Lords of the links: these days, conspicuous consumption is out—except among CEOs who build their own golf courses - Executive Privilege

Chief Executive, The, Oct, 2002 by Paul Rogers

Years later, Wayne Huizenga still remembers the conversation. He and his wife, Marti, were flying home to Florida on their private jet after sailing the Mediterranean on a friend's 175-foot Feadship yacht when she turned to him and suggested what at first seemed an outlandish idea.

Huizenga, the billionaire entrepreneur who made his fortune building Waste Management and Blockbuster Entertainment, was in the process of developing a golf course on 300 acres he owned on the banks of the St. Lucie River, north of Palm Beach. He planned to build some houses for sale on the property to help defray the cost.

But now Marti Huizenga had another idea. Why not scrap the houses, she proposed, and keep the entire preserve to themselves? At first, Huizenga says, he thought she was kidding. But when he realized she wasn't, he soon came around. Their golf course -- a championship 18-hole layout designed by the legendary Gary Player--opened six months later, in 1996. Within two years, they built an expansive Old Florida-style clubhouse, replete with a cherry-wood wine cellar, wrap-around verandas and paddle fans, along with twin guest cottages, two helicopter pads and a 68-slip deep-water marina. The Floridian Golf and Yacht Club was born. Official membership: two.

Extravagant? Absolutely, says Huizenga, 64, who, now in semi-retirement, owns the Miami Dolphins, is chairman and CEO of Boca Resorts and serves as nonexecutive chairman of three other public companies, including AutoNation, the largest car dealer in the U.S. "What are you supposed to do with money?" he asks matter-of-factly. "You work hard to get it and you have to spend it; you want to enjoy it. Some people build big houses, other people build big yachts. It just depends on what you want to do."

Beginning with John D. Rockefeller, the patriarch of corporate golf, America's captains of industry have been building their own links for over a century, not all of them as exclusive as The Floridian. But thanks to the economic boom of the '80s and '90s and the burgeoning popularity of the sport, the phenomenon has clearly picked up. "It has become a status symbol of sorts," explains Chad Ritterbusch, spokesman for the American Society of Golf Course Architects, based in Chicago. "And I think there's no doubt that it is a growing trend, not only among chief executives but others with significant means." He said he has seen no indication that the trend has slowed due to the economic downturn.

Rockefeller was such an avid golfer that at the turn of the 20th century, shortly after learning the game, he had a 12-hole course laid out for his personal use at Pocantico Hills, his Tarrytown, N.Y., estate. In 1962, Walter Annenberg, the publishing magnate and future ambassador to England, commissioned a nine-holer called Sunnylands on his property in Palm Springs, Calif.

Recent examples are more lavish. Casino mogul Steve Wynn paid a reported $45 million to transform a barren desert plain in Las Vegas into a verdant oasis of rolling fairways, imported trees and a man-made three-quarter-mile creek. Wynn's Shadow Creek Golf Club opened in 1989, and for 10 years he was its only member. He's since sold the club to MGM Mirage, which offers tee times to guests of its nearby resort for $500 a round. In 1997, the aptly named Sanctuary Golf Club opened in Sedalia, Colo., the private preserve of Dave and Gail Liniger, founders of the real estate empire Re/Max. The course, which the couple says cost well over $12 million, is carved out of scrub oak and ponderosa pine, featuring waterfalls and steep elevation drops.

Huizenga chooses not to say how much he's spent on The Floridian. In fact, he insists he purposely doesn't know the total amount. "I told the guys in my Fort Lauderdale office," he says, "'Don't ever tell me what I've got invested--I don't want to spoil the fun.'"

By almost any standard, the cost of such a project is enormous. Generally speaking, it takes at least $7 million just to build an upscale 18-hole course--plus several million more for other expenses such as acquiring the land (typically about 200 acres), hiring environmental consultants and building a clubhouse, says Jay Morrish, president of the golf architects society. On top of that are annual maintenance fees of $1 million or more.

"Twenty years ago," explains Morrish, "we used to say a developer needed to have $8 million in his pocket to get started. Now, it's hard to say. But I think you'd feel very uncomfortable if you didn't have a $15-20 million line of credit."

Given the size of his investment, Huizenga has made sure to create an exit strategy should he, or his heirs, someday want to sell The Floridian: He purchased 1,700 acres across the street, which, if packaged with the golf course, would be attractive to residential developers. "Right now, we're feeding it every month," Huizenga says of his financial commitment to the club. "But sometime in the years to come I might not be around. My kids could recoup the expenses we're paying today."