If You Build It, They Will Golf
How Mike Keiser created “Dream Golf” at Bandon Dunes
by Bill Gallagher

Okay, let’s play a word-association game. When you hear “golf” and “Oregon” together what comes to mind?

Peter Jacobsen? Tiger Woods at Pumpkin Ridge? Hogan winning the PGA at Portland Golf Club?

How about Bandon Dunes?

In the world of golf, Bandon Dunes is huge. The buzz is nothing but positive. Golf writers find adjectives inadequate to capture the experience of staying and playing at Bandon Dunes. Those who’ve got the time and the money to play tend to describe the experience as mystical.

Who knew back in 1999?

The men who built Bandon Dunes came up with a wager before the first 18-hole course opened along the Pacific Ocean. The question was, “How many rounds of golf would be played on the course in the first year?” Consensus was somewhere around 9,000. Reality turned out to be upwards of 22,000 rounds. It’s estimated unofficially that 40,000 rounds will be played this year at just one of the three courses, Bandon Trails, which is the newest course. There’s also an estimate going around that in 2004 the Bandon Dunes Resort took in $25 million from golf, accommodations and dining. Another reliable estimate puts sales at $35 million in 2005.

There wouldn’t be a Bandon Dunes were it not for the expansive vision, enlightened management style and deep pockets of one man: Mike Keiser. This self-made, middle America, multi-millionaire founded a greeting card company in Chicago in the early 1970s called Recycled Paper Greetings. If you’ve ever browsed the greeting card section at the local supermarket, you’ve probably seen his product. Hallmark it’s not. But in market share in the greeting card industry, his company claims the number three position. Annual sales exceed $100 million.

How Mike Keiser took his hard-earned fortune and financed Bandon Dunes is a story very well told in a new book, “Dream Golf: The Making of Bandon Dunes,” by Stephen Goodwin. Keiser was, in his words, “leery” of having a book written about his golf courses and resort but agreed to cooperate with the understanding that the book would not be just about him. He’s that kind of guy. Inevitably though, “Dream Golf” places Keiser right where he belongs—first among equals in bringing the old school golf vision of Bandon Dunes to life.

From his Chicago office, Keiser spoke with us one morning in mid-June about the book, his dreams and his vision for Bandon Dunes. “We didn’t know if anyone would come,” he says.

That’s got to be the understatement of the last decade. Keiser and the men who created Bandon Dunes were ready to welcome the public but weren’t sure the public would welcome them, or their work.

“I did it without any expectation that many people would come. Maybe a few hard- boiled, avid golfers.”

Turns out there are a lot more “hard-boiled, avid golfers” out there than Keiser or the golf course construction consultants counted on.

From the very beginning of his quest to build better golf courses, Keiser has known what he wanted. “My business thesis is that if you build national golf links and make it public, enough people will come to break even, at least. Now that we’ve seen Bandon succeed, I would amend my thesis to say if you build national golf links and make it public—even if it’s five hours from Portland—it will be a great success.”

If you describe Bandon Dunes to someone who hasn’t heard of it, that person is likely to assume it must be a private golf course and resort. Otherwise, who could afford to develop such a project without the up-front money available from investors or members in private golf enterprises?

Well, that’s the beauty of Bandon Dunes. Anyone who’s got enough money can play one of the three courses. Greens fees at Bandon Dunes, Pacific Dunes and Bandon Trails range from $75, November through April, to $240, May through October.

Why public?

Great public courses are one of the strengths of Irish and Scottish golf. One of the flaws of American golf, says Keiser, is that most people can’t play the best golf courses of their sport. “I’m not saying it’s unjust; I’m saying it’s a flaw in American golf.”

And members of the golf press, who can make or break a new course the way a restaurant critic can kiss or kill the latest eatery, love public courses, according to Keiser.

“Writers are dying for more public courses like ours. Anything that’s public, they love.”

Makes sense when you think about it. When golf writers review private courses, they’re writing about courses that 99 percent-plus of their readers can never set foot on, much less play.

But to build Bandon Dunes as a public course took money. Lots of money. Mike Keiser’s own money. Not other golfers’ money. And not Mike Keiser’s credit either. He paid cash all the way through. “It makes it so much easier that way,” he says. “It’s also true that no one would have lent a dime on this project. I really had no choice.”

Did he ever consider borrowing money to build Bandon Dunes?

“No. I knew they would say no. Just as I knew a market research study would say, ‘idiotic idea.’ So I didn’t invest in one of those.”

In “Dream Golf,” author Stephen Goodwin writes in detail about how the deal went down when Keiser bought the land for Bandon Dunes. The short version is that the seller was so fed up with Oregon’s land use restrictions that he was ready to take a loss on the land. Thus, Keiser got 1,215 acres with a mile of the land right on the Pacific Ocean for $2.4 million. Goodwin writes, “That came to slightly less than $2,000 an acre. In hindsight, it had to be one of the best land deals since that Dutchman, Peter Minuit, purchased the island of Manhattan from the Indians for $26 and a bottle of booze.”

But this transaction raises the question of how Keiser and his team were able to negotiate through those same land use restrictions while previous landowners and so many others had failed. The key was team member Howard McKee, an insider in Oregon when it comes to land use policy. McKee made a believer of out of Keiser who figured his project had a one in three chance of getting all the required permits from state and local governments. Keiser gives generous credit to McKee and admits that without his handling of the bureaucrats there probably wouldn’t be a Bandon Dunes.

And what does Keiser, who is somewhat conservative in his politics, think of Oregon’s land use laws?

“The regulations prove to me that Oregon can’t decide. I think of Oregon as a 50/50 state. Oregon can’t decide whether it wants growth or not, and the land use laws make that pretty clear. Fifty percent do not want growth and 50 percent do want growth.”

What does he think of Tom McCall’s ethos on the subject, the “visit but don’t stay” greeting to visitors?

“I think it’s appropriate if the people of Oregon want to keep it the way it’s always been. I’m in Bandon. That’s sort of the red part of the state...they want to grow there. They’re tired of stagnating. Then you’ve got the blue state part of Oregon, which Howard (McKee) represents. They want measured growth.

“Oregon is the only state I know of that as a state has said, ‘We’re not sure we want you here.’ That’s a strange statement to people with capital or people who want to build something in Oregon. So, by and large, I think they tend to go to Washington.”

What, then, would be his advice to the governor and the legislature? “Ahead of land use laws, I would say eliminate or significantly reduce the income tax rate in Oregon or you’ll continue to lose business owners, and I am one who would love to consider moving to Oregon. But with Washington State at zero, Nevada at zero, Idaho low and Wyoming at zero, Oregon is uncompetitive with those states.”

Is he somewhat grateful for land use laws that kept the Bandon Dunes land from being developed until he came along?

“Grateful? In some ways. Now that I’m through them. But getting through them took three and a half years and lots of money.”

Looking back on the seven years it’s taken to create one of the premier golf resorts in America, Keiser couldn’t think of very many essential elements that didn’t fall into place along the Southern Oregon coast. The weather turns out to be better than expected. “More like California than the Willamette Valley.”

An army of 450 caddies has been recruited to make the strict “No Carts” rule palatable to players. The architecture of the courses and the buildings worked out. And the employees have been, in his words, “unbelievably great.”

“I can’t tell you why,” says Keiser. “They’re authentic. They’re friendly. They’re sincere. They are happy to be here, happy to be at work. I get more compliments about the people than about the golf course. Honestly.”

Author Goodwin says Keiser’s style should be studied and appreciated. “He gets brilliant work from people,” says Goodwin. “This is for the business readers to understand. Mike has a way of making you believe in a project and then making you believe it can’t happen unless you do your part. He respects people and he listens to them.”

He definitely listened to his own instincts as he envisioned and then founded Bandon Dunes. The Kemper Management Group had done some work for him on the prospect for building a golf resort on the Southern Oregon coast. A 20-page booklet on the subject describes Keiser’s mission, “...to develop outstanding golf properties on Keiser-owned land in Southern Oregon by the year 2000 that provide an ROI (return on investment) at least equal to prime rate based on allocated net cost of land, holding costs and investment in golf assets.”

The booklet lists reasons why Bandon Dunes was a bad idea that ranged from “No permanent base of golfers,” to “Perception of weather a negative,” to “Area not well known nationally.”

Keiser spent little time dwelling on the downside. Instead, he set his objective, “...walking only, middle of nowhere, classic course,” and just built it. Keep it simple, and they will come. Anyone who has played one of the three courses at Bandon Dunes will want to read “Dream Golf.” Goodwin is a novelist-turned-golf-writer who does a solid job retelling the story of the creation of Bandon Dunes. Though the book wasn’t supposed to be all about Mike Keiser, how could it not be? His is a hell of a story. That he stuck to his own instincts on a project of this size rather than defer to consultants with comprehensive market studies is, by itself, enough of an economic anomaly these days to justify reading “Dream Golf.”

Goodwin loves the courses. So this is not a “warts and all” treatment of Bandon Dunes and the men who made it happen. Were one to go looking for warts, one might raise the question of whether the greens fees and room rates have gone too high too soon. One might also point out that while Bandon Dunes is a public course, you’d be hard-pressed to see much difference between the clientele there and at the local country club.

But that would be quibbling with what will stand as a major Oregon story for decades to come. And the final chapters haven’t been written yet. Keiser says, “I’m satisfied now. But there’s still room at the resort for two more courses. So I will not be adding too many more rooms because I don’t want it to get too big. But with two sites for golf I just won’t be able to help myself.”

Bill Gallagher is the News Director of AM 860 KPAM – The Talk Station and the movie reviewer for BrainstormNW. As for his golf game, he won’t book a weekend at Bandon Dunes until he breaks 100, which should give him plenty of time to save for the greens fees and accommodations.

BrainstormNW - July 2006

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