If You Build It, They Will Golf
How Mike Keiser created “Dream Golf” at Bandon Dunes
by Bill Gallagher
Okay, let’s play a word-association game. When you hear “golf” and “Oregon” together
what comes to mind?
Peter Jacobsen? Tiger Woods at Pumpkin Ridge? Hogan winning the PGA at Portland
How about Bandon Dunes?
In the world of golf, Bandon Dunes is huge. The buzz is nothing but positive. Golf
writers find adjectives inadequate to capture the experience of staying and playing at
Bandon Dunes. Those who’ve got the time and the money to play tend to describe the
experience as mystical.
Who knew back in 1999?
The men who built Bandon Dunes came up with a wager before the first 18-hole course
opened along the Pacific Ocean. The question was, “How many rounds of golf would be
played on the course in the first year?” Consensus was somewhere around 9,000. Reality
turned out to be upwards of 22,000 rounds. It’s estimated unofficially that 40,000 rounds
will be played this year at just one of the three courses, Bandon Trails, which is the
newest course. There’s also an estimate going around that in 2004 the Bandon Dunes
Resort took in $25 million from golf, accommodations and dining. Another reliable
estimate puts sales at $35 million in 2005.
There wouldn’t be a Bandon Dunes were it not for the expansive vision, enlightened
management style and deep pockets of one man: Mike Keiser. This self-made, middle
America, multi-millionaire founded a greeting card company in Chicago in the early
1970s called Recycled Paper Greetings. If you’ve ever browsed the greeting card section
at the local supermarket, you’ve probably seen his product. Hallmark it’s not. But in
market share in the greeting card industry, his company claims the number three position.
Annual sales exceed $100 million.
How Mike Keiser took his hard-earned fortune and financed Bandon Dunes is a story
very well told in a new book, “Dream Golf: The Making of Bandon Dunes,” by Stephen
Goodwin. Keiser was, in his words, “leery” of having a book written about his golf
courses and resort but agreed to cooperate with the understanding that the book would
not be just about him. He’s that kind of guy. Inevitably though, “Dream Golf” places
Keiser right where he belongs—first among equals in bringing the old school golf vision
of Bandon Dunes to life.
From his Chicago office, Keiser spoke with us one morning in mid-June about the book,
his dreams and his vision for Bandon Dunes.
“We didn’t know if anyone would come,” he says.
That’s got to be the understatement of the last decade. Keiser and the men who created
Bandon Dunes were ready to welcome the public but weren’t sure the public would
welcome them, or their work.
“I did it without any expectation that many people would come. Maybe a few hard-
boiled, avid golfers.”
Turns out there are a lot more “hard-boiled, avid golfers” out there than Keiser or the golf
course construction consultants counted on.
From the very beginning of his quest to build better golf courses, Keiser has known what
he wanted. “My business thesis is that if you build national golf links and make it public,
enough people will come to break even, at least. Now that we’ve seen Bandon succeed, I
would amend my thesis to say if you build national golf links and make it public—even if
it’s five hours from Portland—it will be a great success.”
If you describe Bandon Dunes to someone who hasn’t heard of it, that person is likely to
assume it must be a private golf course and resort. Otherwise, who could afford
to develop such a project without the up-front money available from investors or
members in private golf enterprises?
Well, that’s the beauty of Bandon Dunes. Anyone who’s got enough money can play one
of the three courses. Greens fees at Bandon Dunes, Pacific Dunes and Bandon Trails
range from $75, November through April, to $240, May through October.
Great public courses are one of the strengths of Irish and Scottish golf. One of the flaws
of American golf, says Keiser, is that most people can’t play the best golf courses of their
sport. “I’m not saying it’s unjust; I’m saying it’s a flaw in American golf.”
And members of the golf press, who can make or break a new course the way a
restaurant critic can kiss or kill the latest eatery, love public courses, according to Keiser.
“Writers are dying for more public courses like ours. Anything that’s public, they love.”
Makes sense when you think about it. When golf writers review private courses, they’re
writing about courses that 99 percent-plus of their readers can never set foot on, much
But to build Bandon Dunes as a public course took money. Lots of money. Mike Keiser’s
own money. Not other golfers’ money. And not Mike Keiser’s credit either. He paid cash
all the way through.
“It makes it so much easier that way,” he says. “It’s also true that no one would have lent
a dime on this project. I really had no choice.”
Did he ever consider borrowing money to build Bandon Dunes?
“No. I knew they would say no. Just as I knew a market research study would say,
‘idiotic idea.’ So I didn’t invest in one of those.”
In “Dream Golf,” author Stephen Goodwin writes in detail about how the deal went down
when Keiser bought the land for Bandon Dunes. The short version is that the seller was
so fed up with Oregon’s land use restrictions that he was ready to take a loss on the land.
Thus, Keiser got 1,215 acres with a mile of the land right on the Pacific Ocean for $2.4
million. Goodwin writes, “That came to slightly less than $2,000 an acre. In hindsight, it
had to be one of the best land deals since that Dutchman, Peter Minuit, purchased the
island of Manhattan from the Indians for $26 and a bottle of booze.”
But this transaction raises the question of how Keiser and his team were able to negotiate
through those same land use restrictions while previous landowners and so many others
had failed. The key was team member Howard McKee, an insider in Oregon when it
comes to land use policy. McKee made a believer of out of Keiser who figured his
project had a one in three chance of getting all the required permits from state and local
governments. Keiser gives generous credit to McKee and admits that without his
handling of the bureaucrats there probably wouldn’t be a Bandon Dunes.
And what does Keiser, who is somewhat conservative in his politics, think of Oregon’s
land use laws?
“The regulations prove to me that Oregon can’t decide. I think of Oregon as a 50/50 state.
Oregon can’t decide whether it wants growth or not, and the land use laws make that
pretty clear. Fifty percent do not want growth and 50 percent do want growth.”
What does he think of Tom McCall’s ethos on the subject, the “visit but don’t stay”
greeting to visitors?
“I think it’s appropriate if the people of Oregon want to keep it the way it’s always been.
I’m in Bandon. That’s sort of the red part of the state...they want to grow there. They’re
tired of stagnating. Then you’ve got the blue state part of Oregon, which Howard
(McKee) represents. They want measured growth.
“Oregon is the only state I know of that as a state has said, ‘We’re not sure we want you
here.’ That’s a strange statement to people with capital or people who want to build
something in Oregon. So, by and large, I think they tend to go to Washington.”
What, then, would be his advice to the governor and the legislature?
“Ahead of land use laws, I would say eliminate or significantly reduce the income tax
rate in Oregon or you’ll continue to lose business owners, and I am one who would love
to consider moving to Oregon. But with Washington State at zero, Nevada at zero, Idaho
low and Wyoming at zero, Oregon is uncompetitive with those states.”
Is he somewhat grateful for land use laws that kept the Bandon Dunes land from being
developed until he came along?
“Grateful? In some ways. Now that I’m through them. But getting through them took
three and a half years and lots of money.”
Looking back on the seven years it’s taken to create one of the premier golf resorts in
America, Keiser couldn’t think of very many essential elements that didn’t fall into place
along the Southern Oregon coast. The weather turns out to be better than expected. “More
like California than the Willamette Valley.”
An army of 450 caddies has been recruited to make the strict “No Carts” rule palatable to
players. The architecture of the courses and the buildings worked out. And the employees
have been, in his words, “unbelievably great.”
“I can’t tell you why,” says Keiser. “They’re authentic. They’re friendly. They’re sincere.
They are happy to be here, happy to be at work. I get more compliments about the people
than about the golf course. Honestly.”
Author Goodwin says Keiser’s style should be studied and appreciated. “He gets brilliant
work from people,” says Goodwin. “This is for the business readers to understand. Mike
has a way of making you believe in a project and then making you believe it can’t happen
unless you do your part. He respects people and he listens to them.”
He definitely listened to his own instincts as he envisioned and then founded Bandon
Dunes. The Kemper Management Group had done some work for him on the prospect for
building a golf resort on the Southern Oregon coast. A 20-page booklet on the subject
describes Keiser’s mission, “...to develop outstanding golf properties on Keiser-owned
land in Southern Oregon by the year 2000 that provide an ROI (return on investment) at
least equal to prime rate based on allocated net cost of land, holding costs and investment
in golf assets.”
The booklet lists reasons why Bandon Dunes was a bad idea that ranged from “No
permanent base of golfers,” to “Perception of weather a negative,” to “Area not well
Keiser spent little time dwelling on the downside. Instead, he set his objective,
“...walking only, middle of nowhere, classic course,” and just built it. Keep it simple, and
they will come.
Anyone who has played one of the three courses at Bandon Dunes will want to read
“Dream Golf.” Goodwin is a novelist-turned-golf-writer who does a solid job retelling
the story of the creation of Bandon Dunes. Though the book wasn’t supposed to be all
about Mike Keiser, how could it not be? His is a hell of a story. That he stuck to his own
instincts on a project of this size rather than defer to consultants with comprehensive
market studies is, by itself, enough of an economic anomaly these days to justify reading
Goodwin loves the courses. So this is not a “warts and all” treatment of Bandon Dunes
and the men who made it happen. Were one to go looking for warts, one might raise the
question of whether the greens fees and room rates have gone too high too soon. One
might also point out that while Bandon Dunes is a public course, you’d be hard-pressed
to see much difference between the clientele there and at the local country club.
But that would be quibbling with what will stand as a major Oregon story for decades to
come. And the final chapters haven’t been written yet. Keiser says, “I’m satisfied now.
But there’s still room at the resort for two more courses. So I will not be adding too many
more rooms because I don’t want it to get too big. But with two sites for golf I just won’t
be able to help myself.”
Bill Gallagher is the News Director of AM 860 KPAM – The Talk Station and the movie
reviewer for BrainstormNW. As for his golf game, he won’t book a weekend at Bandon
Dunes until he breaks 100, which should give him plenty of time to save for the greens
fees and accommodations.
BrainstormNW - July 2006