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Can man-made Crystal Lagoons wedge vacationers away from golf courses? This guy thinks so

Nov 01, 2016 (0) comment , , , , , ,

It’s a tough image to resist.

Acres of Caribbean blue water lined by broad promenades and luxe cabanas. White sand beaches — some serving as launches for swimmers and kayakers, and some designed for relaxing with a fruity cocktail — slope into a sparkling sea.

But can you picture all that plunked down in Texas, a state where most of the lakes are man-made?

Executives of Crystal Lagoons, the company building a showpiece eight-acre water feature at the planned $1 billion Bayside development on Lake Ray Hubbard, say it’s not just possible, it’s the future.

“You have a great opportunity to provide beach life to people in driving distance from their homes,” said Uri Man, the U.S. CEO of  Crystal Lagoons, which was founded in Chile.

Miami-based Man, who was in Dallas for this week’s Urban Land Institute fall meetings, said the company’s man-made tropical oases could edge out golf courses as the central attractions for big, master-planned communities.

And Texas, with its growing (mostly landlocked) economy, is ripe for the shift.

“We cost a lot less to build than a golf course. We cost a tiny fraction of what a golf course costs to maintain and we provide an amenity for the whole family,” he said. “There’s every reason to believe that crystal lagoons will replace golf courses as the amenity that drives real estate development.”

The company claims its proprietary technology allows Crystal Lagoons to use 30 times less water annually than a typical 18-hole golf course, one percent of the chemicals that would be used in a swimming pool and as little as a fiftieth of the energy of a “conventional filtration system.”

Hundreds of sensors monitor water quality in a lagoon, which lets the filtration systems more precisely target where its disinfection pulses are needed — therefore, Man explained, not all the water needs to cycle through the lagoon.

And unlike a golf course, Man said the lagoon can use salt, fresh or brackish water.

Nevertheless, that technology is relatively untested stateside.

Crystal Lagoons, founded in 2008, has about 400 projects in “different stages of development” around the world, but Man wouldn’t say how many are actually done.

A company spokeswoman emailed photographs of 10 lagoons that she said are operational. Its first “showcase” lagoon in North America recently opened in Cabo San Lucas.

As Crystal Lagoons makes a push into the U.S., Man highlighted a deal with Las Vegas resort and casino magnate Steve Wynn to build a 38-acre crystal lagoon near his resort on the strip, but it’s far from done.

A lagoon is under construction in the Tampa Bay, Florida, area, and is slated to be done next year.

For decades, though, golf courses have been the main attraction of high-end communities.

James Gaines, chief economist at Texas A&M University’s Real Estate Center, said that trend dates back to the 1970s and 1980s, when Baby Boomers flocked to suburbs and land was more plentiful.

Plus, Gaines said, “developers tended to be golfers, so they assumed everybody else was.”

Big name professional golfers, such as Jack Nicklaus and Arnold Palmer, got into the course design business, lending their names and cachet to the links.

“It was a status symbol to have your signature golf course in there,” Gaines said. “Then you had the country club and the whole bit.”

Developers also learned they could turn land that might be otherwise unusable — land that’s in a floodplain, for instance — into extra cash because they could charge a premium for lots with golf course views.

But eventually, Gaines said, the drawbacks of building so-called golf communities began to outweigh the potential profits.

An 18-hole course requires somewhere between 140 and 200 acres, he said, and land has gotten a lot more expensive since even the 1990s.

The number of golfers in the U.S. also has fallen from about 30 million in 2003 to 24.1 million this year, while the typical golfer has gotten richer.

In 2015, the most recent year available, the median household income among golfers was $96,236 — almost double the national rate of $55,775, said J.J. Keegan, a strategist and golf course industry expert.

Keegan said there are 15,204 golf courses in the U.S., about 20 percent of which anchor either a residential development or a resort.

As a result, Keegan said astute golf club operators, including Dallas-based ClubCorp, have been trying to attract a broader range of customers through a variety of activities that aren’t golf. A major part of that strategy has been investing in fancy pools or other water amenities.

“That appeals to a far wider demographic,” he said. “Only 8.6 percent of Americans play golf. We can all sit by a pool and have some Mai Tais.”

Enter Crystal Lagoons.

Kent Donahue, the developer heading the massive Bayside project in Rowlett, said he’s convinced.

“We needed to generate dirt on the south side (of the development) and we looked at canals and other things as well, to create amenities,” he said. “We vetted it for over a year.”

And he’s convinced that having the first such Crystal Lagoon in the state will help set the mixed-use lakeside community — slated to include hundreds of houses, thousands of luxury apartments, a 500-room resort and 1,000-slip marina — apart in a crowded North Texas market.

“It’s going to be a must-see when you come to Texas,” he said.

A golf course, Donahue said, was never on the table: A lagoon view will command similar real estate premiums to a golf course lot, but he’s betting that the chance to feel sand underfoot will be more alluring to Texans looking for a summer day trip.

Donahue said the lagoon, a 300-foot long show fountain and Las Vegas-style poolside areas will be programmed by California-based Lifescapes International. He said developers expect to spend about $30 million on the lagoon and surrounding areas.

It’s expected to be open by spring 2018.

This article was originally written by Jill Gowen and appeared here.

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