Ocean Course developer reflects on ‘best course he ever built’

August 10, 2012

KIAWAH ISLAND, S.C. — Perched in his air-conditioned aerie, a hospitality suite above the Ocean Course's 18th hole, Jerry Barton surveyed a golf tournament that couldn't have happened without him and said with a sigh, "You get your heart broken a lot in this business."

Barton and his real estate company, Landmark Land, once owned most of Kiawah Island, but he lost everything in the savings and loan crisis of the early 1990's. He was on hand for the first round of this PGA Championship as an honored guest of Kiawah's current owners, who wanted to pay their respects. Barton talked about the Ocean Course like an old flame who had gone on to a successful marriage; he was happy for her, but a little wistful. "This is the best course we ever built," he said.

Ever wonder why the largely treeless Ocean Course has a big orange oak tree as its logo? That was cribbed from Landmark, which in its heyday in the 1980's paid Fred Couples, Paul Azinger, Larry Nelson and Craig Stadler to wear the same corporate logo. Back then you could scarcely slice a golf ball without it landing on a course owned or operated by Landmark; Barton's signature creations from that era include PGA West and Mission Hills in the Palm Springs area; Oak Tree in Edmond, Okla.; Palm Beach Polo & Country Club; and Carmel Valley (Calif.) Ranch.

Landmark was brought in to turn around Kiawah Island, which back then had two pretty good golf courses that were losing money and another that had been built but never opened due to lack of demand. Barton's contrarian vision was to build another golf course, one that could make Kiawah a must-play destination. He told his frequent collaborator Pete Dye, "Build me the hardest, most spectacular course you can. A course people want to play next year but not tomorrow."

As he explains today, "We wanted them to be lured in by the Ocean Course, but it would be so challenging they'd prefer to spend the rest of their time playing the other courses."

Barton is a quintessential American success story, the son of schoolteachers who grew up in tiny Stroud, Okla. (pop. 800). At age 5, he was selling popcorn at a family movie theater, and he had saved enough money at 15 to buy his first rental property. By the time he left for the University of Oklahoma, he owned 16 more properties. His conversations are a bewitching mix of homespun sayings and erudite references befitting a country boy who would go on to study metaphysics at the University of Chicago and political history at Oxford. The consummate salesman, Barton sold the PGA of America on his vision for the Ocean Course and was awarded the 1991 Ryder Cup before the course had been built. "The Ryder Cuppers were just about the first people ever to play the Ocean Course," Barton says.

Even that triumph was bittersweet because by then Barton's empire was already crumbling. The crisis had its roots in a fateful decision in 1982, when Landmark contracted with the federal government to acquire the Dixie Federal Savings & Loan Association, Louisiana's largest insolvent thrift. Barton brought in some imaginative MBAs who steadily reduced the operating losses, and he also transferred Landmark's real estate holdings to Dixie, a portfolio that in '89 would be valued at $1.9 billion by Deloitte & Touche. Well-capitalized and profitable, Dixie was a model of a rehabilitated S&L. "I thought I was part of the solution," Barton says. "Unfortunately, the government later decided I was part of the problem."

Barton's entry into the savings and loan market had come against the backdrop of Reagan-era deregulation, when less scrupulous wheelers and dealers were turning S&Ls into their private piggy banks to finance risky and often ill-fated investments, leading to widespread insolvency among the nation's S&Ls. The mounting financial crisis led Congress to create, in 1989, the Office of Thrift Supervision, which was imbued with Draconian powers to root out and prosecute S&L fraud and corruption. Forced by the new rules to extricate his real estate holdings from his savings and loans, Barton came to terms in '90 with a California homebuilder to sell 19 golf courses, four hotels and thousands of acres of undeveloped land for $992 million. Federal regulators refused to approve the deal. In '91 a Japanese company offered Barton $847 million for the same properties. Amidst a deepening recession, regulators spent months examining the deal without issuing a ruling, and eventually the offer was withdrawn.

With the lawsuits and countersuits piling up, Barton's dealings with the OTS grew increasingly contentious. In '92 the government seized Landmark's assets and fired most of its 3,500 employees. Oak Tree Savings was liquidated at a taxpayer cost of about $1.4 billion, ranking it 10th on the list of the era's costliest S&L bailouts, according to Business Week. The following year Landmark's resorts were auctioned off for $404 million, which went to the government. "Thirty years of work and $100 million of my money was gone just like that," Barton says matter-of-factly.

He spent the rest of the '90s fighting the government in court. Though it was financially strapped, Landmark kept developing golf courses, notably 36 holes designed by Dye at Lost Canyons in Simi Valley, Calif., and Doonbeg, a spectacular links set among towering dunes in southwest Ireland. Barton was eventually exonerated in a series of courtroom decisions. In 1997 Chief Judge Loren Smith of the Court of Federal Claims wrote in a ruling favorable to Landmark, "The United States has not acted in a manner worthy of the great, just Nation it is." In 2002 the U.S. Court of Appeals for the Federal Circuit finally awarded Landmark $21.5 million in its breach-of-contract suit against the government, a fraction of what Barton felt he was owed, but enough for him to get back in the ball game.

In recent years Barton has had a homerun with Apes Hill, a tony development in Barbados. At 79, he is still wheeling and dealing and traveling relentlessly to scoop up "distressed" properties that Landmark can rehabilitate, just as it did with Kiawah.

Barton reckons the Ocean Course is now seven shots easier than it was back in 1991, but it has served its purpose. "It took Kiawah from a regional resort to one of international prominence," he says. Even though he won't benefit financially, Barton is happy to see his old labor of love back in the spotlight. "It deserves to be recognized again," he says. "It will also help revitalize Kiawah Island during a difficult time. A lot of wealthy young people in New York and Silicon Valley have never seen the Ocean Course on TV."

From his couch in the luxury suite, Barton was asked to reflect on his rise and fall and rise again, which is tidily bookended by big-time tournaments on the Ocean Course. He took in the sweep of the 18th hole, framed by the crashing Atlantic. He is liable to quote anyone from Kipling to Joni Mitchell; this time Barton reached for George Bernard Shaw: "Life is a tragedy played by comedians."