The following is excerpted from Routing the Golf Courseby Forrest Richardson (©John Wiley & Sons, 2002)

Programming outlines can be used to establish budgets, or they may be used to prove established budgets are right or wrong. Either way, the need to arrive at budgets, at least for a vast majority of projects, is essential.

The viability of a project is determined when the budget is held up to the light and a realistic return on the investment is calculated. There are as many ways to make this comparison as there are to hit a sand shot. One of the best approaches is to use what is called the warranted investment approach. This approach establishes a threshold of investment cost for the project based on a specific return of profit. It is common for a feasibility study to provide multiple scenarios for a warranted investment. One might show spending $3.7 million to build an 18-hole course as the limit of warranted investment if the money is to be recouped within five years. Another might show that $4.9 million could be spent if the developer could justify a payback in eight years. Yet another scenario might show a warranted investment of $5.2 million if 27 holes were built all at one time.

It is imperative to realize that costs are not restricted to the initial costs to design and build. The true cost of a project extends to the costs of operation, both initial start-up costs and those projected each year that the study covers. The magic term used to bring the worlds of investment, debt service, operations, and profits together in one happy place is pro forma, Latin for “the appearance as seen from in front.” The job of the pro forma is to see into the future — to establish, realistically, what will be if the development plan is carried out as it has been described.

The warranted investment approach, because it offers a threshold, can be used as a baseline by the planning team. Regardless of whether the figure is generated before routing or based on a specific routing plan, the dollar amount can serve as a balancing point from which spending less will translate into better profits and higher return and spending more will very likely make someone’s day unpleasant.

A derivative of the programming process is the probable cost. Teams of people generate cost estimates for the golf course and all of its facilities, infrastructure, and details. This probable cost — or costs, if there are multiple options and programs — gets wrapped into the feasibility study or pro forma.

Wide differences are possible in determining project viability depending on the type of owner and developer behind the project. A private, for-profit owner/developer whose only stake lies in the ability of the golf course to return a profit will not be able to lose money and must answer to the bottom line at all costs. On the other hand, the homebuilder or resort developer can often justify a loss on golf development if the positives outweigh the negatives. A homebuilder can build golf courses all day long if the premium on lots exceeds the cost of the investment in building the course. A resort developer may find it reasonable to experience a modest loss on the golf investment if the course serves to attract guests to book rooms and extend their stay. A municipality can justify golf development for the good of the community and in the name of public recreation. This may be true even when it may take a significant period for the municipality to recoup the investment, or when a slight loss may be associated with the course.

A Reason for Being

Among the most crucial aspects of determining programming is defining why building a golf course is being considered. This calls for sorting through the owner’s goals and objectives, then mixing in the answers to questions about whether or not the proposed locale can support a new golf course. When all of these data have been digested, it is possible to state — usually in one succinct sentence — the fundamental reason for being that the golf course will have when completed.

Primary Golf Ingredients

In reality there are but six primary ingredients must be considered before beginning to draft a program. They represent the essential elements that support a golf course and not necessarily the many improvements that will be installed or shaped during construction. Without each of the following, there can be no golf course:

. Acreage – The land on which a course is to be built
. Soil – The basis from which turfgrass will grow
. Water – The lifeblood of turfgrass, whether natural or artificial
. Suitable conditions – Appropriate for turfgrass and the game of golf
. Money – A simple enough concept
. Golfers – Without whom a golf course is rather pointless; the population must be interested

Now, in anticipation of the clever chap who will argue that you can still build golf courses on dirt tracts with sand greens, or ones with artificial turf and no need for water or good soil, or that there is nothing to prevent an eccentric rock star from building a course just to look at, I list his points here to save him the trouble. But for the practical golf course, the type that 99.9 percent of the world can relate to, you need the above or you are sunk right off the bat.