Pickleball's Permitting Problem

The Quick Points

✍️ Eatertainment gets a new name. We would call it winning against your friends but organizations like Cushman Wakefield and hospitality groups call it competitive socializing. In their latest trends report they define it as “combining high-end dining and competitive games with a group of people hungry for unique, fun experiences that they can brag about to their friends”. Think Chicken n Pickle, Puttshack, Pickle and Social, Smashpark, and Crushyard. Ultimately these are all restaurant and bar businesses that require confidence in underwriting menus, service leaders, and design concepts. Pickle is the newest (and sustaining) flashy element to get folks into your location and help them have fun as they crush bites and beers. Competitive socializing is only entertaining to us personally as it further grows pickleball awareness and introduces everyday people to a first-time experience.

👟 Skechers adds to the roster. As we’ve previously reported, Skechers continues its heavy push into pickleball. This time, sponsoring two of the top-ranked professional pickleball players in the UK - Thaddea Lock and Louis Laville. Yes, these players haven’t made nearly the splash in the pro pickleball world the way we know of the big names in the States, however, it at least signals Skechers’ early and seemingly genuine commitment to carve out a space for themselves in the pickleball athletic apparel market, where there’s no clear dominant brand yet.

❌ False. “Austin Ranked Second Best City for Pickleball Lovers”. Next.

💰 Pickle & Social socializes their investment. Accredited investors in Louisville, KY can now participate in a fundraising round for Pickle & Social’s new location. This venue sits within a portfolio of other eatertainment-like assets (golf simulators, live music, pickleball) of Competitive Social Ventures (CSV), which we originally highlighted back in June. Interested parties can reach out to CSV for investment materials related to this specific location. We haven’t had a chance to speak to the team, so we don’t have an opinion on this specific business yet. And obviously, not financial advice.

What’s on our mind

Just one longer one for ya today.

⌚️ Pickleball's Permitting Problem. The potentially too highly-priced (in our opinion), Pickleball America in Stamford, CT is delayed due to an incomplete city permit. After our numerous discussions with facility operators around the country, this continues to be a recurring theme. Sometimes its genuine miscommunication or mismanagement by the facility operators, however, city governments are doing nothing to help bring economic opportunity and community engagement to their cities through the construction of these private facilities given the unbelievably onerous and convoluted web of permitting and regulations. The cost of these missteps and inefficiencies are borne almost entirely by the facility operators as well, since their lease payments to landlords or payments to the bank don’t stop just because the city won’t allow them to open their doors. To us, this underscores an often underappreciated element of the facility investment and construction process. Having a team/member or 3rd party resource with an in-depth understanding of these various complexities is a material competitive advantage. A quick start with a good idea, money, and access to suitable real estate can quickly become stymied by a bureaucratic process that keeps a facility in perpetual limbo, leaving the hundreds of thousands to millions of dollars in initial capex and buildout tied up - and we won’t start to talk about how this impacts an institutional investor’s IRR profile to have their fund’s capital simultaneously deployed but on hold. So, if there’s any validity to the competitive insulation provided by speed-to-market / first-mover advantages in an undersupplied pickleball market to acquire a passionate and sticky pickleball customer, then having everything in order with local governments becomes increasingly important. This makes both sides of the process equally important - having a strategy to get the doors open, and a strategy to get players through the door (and staying there). A strategy to get the doors open, but not players through the doors makes you a commoditized ‘court-in-a-box’, while a strategy to get players through the doors, but no way to get the doors open makes you a really nice place for pickleball players to windowshop. A strategy for both makes you a premier destination.

Breaking Ground

The Reset tracks publicly available court construction data to better understand the locations, costs, and development priorities going into projects across the nation. Our tracker can be found here.

Featured Developments:
Brooklyn is getting a 26k sqft facility with 5 permanent courts called, Court 16. The indoor location will be on the fourth floor of City Point and the facility will be mixed-use for tennis or pickleball (dedicated courts for each), as well as include a lounge area and pro shop. Their membership offerings are a little bit of a McDonald’s paradox of choice, but the monthly rate comes out to about $55/mo. It’s in a good location, with nearby restaurants, bars, and entertainment amenities within close proximity, allowing Court 16 to focus exclusively on the fitness angle and not need to effectively run a restaurant.

Pickleball House is a new facility opening in Baltimore County (Middle River, MD) owned by a group of investors. One of the investors, Gil Schuerholz is co-owner of a tennis club in Cantonsville, which we think will allow him to bring some of the learned business overlap to the pickleball center. The location will host 10 courts on 27k sqft, as well as have a locker room, showers, pro shop, and a small lounge area. They’re planning to have one center court with bleacher seating for tournament play, as well as planning to run typical programming. The facility has space to expand to another 6 outdoor courts.

The Michigan Economic Development Corporation is really leaning into their pickleball projects, after we previously covered the construction in Traverse City and Gladstone. The latest location is the City of Mackinac Island, planning to raise $100k to build 3 permanent courts at Great Turtle Park.

Best of the Rest:

• Cedar City, UT cut the ribbon on 8 new courts at the Bicentennial Softball Fields and Skate Park. The project included construction costs of ~$600k for the courts + ~$60k for lighting.

• Fairhope, AL replaced their existing pickleball quarts at Qual Creek with 6 new pickleball courts. The project was estimated to cost ~$114k.

• Warren, PA opened 8 new courts at Betts Park to the public to meet high demand in the area. They originally raised $250k to fund the project - unclear final amount needed.

• Roanoke, VA opened 6 new courts at Walrond Park. Cost TBD.