their industry. He wears many hats at his club these days, taking charge of marketing and promotional duties while also keeping tabs on the clubhouse, restaurant and grounds.

He also recently re-designed a handful of holes on the course's back nine. As a student of the game and an exceptional player, he enjoys working in course design. He implemented more than $250,000 in course upgrades including reconstructing its sand bunkers, adding yardage and building a striking new waste area that shapes the 14th hole.

The greens at the course are immaculate, as Keillor knows that playing conditions need to keep up with the higher-end courses he's competing against.

"In tough times, we're spending more," he said.

Keillor's also come up with various promotional ideas including dinner specials, couples nights and expanded league offerings to fit people's busy schedules.

Green fees dip to as low as $1 a hole on some days, and he wants locals and visitors alike to feel like they're an integral part of the business.

"It's a family here...it's a wonderful relationship, and I want people to experience that," Keillor said.

The hard work seems to be paying off. Keillor said his early season play this season is up 20 percent, and response to the renovations and promotions is strong.

But it won't be a quick turnaround. Keillor compares the golf scene to the housing industry, where it's a down market now compared to the boom times of the '80s and '90s. Most observers expect housing will eventually rebound, and Keillor believes that golf will as well.

"It's going to be a journey...everything is cyclical in this business," Keillor said. "You've got to be constantly re-inventing yourself."