Touchstone beefs up with muni deals

Touchstone Golf has gotten off to a fast start in 2018, with acquisitions that may signal the direction of its immediate future.

Touchstone, ranked by Golf Inc. as the world’s 17th-largest management company, began the new year by adding a pair of municipal properties to its portfolio: Lady Bird Johnson Municipal Golf Course in Fredericksburg, Texas and Blue Rock Springs Golf Course in Vallejo, Calif. They are the 11th and 12th municipal venues that Touchstone now operates and Steve Harker, the company’s president, thinks there’s more where they came from.

“We’ve seen a dramatic increase in the number of municipalities looking for professional management,” said Harker, who began his career in golf with American Golf Corp. “There are numerous opportunities for companies like ours, and I see this trend continuing for three or four years.”

Of course, Harker has never put all of his eggs into a single basket. Touchstone is a full-service firm that operates 37 private, daily-fee and municipal properties (a total of 41.5 18-hole equivalent courses), eight of them via leases. All but two of its properties are located west of the Mississippi River, the majority of them in California (17) and Texas (nine).

What the properties have in common is the financial condition they were in when Harker signed them. Since it was established, in 2005, Touchstone has sought out under-performers.

“Touchstone was built on turnaround assignments,” said Harker, who described himself as “the turnaround guy” during his time at American Golf. “We’re the folks you call when your property isn’t doing well. It’s a skill-set that’s paid great dividends for us, because nowadays most courses need help.”

Touchstone typically competes against KemperSports, Billy Casper Golf and several small and mid-sized regional companies, among them CourseCo and JC Resorts. Like its rivals, it offers a full slate of management services that it customizes to address a client’s needs, combining what it calls “state-of-the-art technologies” with “good old-fashioned ingenuity” to create a “win-win environment.”

What differentiates Touchstone, Harker said, is the emphasis it puts on marketing strategies that are tailored to the spirit of the times. Harker believes that the key to success in today’s golf economy is “community engagement,” so his properties reach out to golfers and non-golfers alike, and they promote their programming with all the social media at their disposal.

“Courses need to be the center of their communities not just for golf but also for dining and social events,” Harker said. “You have to invite people to come to your course. You have to create events for them. You have to create an environment that makes people want to visit and spend their money.”

Over the near term, Harker intends to keep creating such environments in western states, preferably at courses that have never been professionally managed, as they offer the most potential upside. He’s comfortable with being primarily an operator, even if it means having to constantly restock Touchstone’s portfolio when contracts expire.

“Our goal is to grow by three or four properties a year, and we’re actually getting five or six,” he said. “We’ve been very fortunate.”

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