Real Estate
Sunday July 28,1996

Developer Catches Golf Housing Trend on Upswing

Egg Harbor Township Project marks rebound from recessionary slump

Now that 124 acres in the southern corner of the site, including 60 acres of wetlands, have been protected, Max Gurwicz & Son of Northfield is poised to start work on the first 133 of 246 one-family detached homes that will frame an 18-hole golf course and overlook a dozen manmade ponds.

The site of the $93 million project, Harbor Pines Golf Club & Estates, was once mostly woodlands. It lies at the intersection of Ocean Heights Avenue (Route 559) and Steelmanville Road near Exit 30 of the Garden State Parkway.

It will be built in two phases over eight years, said H. Edward Gurwicz, president of the development firm, long active in South Jersey. Harbor Pines is its first golf-housing project.

The company secured an $8 million loan from Collective Federal Bank in Egg Harbor Township to prepare the site for development, build the course and start the housing. The rest of the project will be financed through the revenue generated from the sale of the houses and club memberships.

Harbor Pines is proceeding at a time when golf-housing projects have rebounded from their recessionary slump. The reason; say industry experts, is the state's slowly improving housing market and the steady growth in the sport.

According to the National Golf Foundation in Jupiter, Fla., of the 468 courses that opened or were under way in 1995,147 - or 31 percent - have housing. While that percentage is lower than the 1989 peak when 50 percent of the courses built were tied to housing, the actual number of residential golf projects is slightly higher, indicating renewed developer interest.

In New Jersey, of the 11 courses opened or under way as of 1995, six have or will have housing. Ten more projects are planned.

Challenges persist, including the high cost and scarcity of suitable land, along with the huge expense associated with building the course. The use of pesticides at golf courses also remains a concern, but industry experts say development techniques have advanced and that chemicals applied properly will not hurt the environment.

DEVELOPERS consider the courses an amenity that will preserve open space and increase sales and land values. A 20 to 30 percent price increase can be expected for prime course-side homes over those without, said Gene Krekorian, senior vice president at Economics Research Associates, a real estate consulting firm in Los Angeles.

The trend in the 90's, he added, is toward building public instead of private courses, and golf clubs instead of country clubs. This way golf can stand on its own as a business and be less reliant on the housing, he said.

That is the approach at Harbor Pines. Mr. Gurwicz said he stayed the course through the long approval process, because he felt "homes abutting golf courses is a lasting trend." It also is an opportunity to offer a housing option not now available in the township, he said, noting that the project was being marketed to move-up buyers, including empty-nesters.

Cheryl and Ralph DeMucy are buying a ,home on the 10th fairway overlooking a lake. Unlike most people who live on golf courses, the couple - he is 53 and a consultant for a mortgage company, she is 46 and a homemaker - play golf.

"This gives us what we have been looking for - land, water and golf," said Mrs. DeMucy. "It's also a beautiful place to live and we feel the home will hold its value and increase."

Such projects also complement an initiative begun a year ago by the private Greater Atlantic City Golf Association.

Its aim is to promote Atlantic and Cape May Counties as golf travel destinations, in an area with many beaches and the attractions of Atlantic City close at hand.

Seven of the 12 casino hotels are being expanded, adding 3,000 rooms to the existing 9,500 and six more with some 9,000 addition al rooms are planned.

In March the association - which comprises nine courses, including Harbor Pines; 29 hotels and 22 allied businesses began to market golf travel packages via a computer network and automated software system. So far 4,130 packages have been booked, said Marcella Corti, its executive director.

"In the past golf travelers were hop scotching over us," Ms. Corti said.

A similar effort is under way in Sussex County. The nonprofit Sussex Golf Preserve Foundation hopes to promote private investment in open space and economic growth through the development of 15 to 20 golf courses by the year 2007. Half will be tied to housing, generating 1,500 residences.

Two courses are open, four are in the approval process and eight more are planned, said Jack Kurlander, one of the founders of the golf foundation three years ago. He is also a partner in the Black Bear Golf Club, in Franklin, one of the new courses.

Max Gurwicz & Son assembled the 520acre site for Harbor Pines over the last 20 years but did not develop it because the area was not served by a public sewage system. That changed in the late 80's when both the township and county sewer authorities sought to bring sewer lines through the Harbor Pines site to mitigate septic problems at an adjacent housing community.

Still, progress was slow. Because the tract is in an environmentally sensitive coastal zone, governed by state regulations, its development required extra layers of review.

THE discovery of wetlands on the site, which is zoned for 30,000-square-foot lots, was another issue. State law prohibits wetlands from being developed and establishes buffers around them, which meant preserving the 124 acres and downscaling the project from the 330 homes allowed. By negotiating a modification to the zoning to permit the smaller lots, the developer minimized the loss of homes to 84.

"It is a decent trade-off for the benefit the township got," said Randall E. Scheule, its director of planning and development.

To soothe concerns over the environmental issues of golf courses, Mr. Scheule said, the developer agreed to the township's request to adhere to more stringent management guidelines. If followed, he said, "there should be no problems." The state also monitors the impact on the groundwater.

He said the project also brings diversity to the township's housing stock. Entry-level homes predominate in Egg Harbor, where population grew by 6,163 to 25,717 from 1980 to 1994. Some 200 to 250 housing permits are issued a year, he added.

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