Are We Headed Toward Wall-to-Wall Golf Courses?
Price of Paradise · Hawaii Public Radio · aired 1993-07-01
Guests: Marcia Sakai (Professor of Economics, University of Hawaii at Hilo); Bruce Plasch (President, Decision Analysts Hawaii)
Duration: 00:34:23

[00:00:04] Randall Roth: Good morning. This is the Price of Paradise Radio program. I'm Randy Roth, and my guest this morning are Marsha Sakai, an economics professor at the University of Hawaii at Hilo, whose research focuses on tourism, economic development and tax policy, and Bruce Plash, he's president of Decision Analysts Hawaii, a consulting firm that specializes in public policy analysis, land and housing, economics, and market assessments. Marsha, are we headed for wall to wall golf courses?

[00:00:35] Marcia Sakai: Probably not, Randy. I think that's somewhat of an overstatement. The boom in golf course planning that we saw in the late '80s and around 1990 was probably the result of developers trying to capitalize on what looked like a strong demand and strong income streams from existing golf operations. And as well in Hawaii, I think it reflects a a lot of the tourism related development that had begun by the mid '80s. But recently, there seems to be some slowdown in development. I read in the Pacific Business News recently that the the course that was planned for the North shore has been scrubbed um as they stated in in uh in with respect to the community preference to maintain their rural lifestyle. As well, I also noted that uh there's a golf course in Maro that has against which a foreclosure suit has been filed.

[00:01:36] Randall Roth: Well, should we be celebrating this or is this bad news that the uh uh boom seems to be over when it comes to golf course development? Bruce, what do you think?

[00:01:45] Bruce Plasch: Well, actually, I think um we should not be celebrating that. I think golf courses do provide a number of uh benefits that are not commonly realized and they um cost of golf courses are less than most people realize. But uh the community doesn't seem to appreciate golf courses or at least doesn't seem to want more golf course development. Is that because they don't understand the implications of more golf courses, or is it because they're approaching it uh differently than how an economist would approach it?

[00:02:18] Randall Roth: I don't think they approach it differently. I think it's uh more that the information is not been made that public on the benefits of golf courses. Um you know, a number of golf courses do get proposed including golf courses by not only private developers but by the state and by the county governments and they do get approved and um Maui County and Hawaii County are on record uh as desiring uh golf courses in West Maui and and West Hawaii because of the benefits they provide. And yet a study done by SMS here in in town several years ago indicated that the community is is really quite skeptical. Marsha, do you agree with Bruce that the community doesn't completely understand for some reason, just what the impact of more golf course development would be?

[00:02:57] Randall Roth: 

[00:03:15] Marcia Sakai: There's probably an element of that, but I also believe that that the community associates quite strongly the development of golf courses with further tourism development, and that appears to be the thing uh which which the community is opposing. I think people realize that tourism is a really important part of the economy and support efforts to maintain a viable strong tourism uh industry. However, uh I also believe that most people do not want to see the tourism industry get very much larger and they probably view the um development of more courses as a as some kind of growth in in tourism industry. That's that would be one factor.

[00:04:01] Randall Roth: I see. Bruce, what about the possibility that more golf courses would elbow out agriculture or would make land even more scarce than it is and thereby push housing prices up. Is that a legitimate concern?

[00:04:14] Bruce Plasch: Well, it's uh it it is a major concern and legitimate concern, but you can't actually build a lot of golf courses without adversely affecting farming or adversely affecting the housing market. Um taking the housing market first that the development that's taking place out in Eva in Central Wahu where there are a lot of golf courses being proposed or and actually being built out there uh provides a good example of where you can locate golf courses without adversely affecting the housing market. There many of the golf courses are being built as part of the drainage system and being built in flood planes so that um that if there's an occasional flood, the water accumulates in the golf courses rather than um the traditional approach of using a concrete storm drain. Um also you're having golf courses out there being built in blast zones and the in areas that form the approach to the airport so that it's essentially the crash zone or in high noise zone where you don't want to build homes. And also golf courses being built underneath the power lines that cross Central Wahu.

[00:05:29] Randall Roth: I see, so maybe the community is concerned that golf courses will go into the wrong locations. That if they go into the right locations, there are more pluses than minuses?

[00:05:38] Bruce Plasch: I think that's true.

[00:05:39] Randall Roth: I see. What about water supply? Whether it's in a good location or a bad location, it's going to use an awful lot of water, isn't it, Marsha?

[00:05:46] Marcia Sakai: I would imagine so. I don't know the rate of water usage for golf courses, but I know that they were one of the targets for the Honolulu Board of Water Supply uh water usage uh controls.

[00:05:59] Randall Roth: I assume coming from Hilo, you don't worry quite as much about water as we do here on Oahu.

[00:06:03] Marcia Sakai: No, we don't we don't worry about water. And most of the courses that are developed on the West side of the Big Island are pretty much mandated to develop their own water source. Uh some of the courses that I'm aware of use non-potable water.

[00:06:16] Randall Roth: So it's not really reducing the amount of of drinking water that's available to the people who live on the Big Island.

[00:06:23] Marcia Sakai: Not to any significant extent.

[00:06:26] Randall Roth: I see. Bruce, what about Oahu?

[00:06:28] Bruce Plasch: Pretty much the same but again in Eva the golf courses there are going to be watered or are being watered with brackish water that has has a high salt content. And uh there are eventual plans to use uh treated waste water. Um that is being done in various parts of Hawaii already, especially uh in West Hawaii, where there's um both the water shortage problem and a uh problem of disposing the waste water. So you can take that treated waste water and put it on a golf course and it's a nice clean way of disposing of that water rather than dumping it into the ocean.

[00:06:59] Randall Roth: Sounds like a win-win arrangement.

[00:07:11] Bruce Plasch: It can be.

[00:07:12] Randall Roth: You're listening to the Price of Paradise Radio program. I'm Randy Roth. Our guests this week are Marsha Sakai, economics professor at the University of Hawaii at Hilo, and Bruce Plash, president of Decision Analysts Hawaii. Marsha, my wife asked me to ask you, what about pesticides? Aren't they a real problem trying to keep all that golf core grass, especially green?

[00:07:36] Marcia Sakai: Well, I don't know much about the use of chemicals on golf courses. I think I think one would also have to consider the use of fertilizers in addition to pesticides. I I would think that it's possible to control the the use of chemicals so that it's not any more damaging, say, than uh especially if the land were an agricultural use prior to that, not any more damaging than it otherwise was.

[00:08:06] Randall Roth: Yeah, that's not comforting to people who remember the heptaclo problem not that many years ago. Bruce, do you have any additional thoughts on this one?

[00:08:14] Bruce Plasch: Well, I agree, but I would go further than that. Um and again, I'm not an an expert in that area, but I have listened to a lot of testimony uh prepared by university researchers because they've been following [unintelligible — audio glitch] impacts of golf courses for quite a while with very close monitoring. And actually, golf courses are far cleaner than agricultural uses of land or urban uses of land. It's regarded as one of the most benign human uses of land. So, it's generally it's not a problem at least according to the testimony, and next and uh research reports that I've read coming out of the University of Hawaii.

[00:08:57] Randall Roth: Well, as an employee of the University of Hawaii, that that sounds good to me. What about rural lifestyle? Are our golf courses taking away something that's that's uniquely Hawaiian? Uh is is it changing the lifestyle of the people who live anywhere near those golf courses? Marsha?

[00:09:19] Marcia Sakai: I'm trying to think of some specific examples, Randy. Most of the golf courses that that um have been in operation on the Big Island for a number of years were actually built uh relatively far away from population centers. So that I don't think that those older golf courses could much have uh altered rural lifestyles. Currently, uh plans for proposed golf courses are uh targeted for areas that have small communities, and in many cases, the people that live there have been very concerned uh that the golf course will bring urbanization and change the lifestyle that they're used to. In these situations, it appears that where the developer is sensitive to the community and in fact, uh it it appears to be the case that develop golf course developers are making a lot of effort to find out what it is the community is concerned about and uh what kind of benefits they can provide for the community. So while there may be this impact, I think that uh the developers have been trying to address it.

[00:10:43] Randall Roth: So as long as the community stays interested, informed, and uh demands that proper things be done to address those issues, you you're optimistic?

[00:10:52] Marcia Sakai: Yeah, I I think that that full information, you know, is what should guide uh group decision making.

[00:11:15] Randall Roth: Bruce, what do you what do you think about this concern that some people have that golf courses aren't quote Hawaiian? That with golf courses, we're competing with Mexico and uh South Carolina and a number of other vacation destinations and that we should be uh building on our strengths, our uniqueness rather than competing on their level.

[00:11:47] Bruce Plasch: Well, golf courses uh have been around in Hawaii actually for quite a long time. Not sure when the first one was built, but I think it's around the turn of the Century. That's right. Uh Bruce, we have the second oldest golf course in in the Western US, here in Hawaii. So they have been around a long time. And they do um help bring visitors. There are a number of of visitors that do like the golf, and it adds another attraction. And basically, it helps it does help keep the hotel rooms full similar to a convention center.

[00:12:35] Randall Roth: Why is it that so many people like the golf? Uh I think other than lawyer jokes, one hears more jokes about uh golfers. Um somebody told me the other day about the fellow who was about to tee off and a funeral procession was driving by so he immediately dropped his club and dropped his head and had a moment of silence. And his golfing partner said, what's going on? I've never seen you do that before. And he said, well, after all, she did give me the best 45 years of her life. Marsha, first let me apologize for that. But then let me ask you, why is there this craze? Why do people seem to enjoy playing golf so much, especially the Japanese, but just people in general like golf. Why is that?

[00:13:36] Marcia Sakai: Well, you're asking the wrong person, Randy. I'm not a golfer.

[00:13:41] Randall Roth: Bruce, do you swing at them?

[00:13:42] Bruce Plasch: It's it's beyond me. I find it a very frustrating experience. Uh but you do when you do talk to golfers, they they describe it like it's a Zen-like experience but it escapes me.

[00:13:56] Marcia Sakai: Well, you know, it gives you a chance to be outdoors. Wait a minute. I thought you wanted to golf. Oh, I'm just trying to imagine [unintelligible — audio glitch] motivates a golfer. And you're in a group so you have a leisurely chance to talk with other people. Um Sounds good to me. You get to hit at a ball.

[00:14:13] Randall Roth: Well, plus, I think there is is this reputation that a lot of deals get done on the golf course that somehow or another, if you're a golfer, you're more likely to be politically connected or able to work out big business deals. What do you think? Is that fact or fiction, Bruce?

[00:14:52] Bruce Plasch: Well, I have heard that a lot myself.

[00:15:00] Marcia Sakai: I can't really again, um it's it it seems to be borne out by anecdotal evidence. I have a number of friends who are sending their kids through junior golf because it's going to prepare them for the business world.

[00:15:07] Randall Roth: Sounds like I better take up the sport. Uh is our population aging and is is that a factor in this uh golf course development issue that we're here to talk about?

[00:15:28] Marcia Sakai: Oh, definitely, I think. Uh the population is aging mainly because the baby boom boom crowd, which includes people from I would say late 40s down to late 30s, uh are getting into an age where they have both the income uh [unintelligible — audio glitch] make the expenditures on golf equipment and and greens fees uh and as well are not as athletic or useful as they once were and golfing provides a nice physical activity, uh I I believe recreational activity that would appeal to older and older population.

[00:16:21] Randall Roth: Sounds to me like you're thinking about taking up the sport.

[00:16:42] Bruce Plasch: Well, Bruce, what what's the difference between a resort golf course and what I've seen described as a standalone course? Well, the resort golf course is uh generally next to the resort, and you know, the main purpose is uh they keep help keep the hotel rooms full by attracting um golfers to stay at the resort as well as providing greenery. Um the standalone golf courses are the ones that were generally proposed for the Japanese market, where they would um buy memberships at fairly high fees, but they would also come as visitors and and stay here, but the golf course would be far removed from the from the resort. But even a resort golf course can, in fact, be a standalone. But the Wildly Country Club was originally developed at the standalone golf course um for um the Royal Hawaiian. And currently, the there's a golf course in Eva that supports the Prince Hotel in Waikiki.

[00:17:35] Marcia Sakai: I wanted to uh clarify something, Bruce. Uh you mentioned that a standalone golf course here at least was intended primarily for Japanese uh play. Uh couldn't you have standalone golf courses that that are generally open to the public as well and maybe just end up being open to Japanese play, or or are you thinking of the exclusive membership course as being equal to the standalone course?

[00:18:02] Bruce Plasch: You're right. There are some standalone golf courses that are for exclusively local play and there have been around some around for a long time. But certainly [unintelligible — audio glitch] big dollar courses that get proposed, I think, are the ones that are going to be private, where the public is going to be excluded. One one has pictures of this fenced off golf course with Dickens-like characters looking longing longingly through holes in the in the fence. Um is access an issue here? Is is the community a bit opposed to golf courses because they feel there's something wrong with the public not being able to cross that land after it's been turned into a golf course?

[00:18:59] Marcia Sakai: I think access is a very plays a very important role in a residence opinion about uh golf course development. Residents are very strongly opposed to uh golf courses that are designed for exclusive membership. And I think that where the exclusive membership also ends up being foreign membership, it makes it worse.

[00:19:22] Bruce Plasch: I agree. And as and as a result, most of the ones that do get approved do have some component of public play.

[00:19:30] Randall Roth: Is that a political gesture on the part of the developer, or is there some other reason why they would allow the public to play on the private course?

[00:19:39] Bruce Plasch: It's probably more um it's probably done primarily to get the approval, but there are uh a lot of uh local golfers um from my understanding that tend to take the earlier tee times than the the visitors. So that there there's a way to allocate them, allocate the the times so that you can accommodate both. So I think it's more for getting the approvals. Agriculture, especially the pineapple companies on the neighbor islands but not Oahu, and also the sugar companies, and since the late 60s, the numbers are, it's approaching 170,000 acres of land freed from plantation agriculture and that's a really enormous amount of land.

[00:19:26] Randall Roth: The image that that you guys wrote about that really struck me was that you could take a strip of land as wide as two football fields, and it would run from here to San Francisco, and that's approximately how much land has gone out of agricultural production since the late 60s.

[00:19:43] Bruce Plasch: That's right, or you could take a strip of land with the one football field and go all the way to New York.

[00:19:49] Randall Roth: That's some contraction, that's some contraction, isn't it?

[00:19:53] Bruce Plasch: Yeah, there's really a lot of land that's been freed from plantation agriculture and it's going to be very difficult to figure out what to do with all that land and you could go on a golf course building, you know, you know, start developing golf courses to your heart's content, and you only use up maybe at most, 2-3% of that land. In addition to that, there's, in the agricultural district, most people think it includes the land that's good for agriculture, and it's not really true, it's really a leftover district and there's about a million acres of land in the agricultural district that's not really suited for cultivating crops. And the best example of that is when you get in the West Hawaii, and you have all this lava land and with very low rainfall and it's just not good agriculture land.

[00:20:40] Bruce Plasch: Yet they do build golf courses there by trucking some soil over from the the mountains of dirt that sugar mills accumulate from washing the mud off cane, and they distribute [unintelligible — audio glitch] dirt on some of the lava and use the treated wastewater from the resorts and brackish water and develop golf courses there. It's on agricultural land, but absolutely no impact on farming.

[00:21:19] Randall Roth: So I guess it goes back to what you were saying before that if we're smart about where we locate these things, it's a win-win arrangement as opposed to elbowing out agricultural use or or anything else.

[00:21:30] Bruce Plasch: That's right.

[00:21:31] Randall Roth: Marsha, if we've got a whole bunch of land that's been freed up already and one certainly doesn't hope, but expects there will be more land freed up in the future, if we're not going to produce endless golf courses uh, from from I was going to say tea to green but uh, from wall to wall, what are we going to do with that land?

[00:21:54] Marcia Sakai: That's a good question, Randy. That's a question actually that um our folks on the big island have been struggling with, with the uh, the Hamakua sugar situation. There are a lot of acres there, I don't know exactly how many, that uh, will probably go out of sugar production when, you know, production does finally cease. Uh, there's, there's been uh, some talk of golf course development in that area, but I believe the area could only support one, even as a, a visitor type course.

[00:22:27] Bruce Plasch: Plus it rains a lot over there.

[00:22:28] Marcia Sakai: It rains a lot. Uh, people talk about diversified agriculture as being a potential use for those lands, but it uh, in the absence of a large, alternative plantation crop to sugar, I really don't see uh, at least in the near future being able to use up all of that land in agricultural use.

[00:22:51] Randall Roth: Bruce, surely it won't just sit there, will it?

[00:22:54] Bruce Plasch: Most of it will probably end up being used for grazing.

[00:22:57] Randall Roth: For grazing, is that because that's a, a particularly productive activity?

[00:23:02] Bruce Plasch: No, it's not a very productive activity, but it's an agricultural use that maintains a favorable tax treatment for for the land owner.

[00:23:11] Randall Roth: Finally, something I know a little something about. Tell the uh listener what you mean by favorable tax treatment.

[00:23:17] Bruce Plasch: The land that is used in agriculture is uh, assessed according to it the agricultural value of the land and not the market value of the land. So that it's assessed at a much lower rate and therefore the property taxes are much lower. So that if you cannot find a productive agricultural use, it it does make sense to put the land in a in a grazing operation, and also uh the it helps uh manage the land in terms of keeping weeds under control.

[00:23:48] Randall Roth: So even if the expenses of grazing are greater than the income generated by grazing, it can be the smartest thing to do given the options.

[00:23:57] Bruce Plasch: That's correct.

[00:23:58] Randall Roth: Well, Marsha.

[00:24:00] Marcia Sakai: I have a question for Bruce. What happens if a land owner uh does not even graze the land and just leaves it empty? Does it revert back to a market valuation type? That's my understanding, yes.

[00:24:14] Randall Roth: So grazing better than just letting it sit there.

[00:24:17] Bruce Plasch: Yes, for tax purposes.

[00:24:19] Randall Roth: Are are we going to be eating a lot more beef in the the future, Bruce?

[00:24:24] Bruce Plasch: Well, most of the uh, calves now are sent to the mainland.

[00:24:31] Randall Roth: So even though it's more expensive to uh feed them over here than on the mainland and you've got the added cost of shipping them to the mainland, that makes more sense than letting the the land just sit there.

[00:24:41] Bruce Plasch: That's right.

[00:24:42] Randall Roth: Golf courses are looking better at this point in the conversation. Um, tourism in general, uh, is this um, it's a big topic obviously, but is this something that you're optimistic about uh or not? You've each got about 25 seconds to tell us uh the future of tourism, as you see it in Hawaii, Bruce.

[00:25:07] Bruce Plasch: Um, well in the short term, you have to be very worried but in the long term, um, when the Japanese economy recovers and and on the mainland, the especially the California economy recover, I would expect and certainly hope that there would be a recovery. So the question is how long will it take for the Japanese economy and the California economy to recover.

[00:25:30] Randall Roth: Marsha, you've only got 13 seconds, do your best.

[00:25:33] Marcia Sakai: All right. Uh, tourism is here to stay is one of the things that we do best. Uh however, we cannot be complacent that tourists will always come here. There's a lot of competition out there, and I and we have to make sure that the product that we sell is of quality.

[00:26:11] Randall Roth: This program is produced by the Consortium of Price of Paradise authors in cooperation with Hawaii Public Radio. The Price of Paradise is of interest for every concerned citizen of Hawaii. It is available in local bookstores and in public libraries. Please tune in next week when Randall Roth, one of his 37 co-authors and a special guest will take on another question of importance to listeners in Hawaii. Cassette copies of this program are available from Hawaii Public Radio for $10 by calling 955-8821.

[Note: music outro ~470 s after final sign-off at 00:26:34]