Golf Can Reduce Italy's 1.52 Trillion Euro Debt, Developers Say
Luca Valerio
Fred Downes via Bloomberg
Luca Valerio, Golf Parco di Roma Resort president. Valerio says that golf is a social event for Italians.
Luca Valerio, Golf Parco di Roma Resort president. Valerio says that golf is a social event for Italians. Photographer: Fred Downes via Bloomberg
Terre Dei Consoli Golf Club
Robert Trent Jones II, LLC via Bloomberg
An artist's rendering of the Terre Dei Consoli Golf Club. The design includes a 27-hole golf residential resort, with an 18-hole championship par-72 course.
An artist's rendering of the Terre Dei Consoli Golf Club. The design includes a 27-hole golf residential resort, with an 18-hole championship par-72 course. Source: Robert Trent Jones II, LLC via Bloomberg
Edoardo Caltagiorne, Gruppo Leonardo Caltagirone operations director. Caltagiorne says golf is a path to fiscal salvation. Photographer: Fred Downes via Bloomberg
Leonardo Caltagirone, having studied Italy’s plan to slice 21.1 billion euros ($27.6 billion) in spending to bring its budget deficit below 3 percent of GDP by 2012, says golf is a path to fiscal salvation.
“Always look 10 years down the road,” says Caltagirone, chairman of the construction and property company Gruppo Leonardo Caltagirone in Rome. “Always invest in the future, never the present.”
Sipping an icy drink on a sun-blistered terrace overlooking the Forum Magnum, the 63-year-old real-estate magnate points northwest, beyond the Capitoline Hill toward the 130 hectare field where the legions of ancient Rome camped before marching victorious into the city.
“Terre dei Consoli is such an investment,” Caltagirone says of the 200 million euros he’s spending to build a 27-hole residential golf resort in the midst of a two-year recession that has lumbered Italy with debt totaling 1.52 trillion euros at the end of 2009, according to Eurostat. “It will be one of the greatest golf courses in the world.”
At a colossal 7,700 yards, Caltagirone’s par-72 Terre dei Consoli 18-hole championship course, designed by master architect Robert Trent Jones Jr., is what golfers call a “long poke” reach. The folks at KPMG International reckon it’s also a tricky economic stretch.
Italy only has 92,000 golfers on its own turf, as compared with 387,000 in France, almost 2 million in the U.K. and more than 37 million in the U.S., according to a 2010 KPMG analysis of the European golf-property market. Perhaps more problematic for Terre dei Consoli, the KPMG report says that Italy isn’t a country the world’s 61 million golfers associate with the game.
‘Social Event’
Luca Valerio shrugs off the naysaying numbers. He’s the 64-year-old president of Golf Parco di Roma resort and golf- industry consultant to Italian Prime Minister Silvio Berlusconi. “Golf is a social event for Italians,” Valerio says over a twilight Campari-and-tonic in the Parco di Roma clubhouse. “We need to make it a sport, as well as understand that golf’s future is tied to real estate.”
Valerio says there are fewer than 70 Italian courses that approach the championship caliber that interests international golf travelers, home buyers, corporate sponsors and professional tournaments. “Italy was once the world’s No. 1 tourist destination,” Valerio laments. “New courses like Terre dei Consoli will help us regain the title.”
Lazy Ancestor
Italy’s first course, Acquasanta, was built south of Rome in 1903. It’s a lazy 6,381-yard affair set along the Appian Way and it wasn’t designed by property speculators encircling fairways with vacation and retirement homes.
“Italian developers don’t have a good reputation,” says Caltagirone’s Operations Director Edoardo Caltagirone, the company’s 34-year-old senior executive charged with bringing Terre dei Consoli to reality by 2012.
“But we are not ‘palazzinari’,” the 16-handicap Caltagirone adds, employing the word Italians use to describe the country’s quick-buck property hustlers. “Golf has the potential to be the fastest growth sport in Italy. We have the weather and the food, everything needed to attract golfers, except great courses.”
And the streamlined civil service essential to stamping the cartloads of official permits Caltagirone says are necessary to build them in a nation celebrated for its rasping red tape.
“The government is committed to speed up the bureaucracy that puts the construction of golf courses in motion,” Italian Minister of Sport Rocco Crimi says in an interview. “Golf will absolutely attract tourists and help relieve unemployment.”
Luxury Retreat
Caltagirone says Terre dei Consoli is a vanguard effort to cultivate Italian jobs and golfers. About 40 kilometers outside Rome, the project calls for six pods of 500 villas, a 120-room hotel and a dedicated luxury golf lodge that can host 60 guests. House prices range from 240,000 euros to 500,000 euros and are primarily aimed at Italian home buyers and northern Europeans seeking a warm winter-golf hideaway.
Yet the KPMG report warns that sunny Spain’s 100 residential golf courses are “currently experiencing the negative effects of oversupply in the market.” At the same time, the mild climate on a 15-kilometer strip along Turkey’s Antalya peninsula has sparked the construction of 17 golf courses positioned to lure Europeans. Even with Greece’s growing debt of 273 billion euros, developers there are constructing 14 championship courses.
Caltagirone says Italy’s dearth of golf courses, which cost a minimum 1.5 million euros annually in maintenance fees, allows him to create a golf economy from scratch that’s balanced on sensible projects.
‘Great Craziness’
“Italy is a strange country,” Caltagirone says. “We have points of great excellence and points of great craziness. For me, it’s a beautiful life to build golf courses and revitalize the economy.”
As for Crimi’s shot at hastening the pace, the KPMG report says the government has toughened building restrictions. The sports minister promises that will change. “The Italian golf industry must move faster, build more courses,” Crimi says. “The more the better.”
To contact the writer on the story: A. Craig Copetas in Rome at ccopetas@bloomberg.net.
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