Spending spree by investors from China dips into high-end Myrtle Beach golf courses

A group of investors from China is continuing a spending spree in the Myrtle Beach golf market, and has now entered the realm of the Grand Strand’s high-end and high-profile courses.

The group has purchased four courses over the past week, including the TPC Myrtle Beach and International World Tour Golf Links, which are regarded among the top courses on the Strand with green fees that exceed $100 in the peak season – the TPC annually exceeding $150.

It also has purchased River Hills Golf & Country Club and Aberdeen Country Club.

The buyer is Yiqian Funding, which is represented by New York City attorney Nick Dou and Daniel Liu from the Chinese parent company, who were both in Myrtle Beach on Tuesday. Black Bear Golf Club owner Kang Zou also has become part of the investor group, which now owns and operates eight area courses.

In late September, the same group purchased the last three courses in the market that were owned by GGG of Myrtle Beach and operated by Classic Golf Group – Burning Ridge Golf Club, Indian Wells Golf Club and Founders Club at Pawleys Island. Classic Golf Group general manager Rick Taylor was retained as the GM of the nascent management company called Founders Group, which now oversees the eight courses.

Dou said the group has spent nearly $40 million buying seven courses over the past three months, and has no plans to do anything but keep them open and operate them as courses.

“We don’t want to convert golf courses to residential areas, development areas,” Dou said. “No, we want to keep them nice and beautiful.”

Accustomed to searching for good investments in Manhattan and other expensive cities, Dou said his group believes it has discovered a near investment nirvana in Myrtle Beach.

“We think Myrtle Beach is a diamond in the rough,” Dou said. “It’s a good location, good weather, living expenses and property taxes are low, it’s a good place. The golf culture is very deep for golf courses. That’s why we like it.”

Yiqian Funding may not be done purchasing area courses, but the pace is certainly going to slow down. “We need to cool down and think about it,” Dou said.

The group is open to purchases outside the realm of golf, as well. “Maybe if it is good,” Dou said.

The purchases also quickly decrease the number of courses operated by National Golf Management, the largest course ownership and management company on the Strand and one of the largest in the Southeast, dropping its number from 23 to what will be 19 by Jan. 2.

NGM vice president of sales and marketing Steve Mays said Tuesday night that his company hadn’t yet been notified that it will no longer be managing TPC. Dou and TPC co-owner Chip Smith said the sale has been completed but won’t be registered until Jan. 2, so NGM may retain management until that date.

The TPC and River Hills were two of eight courses managed by NGM, while Aberdeen is the first course owned and operated by the company that it has unloaded since NGM was created through a merger of Myrtle Beach National Company and Burroughs & Chapin Golf Management in March 2012.

In addition, Mays said an expiring management contract for Wachesaw Plantation East won’t be renewed in 2015. “Their term of the contract came up and both groups decided it was best to part ways,” Mays said.

“From a company growth standpoint, we’re still looking to solidify and maintain our presence here in the Myrtle Beach market and continue to look for growth opportunities outside the market.”

Investors from China now own twelve 18- or 27-hole courses in the Myrtle Beach market – all purchased in the last 18 months.

In June 2013, a businessman who is known as Mr. Pan and described as a successful industrialist with varied interests, including several real estate holdings primarily in China, purchased the three-course Sea Trail Resort in Sunset Beach, N.C., for $8.5 million at a Chapter 11 bankruptcy auction.

This past March, China resident Shengwen Lan, who became familiar with courses in the area by playing in the 2013 Myrtle Beach World Amateur Handicap Championship, purchased Crown Park Golf Club in Longs for between $1.5 and $2 million.

In June, Kang Zou, an engineer who has lived in New York, along with his parents, restaurateurs Chun Lan Li and Shi Lin Zou, purchased Black Bear in Longs for approximately $1.5 million.

All of the courses remain in operation, and some in the market believe the influx of Chinese owners, their capital infusion and possible inroads to new player markets may benefit the market.

“The golf market has been a little bit tough and we as a market have been trying to go after the Northeast for many years without tapping any new markets,” Smith said. “They have an opportunity to tap a new market in China and I wish them well. I think they have a good opportunity to at least attempt to go after a new market that we would not be able to make as much stride in.”

At each course, all employees have been retained including management. Those managers are TPC head pro Nick Isom, World Tour general manager Tom Plankers, River Hills head pro David Spoon and Aberdeen’s Steve Schafer, who was promoted from being a first assistant under a head pro who has been retained by NGM.

“Everybody stays if they want to stay. We hope they stay here,” Dou said. “We come to pay, then we go. We pay a lot of money here for the Myrtle Beach people, economy and taxes. We support a lot of families here. It’s good for everybody.”

Taylor said longtime River Hills GM Harriss D’Antignac would have been retained had he not chose to retire. “I’m old enough to retire and that’s what I’m going to do,” D’Antignac said.

According to the Horry County Register of Deeds, World Tour sold for more than $9.9 million, River Hills sold for $2.45 million and Aberdeen sold for $3.3 million. Neither Smith nor Dou would disclose the TPC purchase price.

Dou said the investors hope to make a return on their investment, but realize that will take many years. “Of course everybody’s concerned about the profit,” he said. “It’s very important to us. We invest a lot and we want to get a return. That’s reasonable.

“… Everybody, they say we’re crazy Chinese investors, right?” Dou joked.

Founders Group wants to reopen the International Nine holes at World Tour that were closed about a year ago by former owner Mel Graham for planned redevelopment. “It’s better to open it to have 27 holes,” said Dou, who anticipates the closed nine will require an investment of $200,000 to $300,000 to reopen.

Of all the golf course purchases, Dou has identified only about 20 acres at World Tour that the group may try to redevelop, likely with high-end condos that will go along with existing condos built in recent years around the course.

One course that won’t be purchased by an investor from China – for now at least – is Pineland Country Club in Nichols. Kang Zou had discussed a purchase with Pineland owner/operator Danny Baxley, but recently ended his attempt to buy the course, which is listed for $649,000.

“We’re back on the market and it’s business as usual,” said Baxley, who is hosting a customer appreciation Christmas party Thursday with free golf and free lunch that is open to the public.

Zou believes the course may be located too far from the center of the Strand golf market for his purposes, but said he may still revisit negotiations.

It has been one of 15 courses that NGM both owned and operated. “What this allows us to do is focus on our most profitable properties,” Mays said. “. . . We’re still excited and bullish about golf, and still excited and bullish about golf in Myrtle Beach.”

He held onto the Jackson design thinking his family may want to retain it, but said his two daughters have other careers and aren’t interested in running it. “You’ve got an emotional attachment to it, no doubt about it,” Hardee said. “But what I really do is build highways and build golf courses, I don’t really care for running them. It just doesn’t fit everything else that I do.”

Golf Holiday sold its interest to the tour to avoid competing with its members in the market, Smith purchased the course in 2007, and Danny Young later became a co-owner.

“It was a profitable venture, but in the end it was a business decision and good return on on our investment so we decided to move forward,” said Smith, who has developed the Prince Creek residential area around the course and has been managing the city-owned Whispering Pines Golf Club since Oct. 31.

“World Tour is a very special place,” Graham said. “There is no other golf experience like World Tour. We offer service and quality second to none in the Myrtle Beach market. I am very proud of my staff and employees who have made World Tour the very special place it is.

“I have really enjoyed getting to know the new owners and will continue to do anything we possibly can to help continue the World Tour success under their leadership.”