HSBC Golf Business Forum
Marriott Sawgrass Resort and Spa in Jacksonville, Florida
November 29, 2016; 4:45 pm
“A Public-Private Partnership to Develop and Build a Golf Destination
(The Story of the Building of the Robert Trent Jones Golf Trail)”
Dr. Mark Fagan, author, The Robert Trent Jones Golf Trail:Its History and Economic Impact
with a Foreword by Dr. David Bronner (2016 by NewSouth Books)
;@MarkFagan3
Presentation Outline
1.Economically Targeted Investments by Public Pension Funds
2.Legal, Financial, and Political Aspects of RSA’s Investment in The RTJ Golf Trail
3.The Public-Private Development Model (26 Golf Courses, 8 Resort Hotels, 8,000 Houses, and 5 million sf of adjacent commercial development)
4.Total Spending at Each of 11 Sites on the Trail
5.Market and Rounds Played at Each Site (580,000 in 2015, half from out of state)
6.Economic Impact (jobs, revenue) from Construction Spending at Each Site
7.Tourism Spending Increases Since Inception at Each Site and Entire State
8.Tourism Spending Impacts Since Inception at Each Site (jobs, revenue)
9.Economic Impact of Net Increase in Retiree Households to the State
10.Aggregate Economic Impact of the Trail and Adjacent Ancillary Development
11.Progress Toward Objectives of the Trail
12.Partnerships Forged During Development of the Trail
13.Benefits of the Trail
14.Conclusion on Return on Investment for RSA
Narrative
In 1990,Dr. David Bronner, CEO of The Retirement Systems of Alabama, began investing public employee pension money in Alabama for a series of public golf courses and resort hotels to increase spending by tourists and retirees to increase jobs and tax revenue. The potential economic growth from this investment along with an acceptable return on investment was the justification for investing state pension money in this project. This Robert Trent Jones Golf Trail has morphed into a massive state-wide project which attracts touristsfrom around the nation and world. The world-class golf courses have led to enormous real estate development across the state.
RSA’s $770 million in assets in this project have morphed over 25 years into 11 golf complexes (five 54s, five 36s, and one 18 totaling 468 holes over 5,700 acres including 540,000 square feet of clubhouse and building space; 8 resort hotels totaling 2,065 rooms, 20 restaurants/bars, and 326,000 square feet of meeting space and performing arts center; and two retirement/resort housing communities. RSA invested hundreds of millions of dollars to purchase four existing hotels and refurbish them and construct four new hotels.Subsequent development at the 11 golf sites by private entities has resulted in an additional $3.3 billion invested in over 8,000 houses and over 5 million square feet of commercial space.
Hundreds of people in Alabama worked as partners to actualize this investment. Each of the 11 golf sites required negotiations as a stand-alone project. The process of acquiring land, access roads, and utilities varied at each site. Privatedevelopers donated the land or local governments leased the land for no charge. The local governments wanted the job creation and increased tax revenue so they made financial contributions toward the proposed project for their area. There were varied financial arrangements among the sites. Projected economic impact analyses of the finished sites were needed for justification and financial planning for bond issues. The local political process included approvals by decision makers and support of their constituents which meant the media was involved as sources of information on the proposed projects.
Government entities involved during the development, operation, and promotion of this statewide development included: Governor’s Office, Legislature, two RSA Boards, Alabama Development Office, Alabama Highway Department, Tennessee Valley Authority, US Army Corps of Engineers, Alabama Department of Environmental Management, Alabama Department of Conservation and Natural Resources, Alabama Department of Public Health, Alabama Department of Tourism, Economic Development Partnership of Alabama, 15 City Councils, 6 County Commissions, one Municipal Water Board, one Local Development Authority,11 local planning commissions, 5 local zoning boards, 11 local chambers of commerce, and 7 local tourism boards. Private entities involved include 7 private developers, 6 major contractors, dozens of subcontractors, one golf course management company (SunBelt Golf), and one hotel management company (PCH Hotels and Resorts) manages the hotels.
Marketing of the project has included $50 million per year in free publicity for 20 years from the two RSA controlled media companies ($3 billion investment in Raycom Media’s 60 television stations and CNHI’s 130 newspapers).There have been 32 LPGA, Senior PGA, and PGA tournaments on the Trail. These tournaments have received some 350 hours of television coverage worldwide on the Golf Channel. There have been 5,000 positive media stories worldwide about the Trail. These courses have had 12 million rounds, half from out of state golfers, since 1993.
Thousands of jobs and billions of dollars in tax revenue have been generated from the $4 billion in construction spending. Billions of dollars in increased tourism spending since 1990 have led to thousands of new jobs and billions of dollars in tax revenue.
The total economic impact from this investment came from the construction spending and was $8.5 billion including $4.6 billion in value added, $2.9 billion in earnings, and 84,000 jobs. More tax revenue was generated from this spending than RSA’sinvestment in the golf courses and hotels.
The continuing economic impact from this development is occurring from the increased annual tourism spending since 1990. In 2015, there was an annual increase of almost 10 billion dollars over 1990. In 2015, there were 54,000 more tourism related jobs in Alabama over the 1990 level. Cumulativeincreases in Alabama from 1990-2015 were: tourism spending of $100 billion; sales and lodging taxes of $10 billion, and 290 hotels/25,000 rooms.
An additional economic impact is from the increased retiree households in Alabama since the 1990 level. Retirees compose a large component of golfers and golf is a factor in their choice of a retirement destination. Finances for these households include almost $2 billion in assets and around $500 million in annual income. These approximately 10,000 households have the same economic impact as 35,000 jobs.
Partnerships were developed between RSA and local governments during the development of the RTJ golf complexes and RSA hotels. One partnership was with the city of Mobile to construct and refurbish Class A and Class B office space which helped to revitalize downtown Mobile. Another partnership was working with the city of Montgomery to expand the Civic Center, develop the Performing Arts Center, and add restaurants/bars to assist in the revitalization of downtown Montgomery. RSA worked with political and economic development leaders in The Shoals to secure two major manufacturers, one producing aluminum and one producing rail cars/large trucks/buses.
RSA partnered with Daniel Corp and US Steel to develop an outlet mall and planned community near Leeds.
RSA’s total return on their investment in the Trail cannot be calculated until if or when these assets are liquidated and the equity realized. RSA’s equity in the golf courses, hotels, and spas and RSA’s continued promotion of this Trail is worth more to Alabama than if these assets were sold and the money reinvested elsewhere. The perpetuity of the increased tax revenue generated from the tourism spending is worth more to Alabama each year than a few more percentage points return to RSA. The value of each site has fluctuated depending on market condition changes through the years. The Trail remaining as one entity and promoted by RSA media companies as a major tourist attraction is worth more than if individual sites were sold and managed separately.
The Trail has created thousands of jobs and billions of dollars in tax revenue. It has enhanced the image of the state and helped to attract industry and improve the Alabama economy.
The Robert Trent Jones Golf Trail: Its History and Economic Impact, a new book by Mark Fagan with a Foreword by Dr. David Bronner, is a tribute to the hundreds who worked to develop the Trail and the thousands who have worked as a result of the Trail. It is the illustrated historical account of the financial, legal, political, and economic impact details for each of the golf sites, hotels, adjacent housing, and commercial development that were the outcome of RSA’s investment. It is published to preserve this information for historians, archivists, economic developers, researchers, professors and students in business schools, and the general public. The book is available in hardback (384 pages), Ebook, online retailers, or directly from the publisher, NewSouth Books, at
Mark Fagan received his doctorate in social policy, planning, and administration at the University of Alabama and is Department Head Emeritus at Jacksonville State University where he assisted the Retirement Systems of Alabama on various aspects for the development of the Robert Trent Jones Golf Trail for the last 25 years.
Quotes about The Robert Trent Jones Golf Trail: Its History and Economic Impact by Mark Fagan with a Foreword by David G. Bronner
John Herr, speech writer for 2 stints in The White House (H.W. Bush, W. Bush)
“In 317 meticulously researched, beautifully photographed pages, Fagan lays out the story of how a plan to raise money for state pensions led to the world’s largest single golf construction project.”
Roger Rulewich, Chief Architect for 34 years for Robert Trent Jones, Sr. and primary architect for the Trail.
“What an incredible effort!! The detail is overwhelming. You have credited everyone that had a role, big or small, in making the Trail happen. Don’t know how you did it!! It has been a rewarding time spent with THE BOOK. I never knew all that went on behind the scenes.
Dr. David G. Bronner, CEO of the Retirement Systems of Alabama (RSA)
"This book is worthy of the dramatic history it recounts, and is a testament to all the people who worked so hard to create the Trail.”
Katharine Dyson, writer for TravelGolf.com, WorldGolf.com, FloridaGolf.com, GolfAdvisor.Com, Finger Lakes Wine Country, CNY Golfer, Luxury Travel Magazine, GolfTrips.com, New England Golf & Leisure, New England Golf Monthly, GolfFashionWeekly.com, GolfHomesWeekly.com, Southern New England Golfer, CNY (Central New York) Golfer, and GottaGoGolf.com.
“Fagan’s new book: A must have for those playing and staying along Alabama’s RTJ Golf Trail.” “If you plan to go, we highly suggest you get a copy of Mark Fagan’s book. The chapters are thoughtfully organized with highly, easy-to-read, descriptions of each of the 11 sites.”
Kiel Christianson, senior writer and equipment editor for WorldGolf.com has golfed extensively on three continents and has reviewed courses, resorts, and golf academies from California to Ireland.
"Fagan’s book is a meticulous account of how the Robert Trent Jones Golf Trail -- Alabama's largest tourist attraction by far -- came to be. A chapter is devoted to each of the 11 RTJ Golf Trail sites. From inception to design to the legal and environmental hurdles overcome in development, each chapter is a case study in golf-course development. Equally impressive is the wealth of information and analysis of how the RTJ Golf Trail has benefited the state of Alabama. Fagan summarizes the profound contribution of golf to the state's finances and …. lays out a blueprint for how golf can transform the economy of an entire state. If I were to teach a course on the golf business, Fagan’s book would be a required text.”
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