“Dream Golf” Required Huge Risks by Private Entrepreneur

In his Oregonian column last week, “Bandon Dunes and the inequities in the local tax burden,” Steve Duin criticizes Chicago entrepreneur Michael Keiser, developer of the Bandon Dunes golf resort, for taking advantage of alleged tax breaks such as low property tax rates. But he presents zero evidence that Mr. Keiser sought any of them. Differential tax rates are ubiquitous in the economy, thanks to legislators who love to pick winners and losers; there is no point blaming individual investors who take advantage of them.

More importantly, Mr. Duin fails to mention the many barriers Mr. Keiser faced in bringing his far-fetched dream of Scottish-style golf to the Oregon coast, as recounted by Stephen Goodwin in his fascinating book, Dream Golf: The Making of Bandon Dunes. The 1,215 acres Mr. Keiser purchased in 1991 had been owned for decades by other investors who had not been able to get land-use approval for any type of project. The land was essentially worthless, and therefore county residents derived no employment opportunities and local governments received very little in property tax revenue.

Mr. Keiser paid $2.4 million for the land, with the mere hope that he could get the necessary permits from 10 state agencies, Coos County, and the federal government, while also negotiating with the Coquille and Coos Indian Tribes. It took five years before the project was approved, and Bandon Dunes agreed to maintain roughly half the property in its natural state — foregoing all future revenue from that asset.

Ultimately, the first golf course wound up costing more than $20 million, and Mr. Keiser had no guarantee that anyone would ever play. Now it’s a world-class attraction, and more than 500 local residents are employed there. The total taxes paid by the resort far exceed the minimal state services offered in return.

Wealthy individuals can and do invest capital all over the world. I don’t think it’s a “problem” when they choose to invest some of it in Oregon.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research center. Note: In December 2009 Cascade Policy Institute received an unrestricted gift from the Mr. and Mrs. Michael L. Keiser Fund of the Oregon Community Foundation; the amount of the donation equaled 0.49% of Cascade’s total income for the year.