Why is Pasatiempo a successful semi-private?

[Pete Lavallee]

Many people lament the lack of access to US Private Clubs. Through much disccission it seems to come down to two things. Number one on the list is that a private club would loose it's non-profit tax status if it derives greater than 10% of its income from outside play. Number two would seem to be just plain exclusivity; the unwashed are unwanted.

How does Pasatiempo balance what would appear to be greater than a 10% income off outside play while still keeping the members happy? Why can't other clubs follow this path?

[Bill_McBride]

I don't think many clubs have a course as good as Pasatiempo that are willing to open to the (unwashed) public.

I'd suggest this may become more common if the economy stays stagnant for a few more years.

The English model is terrific.   The greatest old courses open to visitors at certain times.   No marshals bullying you to play faster, just a terrific day (thinking of Walton Heath a couple of weeks ago).

[David_Tepper]

Pete L. -

I do not believe Pasatiempo operates as a non-profit. It is not a "club" like 99% of the private golf clubs & country clubs in the U.S.
The "members" are shareholders in the corporation that owns & operates the club. Over the years, the shareholders have chosen to reinvest any profit made from the operation of the club back into improving/maintaining the course.

I also believe shareholders at Pasatiempo are pretty much able to sell their "shares" in the corporation to anyone they please. There is no admission process or admissions committee, which also makes it different from 99% of the golf & country clubs in the U.S.

DT      

[Tim Leahy]

Pasatiempo has done a good job of "limiting" public play with high green fees.  It is not a destination course like those down the road in the Pebble Beach/Monterey area and the high green fees keep the casual golfers from overcrowding the course. If they need the extra cash they offer specials to the NCGA which again is a limited access.

[Mark Provenzano]

Pasatiempo has done a good job of "limiting" public play with high green fees.  It is not a destination course like those down the road in the Pebble Beach/Monterey area and the high green fees keep the casual golfers from overcrowding the course. If they need the extra cash they offer specials to the NCGA which again is a limited access.

They don't just do the NCGA specials, they have $150 weekend tee times right now on golfnow.com. There's even a couple of $106 with cart 2PM times Sunday and Tuesday; that's kind of twilight rate, but you'd finish. That's as low as I've ever seen it the past few years, with usually great weather on that side of the hill in October. They've also offered that $150 rate to their mailing list a few times this summer.

The shareholders can decide each year whether or not to purchase annual golf memberships. Their target is 300 active golfing members. They had a "trial" membership program this year, allowing you to pay just that annual fee + $1200 (worked out to ~$450/month.) for 12 months of full privileges, in an attempt to get up to that goal of 300. (If I lived a little closer....)

I'm sure it's a delicate balance serving the needs of membership and filling slots with outside play. I think they do a decent job, every time I've been there it's seemed busy but not at all crowded. All but one member I've been paired with has been a pleasure to play with and welcoming of guests.  

[Bill_McBride]

Pasatiempo has done a good job of "limiting" public play with high green fees.  It is not a destination course like those down the road in the Pebble Beach/Monterey area and the high green fees keep the casual golfers from overcrowding the course. If they need the extra cash they offer specials to the NCGA which again is a limited access.

Exactly the point of my English comparison.   We paid £125 at Walton Heath.   What's that, $185?   Lots of visitor revenue but a process of self-selection. 

[Davis Wildman]

We'll learn lots more about Pasatiempo's biz model at the Symposium on Affordable Golf, and while Richard took some heat about inviting Superintendent Paul Chojnacky/Pasatiempo Golf Club it will still be interesting to hear what he says...imho.

Join in the fun if you can.

[JMEvensky]

I don't think many clubs have a course as good as Pasatiempo that are willing to open to the (unwashed) public.

I'd suggest this may become more common if the economy stays stagnant for a few more years.

The English model is terrific.   The greatest old courses open to visitors at certain times.   No marshals bullying you to play faster, just a terrific day (thinking of Walton Heath a couple of weeks ago).

I agree that public play will become more common at privates.But,from reading some of these responses,I'm not sure the Pasatiempo model can be easily duplicated.

A highly esteemed golf course in a pretty wealthy area which can command a relatively high green fee is a nice trifecta.

But,the risk for the privates will be the non-member green fee being set so low that members start questioning the value of their monthly dues bill.It's a tough balancing act.

[Pete Lavallee]

The English model is terrific.   The greatest old courses open to visitors at certain times.   No marshals bullying you to play faster, just a terrific day (thinking of Walton Heath a couple of weeks ago).

Bill,

We've discussed that here many times. Why can't for instance, the Valley Club, let people play after noon time for $150? That cost would keep play in check and those who really want to experience great architecture get their chance. I don't think it's because they want to exclude people; although I may be wrong. I think David Tepper has hit the nail on the head here: It's the way that Pasatiempo is chartered that allows it to happen. If Valley Club opened the gates in the afternoon, ala Walton Heath, they would derive to much income from outside sources and would loose their tax status. Please correct me if I'm wrong.

[C. Squier]

It's much simpler than that.  How do you tell the guy who is paying $6000-$12,000 a year in annual dues after an initiation fee that his next door neighbor can play the same course for $150?  The English model works b/c dues and initiation fees are minute compared to ours in the States.   

Good luck w/ that one.

[Phil Benedict]

It's much simpler than that.  How do you tell the guy who is paying $6000-$12,000 a year in annual dues after an initiation fee that his next door neighbor can play the same course for $150?  The English model works b/c dues and initiation fees are minute compared to ours in the States.   

Good luck w/ that one.

How do UK privates get by with such low dues/fees?  Fewer frills?

[Joe_Tucholski]

It's much simpler than that.  How do you tell the guy who is paying $6000-$12,000 a year in annual dues after an initiation fee that his next door neighbor can play the same course for $150?  The English model works b/c dues and initiation fees are minute compared to ours in the States.   

Good luck w/ that one.

Don't they also get by with lower annual member rates in the UK because tourists effectively subsidize the rates for locals...so my thought is US clubs with 6-12k fees would be able to decrease dues if they allowed outside play.  Maybe the tax implications make this impossible for most clubs  in the US even if members wanted it.  I would guess the members not wanting outside play would be the bigger issue.

[Kalen Braley]

It's much simpler than that.  How do you tell the guy who is paying $6000-$12,000 a year in annual dues after an initiation fee that his next door neighbor can play the same course for $150?  The English model works b/c dues and initiation fees are minute compared to ours in the States.   

Good luck w/ that one.

How do UK privates get by with such low dues/fees?  Fewer frills?

I'll take a few guess why:

1)  Small staff
2)  Small clubhouses that don't cost a fortune to maintain and/or have big F&B operations.
3)  Less than "perfect" conditions
4)  Far less watering expense...being in the UK after all.
5)  Far less of the "them and us" US mentality when it comes to allowing liberal outside play for additional revenue.
6)  Many of them being older probably own the land outright and don't have big loans to re-pay.

I would compare the private model in the UK to being a member at the mens club at your local muni.  You pay extra for preferred weekend tee times and being able to compete in the club events.

[JMEvensky]

Joe T.,I think you're right about the bigger issue being that current members don't want more outside play.

Almost every club has Monday outings,but the members don't see them.So,no harm no foul.

Frequently,clubs are split between members who want to keep it as private as possible--damn the cost,and members who look at an empty golf course on a weekday and see unsold airplane seats(and higher operating assessments).They have no problem selling unused tee times to non-members.

Clubs avoid moving too far either direction for fear of pissing off a large group of members.Consequently,you get as many Monday outings as can be sold but the other 6 days of the week remain sacrosanct.

It's perfect--everybody hates it.

[Jud_T]

I would compare the private model in the UK to being a member at the mens club at your local muni.  You pay extra for preferred weekend tee times and being able to compete in the club events.

With the caveat that 9 times out of 10 the course in the UK is superior...

[Kalen Braley]

I would compare the private model in the UK to being a member at the mens club at your local muni.  You pay extra for preferred weekend tee times and being able to compete in the club events.

With the caveat that 9 times out of 10 the course in the UK is superior...

True Jud,

I need to find me a job in Scotland and move over there!! 

[Pete Lavallee]

I'll take a few guess why:

1)  Small staff
2)  Small clubhouses that don't cost a fortune to maintain and/or have big F&B operations.
3)  Less than "perfect" conditions
4)  Far less watering expense...being in the UK after all.
5)  Far less of the "them and us" US mentality when it comes to allowing liberal outside play for additional revenue.
6)  Many of them being older probably own the land outright and don't have big loans to re-pay.

I would compare the private model in the UK to being a member at the mens club at your local muni.  You pay extra for preferred weekend tee times and being able to compete in the club events.

I sorry but I have to call bullsh$t on that reasoning:

1)  Small staff

Can't say that I seen less staff at UK Clubs, they still have to cut the grass and rake the bunkers. Most Clubhouses run two bars, one for just members where you usually need a jacket and a lounge for casual drinks and visitors. Plus a big F&B operation. Locker Rooms must stay open till dark so you can change back into your streeet shoes to go home. There's always a Pro and assistants in the Pro Shop too.

2)  Small clubhouses that don't cost a fortune to maintain and/or have big F&B operations.

Do you call this a "small clubhouse"?


3)  Less than "perfect" conditions

I guess that depnds on your definition of perfect.

4)  Far less watering expense...being in the UK after all.

You got me on that one, but hey Fishers Island doesn't have fairway irrigation and we aren't staging KP VII there!

5)  Far less of the "them and us" US mentality when it comes to allowing liberal outside play for additional revenue.

I take it you haven't been to a top tier British Club. Although they are very welcoming there is still a caste system in the UK.

6)  Many of them being older probably own the land outright and don't have big loans to re-pay.

I doubt the Valley Club is still paying off the land it sits on.

[Sean_A]

It's much simpler than that.  How do you tell the guy who is paying $6000-$12,000 a year in annual dues after an initiation fee that his next door neighbor can play the same course for $150?  The English model works b/c dues and initiation fees are minute compared to ours in the States.    

Good luck w/ that one.

How do UK privates get by with such low dues/fees?  Fewer frills?

I'll take a few guess why:

1)  Small staff
2)  Small clubhouses that don't cost a fortune to maintain and/or have big F&B operations.
3)  Less than "perfect" conditions
4)  Far less watering expense...being in the UK after all.
5)  Far less of the "them and us" US mentality when it comes to allowing liberal outside play for additional revenue.
6)  Many of them being older probably own the land outright and don't have big loans to re-pay.

I would compare the private model in the UK to being a member at the mens club at your local muni.  You pay extra for preferred weekend tee times and being able to compete in the club events.

Kalen

I think compared to privates in the States, in general your points are spot on.  I would add on more to the llst, UK clubs generally have 2-4 x the members of American counterparts. Most clubs will see an empty course as a bad thing with lost revenue.  Although. I do not go for your comparison of UK clubs with munis.  UK clubs are private which in the main allow outside play.  That is a world away from any muni I know of. 

Regarding Pasa, I too thought it was a corporation of sorts and not subject to the benefits of a tax deal that most private clubs are.  Although, I was under the impression the tax deal was based (in many states anyway) on less then 20% outside revenue.  I also get the impression that clubs would rather take in this revenue in large amounts with targeted outings rather than piecemealed out such as in the UK.  

Ciao

[Bill_McBride]

Kalen old pal, you need to get to England and see just how far off the mark your comparison of a British private club to a men's association club at a US public course is.   Your comment is so parochial and uncomprehending that it's hard to be gentle with this response.  

Four GCAers played Walton Heath Old, a World Top 50 that just hosted the Senior British Open, for 125 quid.  The members knew it was a time set aside for visitors and played the New.  The fees from visitors keep the annual subscription down to about $1500 a year.   There is no diminishment of the members' perks.   It's just a different model, but the members don't give up much at all.  

[Kalen Braley]

Pete,

A few comments:

There will always be exceptions to the rule in terms of clubhouse size.  I agree that one you posted looks rather large, but in general from the reviews I've seen my fellow GCA brethern do, the clubhouses over there in general look more like the size of a standard 4 bedroom house, not a mansion as you posted.

As for the "them vs us" mentality, even though their may be some British 'tude going on...as Sean pointed out, at least it seems they can look past that and not let pride get in the way of having mostly full tee sheets.  I judge a man/society more by what they do, not so much by what they think.

There are indeed some clubs here in the states that are free and clear of payments...but i'm guessing the percentage of clubs that are free from debt in the UK is a much more massive number than the ones here in the US.  With so many top notch high end privates that have been built here in the last 10-20 years, they gotta be struggling big time right now.  How many privates have been built in the UK over the last 25- 30 years?

Sean and Bill,

Thanks for clarifying.  I certainly did not intend to suggest that the atmosphere/cultyure was muni-like in nature in the UK, only that the model more closely resembled that of a typical muni "mens club" where you pay $500/year for reduced green fees, preferred tee times, and other club event access.

[Pete_Pittock]

501(c)(7) tax exempt golf clubs cannot exceed 15% of gross revenue from non-members.

[Bill_McBride]

The English model is terrific.   The greatest old courses open to visitors at certain times.   No marshals bullying you to play faster, just a terrific day (thinking of Walton Heath a couple of weeks ago).

Bill,

We've discussed that here many times. Why can't for instance, the Valley Club, let people play after noon time for $150? That cost would keep play in check and those who really want to experience great architecture get their chance. I don't think it's because they want to exclude people; although I may be wrong. I think David Tepper has hit the nail on the head here: It's the way that Pasatiempo is chartered that allows it to happen. If Valley Club opened the gates in the afternoon, ala Walton Heath, they would derive to much income from outside sources and would loose their tax status. Please correct me if I'm wrong.

The Valley Club is so exclusive that most people don't even know its there!

[J_ Crisham]

I'll take a few guess why:

1)  Small staff
2)  Small clubhouses that don't cost a fortune to maintain and/or have big F&B operations.
3)  Less than "perfect" conditions
4)  Far less watering expense...being in the UK after all.
5)  Far less of the "them and us" US mentality when it comes to allowing liberal outside play for additional revenue.
6)  Many of them being older probably own the land outright and don't have big loans to re-pay.

I would compare the private model in the UK to being a member at the mens club at your local muni.  You pay extra for preferred weekend tee times and being able to compete in the club events.

I sorry but I have to call bullsh$t on that reasoning:

1)  Small staff

Can't say that I seen less staff at UK Clubs, they still have to cut the grass and rake the bunkers. Most Clubhouses run two bars, one for just members where you usually need a jacket and a lounge for casual drinks and visitors. Plus a big F&B operation. Locker Rooms must stay open till dark so you can change back into your streeet shoes to go home. There's always a Pro and assistants in the Pro Shop too.

2)  Small clubhouses that don't cost a fortune to maintain and/or have big F&B operations.

Do you call this a "small clubhouse"?


3)  Less than "perfect" conditions

I guess that depnds on your definition of perfect.

4)  Far less watering expense...being in the UK after all.

You got me on that one, but hey Fishers Island doesn't have fairway irrigation and we aren't staging KP VII there!

5)  Far less of the "them and us" US mentality when it comes to allowing liberal outside play for additional revenue.

I take it you haven't been to a top tier British Club. Although they are very welcoming there is still a caste system in the UK.

6)  Many of them being older probably own the land outright and don't have big loans to re-pay.

I doubt the Valley Club is still paying off the land it sits on.

Pete,  The beautiful clubhouse picture you showed is probably pretty typical here in the Chicago area sizewise. I can think of 20 that are about that size and  a few, Medinah and Olympia Fields that would dwarf the picture you showed. Out of curiosity what club is that? As an aside, some of the area clubs are now starting to shut down for the months of Jan-Mar. The heating bills are incredible in these old clubhouses and so many of our members are in FL or AZ. during this period.  Jack

[Bill_McBride]

Jack, that's Royal Liverpool, remodeled before the 2006 Open.  The bits at the far left were added and include the pro shop and a locker room addition.   

[Tom_Doak]

Pete L:

Are you always in the business of telling private clubs how they should operate?

I have a fair amount of experience with both of the clubs you are talking about.

I think that the members of The Valley Club are happy to pay their current dues in order to have exclusive use of their golf course whenever they want.  Sure, they could take $150 green fees if they wanted -- which would be a hell of a bargain for Santa Barbara, California -- up to 15% of their income, without losing their tax status, although they'd be much more likely to be audited over it.  But they just don't need to do it.  I think they would rather decide to host visitors as guests when they decide.

As for Pasatiempo, I believe their status evolved as the result of the bankruptcy of the club in the 1930's.  It was bought out by one of the members and turned into a public course ... and then some time later, was reincorporated as a private club.  Whether by deed or out of a sense of obligation for having survived as a public course for many years, they allow the public to play it at certain times as a semi-private facility. 

The problem with the semi-private model is that it's difficult to sell expensive memberships if you are going to allow outside play ... especially with clubs all around the nation struggling, there isn't enough benefit to becoming a member somewhere.  The only way the semi-private model can really be organized is from a position of financial strength, with a willing membership.  Usually, that would mean that the course would have had to start public and evolve to private ... as, indeed, Pasatiempo did if you start the narrative from after the bankruptcy.