It was reported this week in Crain’s Cleveland Business that the Blue Heron Golf Club in Medina County is for sale.  The golf course, only four years old and ranked in 2006 as one of the best new courses in the country, is surrounded by a residential development consisting of more than 400 home sites. 

 According to Crain’s, the broker for Blue Heron does not believe the fact that the course is on the market will negatively impact the sale of lots in the surrounding development.  He is most likely correct.  The general state of the economy is doing that job just fine on its own, thank you very much. 

Residential developers and new home builders have been two players in the market hit hardest by the current credit crisis and rising unemployment. 

 Data just released today (April 16) by the U.S. Census Bureau and HUD estimates single family building permits issued nationally in March 2009 were down 7.4% from the revised February figures, and down 42% from one year ago.  Estimates for February had been up slightly over those for January 2009.

 While March housing starts are estimated to be unchanged from those in February 2009, they were down a whopping 49.6% from March 2008 national levels.  Total single family units under construction, both nationally and in the Midwest, have declined each of the last 12 months.

 While sale rumors – – now confirmed – – may not have hurt new home sales in the adjoining subdivisions, the sale of the Blue Heron course cannot help unless the sale is to another operator intent on maintaining the property as a golf facility.  That issue can turn on what is or is not required by title covenants, documents which are often ignored by home buyers.

Park use is one alternative which could complement neighboring residential development.  The 2007 sale of Orchard Hills Golf Course to the Geauga Park District is a prime example of a golf course being converted to a use that successfully preserves the green spaces and recreational aspects of the property.  

But the contraction in golf course play (2.2% fewer rounds played and 4.1% less days open in Ohio in 2008 compared to 2007) coupled with the likely lack of buyers willing to commit to long-term development restrictions – – unless bound to do so – – leaves open the possibility of other uses. Other Northeast Ohio courses have been sold for mixed-use or retail development in recent years. 

Even converting a course to additional residential development can raise the ire of people who thought they were buying into a golf course community. 

In the case of Schurenberg v. Butler Cty. Bd. of Elections, 78 Ohio App.3d 773 (1992), the owners of homes in a golf course community sought to enjoin the developer from selling the course for further residential use.  They lost.  The court held that because the developer had not recorded any restrictions requiring the property to be maintained as a golf course he was free to sell it for other uses.    

 There is no indication that Blue Heron will not continue as a golf course, but holdings like the one in the Schurenberg case will drive existing home owners – – if not to drink – – then to dig out their title policies and reread applicable use restrictions.  That court’s “beat down” on existing lot owners brings to mind the closing line of the popular golf-themed E*Trade commercial: “Why don’t you try reading the rules, shankapotomus.”