Drive Shack Inc (DSHK)

[Enterprising Investor]

3-story, $25M golf range lining up Goochland site (4/10/17)

Michael Schwartz

A publicly traded company bent on growing a national chain of high-tech golf driving ranges is eyeing the Richmond market for its second site.

Drive Shack, a New York-based firm that owns dozens of golf courses nationwide and is developing a brand of golf and entertainment venues similar to fast-growing Topgolf, is planning a three-story, 60,000-square-foot interactive driving range in Goochland County.

The facility, which the company estimates will cost upwards of $25 million, would take shape on a 13-acre site that abuts Route 288 just north of West Broad Street, according to documents submitted to the county.

The company describes its facilities as having “85+ indoor/outdoor hitting bay suites that offer multiplayer competitive games that both non-golfers and golfers can enjoy.”

The plot is part of a 121-acre assemblage owned by the Pruitt family, a major landowner in that stretch of Goochland and Henrico County. It’s unclear whether Drive Shack will buy or lease the land.

The company seeks to rezone its portion of the land to permit a “golf-themed entertainment and restaurant venue,” according to a letter sent out to neighbors announcing a pre-planning community meeting. That meeting will be held April 20 at 6:30 p.m. at Centerville Volunteer Fire & Rescue, at 52 Broad Street Road in Manakin-Sabot.

The letter by attorney Andy Condlin of Roth Jackson, who is handling the rezoning request for Drive Shack, says the facility will include a central restaurant, a shop, lounges, a gaming room, rentable event space and an outdoor terrace on the upper level.

“We hope to file in May 2017 and, subject to comments and feedback, hope to have rezoning approval from the Board of Supervisors by July 2017,” Condlin said. “Plan approval and necessary permitting will be completed soon after, followed by a nine- to 11-month construction schedule.”

Drive Shack investor presentations say the sites are expected to cost $15 million to $25 million to build, and to generate $3 million to $6 million in earnings within three to five years.

That location would give the company visibility off the three main surrounding thoroughfares and accessibility from a planned road off West Broad Street, as well as being within striking distance of the ever-westward expansion of Short Pump. It’s also not far from Kinloch Golf Club, Hermitage Country Club and Sycamore Creek Golf Course.

The 121 acres were most recently assessed by the county at $5.79 million. The plot is designated by the county’s comprehensive plan as “prime economic development.”

The local site would be the company’s second in development nationwide, joining an Orlando location in the works.

Drive Shack initially was backed by Newcastle Investment and golf gear brand TaylorMade. Newcastle late last year rebranded into Drive Shack Inc., through which it runs the driving ranges of the same name and its American Golf subsidiary, which owns more than 80 golf courses.

The company says in investor materials its sees opportunities to build Drive Shack locations within some of its existing golf courses, in addition to finding new sites around the country.
Drive Shack is billed as one of the more deep-pocketed competitors that have popped up to beat Topgolf into certain markets.

Should the Drive Shack project come to fruition, the company potentially will have out-dueled Topgolf in its bid to find a suitable Richmond site.

The company confirmed last year that Richmond was on its list of potential markets for expansion, saying it was looking in the area and “getting close to something.”

A Topgolf spokesperson said in recent months that it had not progressed any further in its plans for a local site.
The company lists a dozen locations in the works, in addition to about 30 in operation. It has outposts open in Virginia, Virginia Beach, Loudon and Alexandria. Among the Topgolf locations in development is a site in Orlando.

Topgolf is owned in part by golf gear brand Callaway Golf, and generated $300 million in revenue in 2015, according to the Financial Times.

http://richmondbizsense.com/2017/04/10/3-story-25m-golf-range-lining-up-goochland-site/