It is because of its perceived importance to the tourist industry that golf has become a serious player in state economic circles. The same UofA survey reported that tourists are responsible for about half the play at Arizona courses during the winter months, and about a third of play during the spring and fall. Nonresidents play less than one-sixth of the state's golf in the summer.

The University of Arizona study examined only the immediate, local impact of golf-course operations; no attempt was made to gauge the amount of money visitors spent away from courses. In fact, no scientific study seems to have been done to determine how much money golf brings into the state that would not have come anyway--or where that money goes once it leaves tourists' pockets.

The Arizona study found about $225 million in expenditures directly related to golf. Whether that money turns over more than four times--so it has the $1 billion impact the golf association claims--is entirely an open question.

Arizona's civic and political leaders seem to harbor few doubts about the value of golf, however, and they have rolled out the red carpet for course developers. In one especially hospitable move, the 1994 Arizona Legislature handed golf-course owners a break worth tens of millions of dollars per year--straight out of the tax coffers of local governments.

For years, Arizona golf courses were assessed property taxes in the same manner as other businesses. An appraiser from the county valued the land the course was built upon and any improvements made to it (such as a clubhouse or a lake). The course owner paid a tax based on that value.

After the law was changed last year, however, that process is no longer used. Now, land used on a golf course is valued at a hard-and-fast $500 an acre--regardless of its market worth. The value of any improvement is determined by calculating what the Legislature calls its level of "obsolescence."

The spectacular Grayhawk Golf Club, on Pima Road north of Frank Lloyd Wright Boulevard, is a good example of how much less good land can be worth--after it has been moved around and improved upon.

What was once a more-or-less flat piece of parched land has been transformed into a Disney desert masterpiece. Acre after acre of lush green grass stretches out from the first tee, bobbing and weaving its way through cactuses, ocotillo bushes and mesquite trees, rushing up to the edges of yawning bunkers and shimmering water hazards. Typically, 750,000 cubic yards of earth must be moved to build an 18-hole golf course. The dirt is used to create bunkers, elevated tees and greens and other geographic features of the links. At Grayhawk, however, workers moved two million cubic yards of dirt--enough to fill America West Arena to the top, three times--and used it to spectacular effect. They created a canyon, hollowed out space for an artificial lake and the island green that appears to float in its center, and built the steeply graded banks and ridges that make the courses so challenging.

The 173-acre expanse of north Scottsdale desert that Grayhawk occupies was originally valued by the county at $4.3 million, or about $25,000 per acre. As soon as the land became part of a golf course, however, its assessed value dropped, by law, to $500 per acre--a 98 percent reduction.

The county tax rolls instantly lost $4.2 million in taxable property, or nearly $50,000 in annual tax collections.

The county also lost taxable value when the course was built. The usual improvements--cart paths, bridges, the clubhouse--were made. In years past, all of this construction would have increased the golf club's assessed value and, therefore, the property-tax bill its owners would have paid.

Now, though, the Arizona Department of Revenue instructs county assessors to evaluate each course relative to other courses in the state, and assign a "per-hole" value to it--the key number in a complicated formula that determines a golf course's final tax bill.

Grayhawk, as a high-value course, is assessed at a maximum of $58,000 per hole. By that standard, the total value would add up to a little over $1 million--less than a fourth of what the raw land was worth before it became a golf course. But there's still one more accounting trick the law allows golf courses. Each course is allowed an "obsolescence" rate, based on the difference between how many people play there during busy and slow months.

In the case of Grayhawk, which through the year is only played at 70 percent of its optimum capacity, the automatic tax write-off was 30 percent of its total assessed value.

In other words, the course's owners began with a piece of land that was worth $4.3 million. By turning it into a golf course, they immediately reduced the taxable value of the land to about $1 million. Putting millions of dollars' worth of improvements on it--moving literally a mountain of dirt, building lakes, roads, bridges and a clubhouse--did not do much to increase the value on which the owners pay taxes; after the per-hole assessment is factored in, the improvements were judged to be worth only about $1 million. Then, the 30 percent obsolescence factor was subtracted from the overall assessment.

« Previous Page
Next Page »
My Voice Nation Help
Phoenix Concert Tickets