Anyone go through their club getting bought by a private entity?

[Brian Cenci]

My club apparently has had an offer and is considering selling to a private investor to relieve some debt issues.  The package they are offering is good in that essentially everything stays "status quo" for a minimum of 5 years as far as membership, being private, etc.

So, for those that have had this happened or had something similar I'd like to hear feedback on your experiences.

Thanks...Brian

[Adam Clayman]

Brian, I can't say I went through something like this, but... I did hear about a club in the Denver area that was purchased by someone who had big eyes on turning a huge profit on the real estate. Well, this moron failed to do his due diligence and didn't findout until after he had purcahsed the club that he was basically screwed from doing what he wanted to do with the land. The course is still there, but this guy is trying to recoup his costs, by building upwards right next to the course, on the small parcel(s) that aren't restricted. It has created a horrible atmosphere for anyone associated, but at least they are still golfing.

[PCCraig]

I remember hearing something about Briarwood CC in Deerfield, IL being offered something like $150 million for their land.

While I don't think they took the deal, I can't say for a club to sell and build something special a little further away is a bad idea.

Pat

[Bruce Katona]

Membership status quo for 5 years is fine, but as the club will now be non-equity, I assume, he/she gets to make all of the judgement calls on mainetenance costs, capital improvements, developing excess land, clubhouse upgrades, etc.....your club documents need to indicate strongly what you as the non-equity members have say over and what you don't....

[A.G._Crockett]

I belong to a for-profit, non-equity private club that has been sold twice during the 11 years that I have been a member.  In general, both owners improved the club from what it was when they bought it.  However, it is a business for them, and if that business is already in debt and struggling, they WILL cut expenses and/or increase revenues.  Then it comes down to the buyer's expertise and experience in running golf courses as to how happy you will be with those changes.

In our situation, both purchasers were already experienced and at least somewhat successful in the industry; I'd be really, really leery of a newcomer.

[Tommy Williamsen]

I have two stories.  My son's club years ago was purchased by a group of investors.  Two years later they sold off forty acres and squeezed the loses that were lost into the remaing land.  

I belonged to a club that was owned by a group of investors and sold it to another group.  They turned a very nice 36 hole private club into a resort complete with hotel.  Almost every day of the week there is some kind of outing on one of the courses.   Dozens and dozens of us left.  They didn't care because they were not making money off us anyway.

[Steve_ Shaffer]

My former club was  non-equity owned by a corporate golf company. Member committees and the Board acted in an advisory capacity. For the most part, the owner acted beneficially although clearly in their own economic interests.

[Brent Hutto]

I was a member at the University Club in Blythewood, SC. At the time I joined it was a for-profit, non-equity club whose (local) ownership was separate from the housing development adjacent to the course. Both the golf club and the surrounding housing development were purchased and consolodated into the hands of an out-of-state developer and taken way, way upscale. Monthly dues were more than doubled and it was announced that "eventually" membership would consist only of homeowners. The majority of the existing members left either immediately or within a few months as the cost was now far beyond any course in this part of South Carolina.

They're now replacing the original third nine with a new eighteen holes designed by Lee Janzen. There is now a gatehouse and guard, requiring members and guests to be on a list beforehand to be admitted to the property. They've started daily walk-mowing of the greens and it is totally a "high touch" operation with legions of uniformed personnel from the moment you pass through the gate.

I've never seen the course in better shape except for the massive earthmoving, roadbuilding and utility-trench digging that goes with the new high-end housing construction. I guess that's why they had to consolodate ownership of the club with the housing because the new construction is hard up against the playing corridors of the course and the construction disruption would probably be actionable if a separate ownership were still running the club. But tee to green they're gradually working their way into Sage Valley territory, although of course there's still a ways to go. A nice place to visit and play golf at least on weekends when the big Cats are inactive.

FWIW, the developer is the Ginn Company if that means anything.

[Steve_ Shaffer]

"They're now replacing the original third nine with a new eighteen holes designed by Lee Janzen"

Lee Janzen??

Who's really doing the work?

[Brent Hutto]

I don't know who Janzen is working with. By the time I left the club they had only just had a press conference to announce the redesign and I never got any details. I can ask around, though. A few more "refugees" came over to my new club over the winter and maybe they know more.

The main purpose of the redesign is to stretch the holes out over the entire property so as to produce more "golf course lots" for houses. The original main eighteen remains reasonably compact and won't change as far as I know.

[SB]

Much depends on who is doing the buying.  While many people are what they seem to be, that is not always the case.  I would recommend you get a lawyer very experienced in golf real estate (and there are less than five that I would recommend) to represent you.  Simple real estate attorneys simply have not seen enough of the problems to be helpful.  There are more than a few lawsuits of members suing their owners.  

I would also seriously consider leasing the club as opposed to selling.  That way, you retain much greater control.  Send me an e-mail if you would like me to point you in the right direction.

[Dan Herrmann]

Brian,
We're going through something similar right now at French Creek (Hanse) in Elverson, PA.  The owner, a real estate developer, apparently didn't understand the work required to run a golf club.  He's trying to sell right now, but it's a tough market.

He's also trying to turn Downingtown (early G Fazio) into senior housing, which, IMHO, is really dumb.  Central Chester County has a overabundance of 55+ housing already, plus, this would remove the little open space left out here.

The best owner I've ever met is Roger Hansen, the gentleman that owns Hidden Creek (C&C) in Egg Harbor, NJ.  He has long range vision and really understands golf.  A fantasic role model executed on a truly wonderful course.