HOAs and Country Clubs Are They a Good Match?

Somersett UnitedControversies regarding whether or not HOAs should get involved with the purchase, operation or mandatory memberships in community golf courses is nothing new.  Failing golf courses, not originally part of the HOA, are looking towards them for salvation.  Pros and Cons associated with the proposed purchase of the Somersett Country Club have been discussed extensively in previous posts and comments on this website.  However, none have taken an outside look at this issue.  If one wishes to delve further into what others have experienced, SU suggests taking time to click on the following links:

Article:  Economist – The Future of Golf


Article:  “Why Should Others Pay For Golf Players’ Entertainment?”


Court Decision: Ruling in favor of plaintiffs against an HOA invalidating CC&R amendments that required mandatory membership and levy of fees associated with the local, formerly private, country club.


Article: Should Arrow Creek homeowners take risk of owning a golf course


Article:  “Can Your HOA Make Club Membership Mandatory?”


Article:  “Homeowner sues over plan to force Skyline resident to save country club”


Article:  “Plan to save Skyline Country Club relies on non-member homeowners”


11 thoughts on “HOAs and Country Clubs Are They a Good Match?

  1. Very interesting articles and I commend whomever took the time to find and publish the articles.
    One could conclude from the first article that Somersett Golf and Country Club may someday not exist.
    The other articles talk of subsidizing golf courses, etc. To me they were interesting but not on point.
    Our HOA is negotiating to buy land and water rights that would revert to the developer if Somersett Golf and Country Club ceases to exist. The HOA is NOT proposing to subsidize the golf course, they are NOT proposing to own a golf course, they are NOT proposing to run a golf course. They are proposing to buy land and water rights at below market value.
    The HOA is buying the water rights and land so that if the current private golf course does not exist in the future, we the homeowners will decide what to due with the land and water rights. Sell all or part to a developer after we incorporate our CC&R’s, leave it as open green space. Sell the water rights and let the land go brown. Make up whatever scenario you want. IT WILL BE OUR DECISION IN THE FUTURE, NOT SOME DEVELOPER’S.

    If you give credence to the idea that golf and golf courses are declining and you do not believe in this deal, then the only logical conclusion is that the developer will do something that you believe will be better for our community than what we as homeowners could do. I personally and some other 1386 votes agree that if and when the time comes, we will make better choices for our community than a developer.

    1. Mike,

      There is an old saying “The Road to Hell is Paved with Good Intentions”. I believe that placing faith in ones statements as to what they are not proposing, when there is nothing to preclude it, can very well be a misplaced faith!

  2. Below are some web sites and articles the person posting above decided not to include in his “outside look”….

    To Mike’s point above and every other rational argument about why the HOA should purchase the land and water rights from the SGCC, the main reason remains OUR home values at Somersett and the aesthetic beauty of the community due to the golf course’s existence, care and upkeep. Only through the purchase are we as homeowners guaranteed that our community will have full control over decisions associated with the golf course that might affect our community, IF something were to happen in the future to the viability of the SGCC.

    Also, the articles below document what happens to home values when a centerpiece golf course goes bankrupt or brown (not that it’s going to happen here). 20-40% home value drops. Just talk to ex homeowners at D’Andrea and Northgate (right in our backyard).



    STAKEHOLDERS -EVERY HOME OWNER: If you live in a community that has a golf course as its centerpiece, whether you play golf or not, you have a stake in the physical and financial health of the golf course. When you bought your home you knew there was a golf course in the neighborhood and very likely told by the real estate agent that it was a community benefit. It’s open space, beautifully groomed and available for you to use, or not use. It’s a quality of life feature that increases property values. The key is that you knew there was a golf course when you purchased your residence. So, why would a non-golfer refuse to participate in a plan to save the neighborhood golf course if they don’t play golf?


    Proponents on the purchase see the acquisition as a mechanism to preserve the value of their homes, the aesthetic of their community and even as an opportunity for the HOA to experience financial gain.

    1. Wow! Thanks for finding two more articles “In favor” of buying a golf course in today’s financial environment. I only found a few myself. Most of the literature overwhelmingly warns against doing so!

      The first one is a guy who really wants employment as a consultant to help make a go at being successful. The second article really sounds a lot like the discussions currently going on in ArrowCreek – I don’t know if you are having the same discussions in Somersett – and details more of the thinking behind some of the arguments. Well worth the while to read and think about for a few moments…

      When I bought my lot: the golf course was not an item, the courses are not centerpieces nor that visible from the main drag, I totally don’t see them from my house and high desert is high desert is high desert. If you don’t like high desert, you don’t need to be in Reno.

      And – about the home value comment – maybe at first home values in D’Andrea may have been distressed, but now the ‘sold’ average value percentage is quite remarkable. Twenty to 40% drops in value may be for homes right on the course, but the percentage can drop considerably every 100 ft. (“Does Proximity to a Golf Course Matter?” Kwame Owusu-Edusei & Molly Espey, Clemson University, 2003: http://ageconsearch.umn.edu/bitstream/18812/1/wp012203.pdf **) And, once memories fade and high desert takes over, it makes no difference at all. The neighborhood is still a nice place.

      ** From Page 4 of “Does Proximity to a Golf Course Matter?”:

      Asabre and Huffman (1996) studied negative and positive impacts of golf courses to homes and found a negative impact on houses proximate to the gate, but positive for houses having frontage on golf courses in Burlington county, New Jersey. Do and Grudnitski (1995)
      focused on proximity to golf courses and found that the impact on property values did not extend beyond 100 feet. They concluded that houses abutting golf course were 7.6 percent more in value. Hirsh (1994) confirms that, “significant value can be derived from golf course frontage.” Firth (1990) found that golf course frontage may increase residential land value by over $10 per square foot. Other studies have used hedonic pricing models to estimate the effect of different
      open space types on a house’s sales value or assessed value.

      1. Yes, we can all find articles and data on line that can justify one’s position to one extent or another…..

        But, here’s the reality of the situation at Somersett and Arrowcreek….

        Your situation is drastically different than it is at Somersett.
        First, you have NO water rights and as such have to pay huge sums to the water company for water EVERY year…
        Second, your club’s costs are WAY too high for the member/income level to support the club
        Third, you have less than ONE THIRD the home sites at Arrowcreek than at Somersett.
        Fourth, Somersett residents overwhelmingly (almost 4 to 1) voted in favor of the acquisition because it makes sense for the community.
        Fifth, Our H/O dues will not change a nickel versus yours that would need to increase by $100 or more…

        I don’t have time to address all of your posting right now, but I did notice you forgot to include in your thousand page powerpoint presentation (that was the most ridiculous thing I ever saw) the following other amenities that could be added…
        1) a quarter lagging court (I used to love it in the streets in Chicago when I was growing up there)
        2) a full size checker court – Imagine the enjoyment and exercise the little ones would get out of such a sport
        3) A frisbee golf court
        4) And last but not least a twiddly winks stadium for those most nimble children in the community

        Good Luck with your dilemma… Ours has been solved by the majority of the residents here at Somersett that aren’t influenced by a few disgruntled residents……

      2. arrowcreek 411

        I cant believe that a “housing value study” pertaining to golf from the 20th century is still valid!

        Since those studies, we have had the great recession, resale values in Somersett are maybe now (end of 2014) at 75% of the pre-recession values (after 6 years!!)…Looking at D’Andrea their resales are at 90% of their orginal value, and they dont have a golf course! D’Andrea is a terrible comp for most of Somersett (and Arrowcreek) as everything is on a nore modest scale – aimed at working Reno families. Del Webb, catering to an over 55 crowd, mostly from California escaping punitive local taxation represents about 35% of our residences (1000 out of 2600). Somersett as a whole still has 1140 units to be built to complete the PUD.

        My most recent review of resales in Somersett during the summer 2014 showed that there was little difference in comparable expensive ($600K) houses on the old “brown” Northgate (now a city park) and the bright green private Country Club course – Both were now worth about 70% of their pre-great recession cost when new. These 4 houses (2 in each location) are comparable in size and style to those in Arrowcreek.

        Like you, when we bought we were told that we would never have to pay anything towards a private golf course – joining was optional not compulsory. With the purchase of yet another golf course, the world of Somersett will change, the potential liability to each homeowner is enormous. Our Board does not have a plan on what to do if the private club fails (or breaks the lease agreement) – other than our dues could go up $60 a month…need I say more.

        Our HOA Board already operates a 9 hole golf-course – this costs us nearly $400K/year to operate and generates only $65K in revenues (yes it is public) – all 2600 unit owners are subsidizing this operation at around $12/month. Based on this woeful financial performance, it is safe to say that the Board and our Management company (First Residential) know “nothing” about golf courses. Still can’t believe they want to continue to financially jeopardize all unit owners in Somersett by buying into another potentialy losing private golf course. (if it defaults on its lease)

        I always thought HOA’s were established to maintain homeowner value, not invest in “dying businesses”. I guess our Board wants Somersett to be more like Arrowcreek and own two golf courses. They tell us that this is an opportunity for all of us to get control, so the Board can function like a developer, creating a new strategic vision for Somersett, value for all the residents by selling off water rights, land.

        Their priority should be putting the Canyon 9 on a better financial footing – not doubling down by buying more golf..

        1. You JUST don’t get it Geoffrey!!!!

          First, the timing of the study is irrelevant. The fact is that people buy into communities like Somersett whether they are golfers or not because of the beauty of the community, the AMENITIES (golf course included) and the neighbors and neighborhoods they meet and see.

          Resale values HAD to go up from where they went after the recession, whether there was a golf course or not, so D’Andrea and Northgate comparisons make no sense. It’s a documented FACT that home values tanked even FURTHER when the vote passed to not support the country club with a $25/month homeowner subsidy at D’Andrea. Again, I have a real estate friend who had a home in escrow during the vote for about $395k. The buyer backed out the day after the NO vote. The home sold several months later for $345k. What’s hard to understand about that? So what if it has since gone up back to almost pre recession levels. The home started from a basis that was $50k less. At $25/month additional HOA dues it would have taken that seller 166 years to recoup that $50k of home value loss.

          Furthermore, I live on one of the fairways. I guarantee you that my home is worth more because of it and if the golf course were to go brown it would be worth significantly less.

          Also, no one is asking you to pay more for the golf course – No INCREASE in dues. OK, an argument could be made that you could potentially get a decrease of $10-$15/month in dues if none of this were to take place. But really? Is all of your ranting and raving about the purchase or support of the golf course really about that? I think not. I still believe (talking to EX- friends of yours and your other SU friends that continue to fight anything you perceive to be good for the SGCC) that your underlying motivations have only to do with your disdain for Blake Smith (you blame him (not the recession) for the home value losses) and having quit the SGCC and lost your membership purchase $$ you want the SGCC to fail, to somehow make yourself feel better. And WHERE do you come up with $60/month? Really???

          As for the 9 hole golf course losing money, what don’t you get about “community amenities”? They are not investments! They are not put there to make money! They are not expected to make money. They are community amenities, paid for by the community. i don’t have the numbers, nor the time or inclination like you to analyze the pool and the Town Center, but I’m confident it cost a lot to build, and does not make money through the sale of hot dogs and cokes in the summer.

          To that point, the board is NOT INVESTING in another golf course. It is purchasing the land and the water rights to insure the community has control over whatever ultimately happens to the property were it to go under, which BTW is NEVER going to happen. There are too many smart dedicated people (financial planners, Doctors, Lawyers, entrepreneurs, business owners) that will insure the SGCC stays viable and adds value to the community.

          And to Diane’s post… OMG REALLY? You need to get on the list for the Somersett newsletters….

          1. Barry

            I get it perfectly well, if one studies the golf club and HOA sites provided by Arrowcreek 411 – one fears for the worst – that all the residents could be poientially liable for maintaining another golf course. The estimate of $60 a month is from the HOA Board on the MySomersett website. I suspect that many residents, especially those not living on the Golf Course, in Sierra Canyon might welcome your suggested monthly dues reduction!

            I find it odd that you are always so antagonistic to views I have expressed and research I have published…as in many instances I find myself agreeing with you.

            My published research on Talon Pointe housing values actually shows that a golf view lot is worth somewhere between $15K and 25K extra when compared to similar houses without golf course views through 2013. This info is available on the MySomersett web site. I looked at summer 2014 resales as well and this shows that Somersett resales are about 75% of their pre-GR value…again this is publsihed on MySomersett. Based on comps from D’Andrea (not really comparable to Somersett – also on MySomersett) and Northgate, whether the course is green or not, there does not seem to be a measurable difference. On property values, it is always location, location and location – your house is only worth what someone wants to pay for it!

            I personally, have nothing but admiration for the declarant – Blake Smith, as he was able to steer Somersett through the Great Recession (here, my research shows that in Somersett, around Half a Billion $ in property values were wiped out). He kept our HOA solvent and avoided bankruptcy under exceptionally trying conditions. Even though development stalled at the time, the community has so many desirable qualities (cool high desert mountain vistas). An ecletic group of people from all over the US has decided that this is a great place to live! I note that some one has blogged under the name of “BringbackBlake” on Somersett United. In many ways the developer board is still appropriate, in the sense that the community is only 69% developed – over 1000 houses to go; rather than the “duplicitous” homeowner elected board we now have – Judge Polaha’s word not mine!

            Based on the comps I provided on water and land values, published on MySomersett, it does seem that the “purchase” seems like a good deal. I have stated publicly at open meetings that I believed the water rights are worth the purchase price. However, based on the last minute addition of Clause 3-9 to the purchase and lease agreement, we are giving up claims against the developer on our reserves of $1,000,000 plus and the still yet unsettled $15 a month “lease” agreement. This was not mentioned in the background info. provided by the Board when recommending a “yes” vote.

            As mentioned before, the Board have told us that if the SOA took over running the CGC – our dues could go up $50 to $70 a month. There are no cancellation penalties in the 50 year lease back. I believe that the Board should add a codicil to the agreement, saying that if the “lease” is cancelled (for any reason) by the private country club, the CGC will immediately converted into open space, trails – the costs for this have been estimated at a $1 to $5 a month increase in dues.

            There definitely must be protection for the homeowners from a potentially disastrous financial downside (which will dramatically reduce property vales) of the residents having to run a another golf course!
            The losses on the Canyon 9 are only mentioned to show that our elected board have not grappled with $12 a month extra we pay in dues to keep it going. The Board and First Residential are obviously not managing our expenses for golf efficiently. You maybe right about the costs of TCTC and the Swimming Pools.

            The SOA Board according to our CCR’s should be managing the assets we all enjoy, not just adding to them.

            Barry, I believe you when you say that the SGCC will not fail; you have also said that they are doing well enough not to need the SOA’s money. I would like to suggest that you put your energies into recruiting more members, rather than “ranting and raving” about bloggers and community activists who may have a different take on the situation than you do. I suggest that you carefully read the Econmist article on the “future of Golf” and hone your marketing campaign accordingly.

            To Peace, Love and Tranquility – in the beautiful foothills of Sierra Nevada Mountains.

  3. Since I know no one other than by reading this website the arrogance is appalling. You have tried to suppress anyone from questioning what is going on and made it impossible to get coherent information.

    So, what’s the real story? Are you buying or leasing the land for 99 years? And NO, my realtor didn’t tell me anything about Somerset having any “power” to make decisions for residents of Del Webb. The blatant lies, withholding of information, about 20 people posting on this site tells me you don’t want residents to know what’s going on and have made every effort to make sure they don’t get information! I didn’t vote as I never receive a ballot. I found out about this site “by accident” looking to get information about my new community. I can’t even find out when the board of Somerset meets. If not posted here, where? Then after I found out about the “purchase/lease” I had to search the Internet to find the original contract that was signed in 2013 regarding this boondoggle! And, I’m not the only one.

    I think most of the communities are totally in the dark on the actual consequences of this “deal” since you kept this transaction secret until October/November of 2014. Then it got out to some but with all the legalese, lack of legitimate information, not posting comments that disagree with “the board”, posting two weeks later or perhaps not at all and fragments we have to piece together by spending hours searching the site. To state the obvious, it has been one sided and sketchy. Plus, you have certainly tried to discredit any opposition. Then you decided to censor peoples comments if they disagreed or used language you don’t agree with. This is still America?

    I personally feel like I’ve landed in HELL with no recourse and tied to some regime with a secret society and agenda. Sounds like you have pulled the wool over the eyes of the communities within Somerset.

    It will NOT BE OUR DECISION IN THE FUTURE IF THIS LAND IS LEASED. You are doing the same thing the British did to Hong Kong. Who benefits after 99 years?

    You should have posted links way before now if you wanted to help residents with decision making.

    I do hope to meet “The Board” soon so I can see who has decided to try to run my life, forced me into paying higher dues, limited my world to certain areas of recreation, and kept me in the dark!

    Try posting times and locations for meetings so residents can become informed. That would be a great start for “Somerset United” 2015.

  4. It is unclear why SU continues to rail against the majority of the community they supposedly are part of. A nearly 4 to 1 vote by a majority of the total home owners would seem to identify the direction of choice. But SU continues present information that either is not applicable or not relevant.

    Golf may be declining over all across the United States but the core participants are dedicates and enthusiastic In addition the growth young stars on the professional circuits are bring new young players into the game.

    An alternative is the growth of computer games which I am sure most parents would confirm this is not the most healthy activity their kids could be engaged in. What other organized outside activities are there within Somerset?

    The other stuff included in the SU note have very little applicability to the situation here and should be assessed more accurately in their presentation.

    Terry Retter

    1. Yogiwan,

      Spoken like a true country club member! the vote is under 3 to 1 and not 4 to 1 as you quote. If you eliminate the country club members (over 400 per your president), builders (100’s of lots to go), and those who will go along with whatever the BOD recommends without any critical look, I believe the vote percentage would have been much different. In any HOA, given the apathy of most homeowners, it is difficult to overcome Board of Director and special interest actions (as in political campaigns, money rules). But that is what it is and we all must accept the results. Especially when the downstream impact will, in all probability, not be as bad as either side of the purchase agreement issue would like you to believe. Only time will tell.

      I agree with your assessment that the growth of video games, social media and the like is consuming our youth. However there is no validity to your premise that there is any increase in new young players embracing golf as an outside activity. A skateboard park would most likely attract more Somersett youth than the Country Club.

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