New Clubhouse or Extensive Remodel - Are there "Pro's" to doing it???

[Dave Doxey]

I didn't see any info on the financial health of the club.  Will you pay for the new clubhouse from a reserve fund?  From member assessments?  Or by taking on debt?

Given the economic challenges facing clubs today, taking on debt is very dangerous and can prove to be the kiss of death.

First, build an RFP and get solid cost figures.  Multiple contractor estimates. – being careful on what could happen with cost overruns. 

Then, test how how serious the supporters are by determining how much of an assessment or dues increase that they are willing to agree to.  Take the going-in position of NO DEBT”.

Then poll the non-supporters as to what they would do, should the plan go through.  These are the members who could leave and start the club's financial death spiral.

Build some financial models.  Include worst-case scenarios.  Cost overruns.  Loss of membership numbers.  Consider other capital needs and course improvements.

It's too easy to simply ask members “Hey, how'd you like a fancy new clubhouse?”, without asking them to pony up some serious money up-front.

Finally, realize that you are abandoning your stated mission of being a “golf only club” and moving into the same market as your competition (people who want more than “golf only”).  Ready to compete in that space? 

BTW – How can the club be below full membership, yet have a waiting list?

[Bill_McBride]

Do the math- if you build a 12- 15000 square foot clubhouse(not huge) at $500-600 a square foot you are in for 6-9 million and you haven't torn or hauled away anything. Throw in some inevitable overruns and you can get to 10 million quickly. Especially if the unions are  involved.

Jack, $500-600 a square foot?   Tell me where I can get some of those jobs!   As a commercial general contractor, I can build a clubhouse for $200-250 all day.   Maybe $300 if the millwork is OTT. 

I still think the best option for Michael's club is paint, carpet, add on to the deck.  Build a couple of fire pits. 

[J_ Crisham]

Do the math- if you build a 12- 15000 square foot clubhouse(not huge) at $500-600 a square foot you are in for 6-9 million and you haven't torn or hauled away anything. Throw in some inevitable overruns and you can get to 10 million quickly. Especially if the unions are  involved.

Jack, $500-600 a square foot?   Tell me where I can get some of those jobs!   As a commercial general contractor, I can build a clubhouse for $200-250 all day.   Maybe $300 if the millwork is OTT. 

I still think the best option for Michael's club is paint, carpet, add on to the deck.  Build a couple of fire pits. 

Bill, I guess you should have submitted a bid for the recent renovation at Bonita Bay it came in at 11.5 Million $ to renovate a 30 yr old clubhouse. I just spent over $450 a square foot to renovate my daughters bathroom:( Quality construction doesn't come cheap,

[Bill_McBride]

Do the math- if you build a 12- 15000 square foot clubhouse(not huge) at $500-600 a square foot you are in for 6-9 million and you haven't torn or hauled away anything. Throw in some inevitable overruns and you can get to 10 million quickly. Especially if the unions are  involved.

Jack, $500-600 a square foot?   Tell me where I can get some of those jobs!   As a commercial general contractor, I can build a clubhouse for $200-250 all day.   Maybe $300 if the millwork is OTT. 

I still think the best option for Michael's club is paint, carpet, add on to the deck.  Build a couple of fire pits. 

Bill, I guess you should have submitted a bid for the recent renovation at Bonita Bay it came in at 11.5 Million $ to renovate a 30 yr old clubhouse. I just spent over $450 a square foot to renovate my daughters bathroom:( Quality construction doesn't come cheap,

Just a bathroom or just a kitchen is high dollar.  I hope your daughter likes it!

[Duncan Cheslett]

There is of course, another way that a new clubhouse can sometimes come about.

http://www.bbc.co.uk/news/uk-england-manchester-29680068

Such a tragedy to befall a club, particularly after their well-publicised financial difficulties over the last year or so...





...happily I hear that they are very well insured.





Ringway Golf Club in leafy Hale Barns was similarly struck by misfortune in 1987 when their ramshackle old Victorian clubhouse very sadly burned to the ground.

The new one which was completed a year later is magnificent.

[Mike_Trenham]

Tell the folks at McMahon group hello from me when you meet them.

Honestly, if you discuss matters from your first board meeting on a public forum, you are in for an interesting three years.  Don't you think the board room conversations deserve more privacy?   I will not post hardly anything about my club on here the place is private and likes to be that way, and we are a bigtime success story at this time.

When you question what your boss  wants to do you post about it on Facebook?

And if your dues are north of $5k, I bet you will be meeting these people http://www.mcmahongroup.com/Club/Scripts/Home/home.asp

[Brett Wiesley]

I recently sold my membership at a club that currently pushed a new clubhouse through.  The scenario is that of a club with out of control spending, that is only going to spiral downward from here.  The dues we already climbing exponentially, despite a full membership at 460 members.  A vocal minority of members had tried to ram a new clubhouse through in 2010 but failed, only to resurrect the project again.  It passed in Spring 2014 but I would say deceitfully.  The board pushed a dues increase for 2014 of $42 announced in Dec. 2013 and gave the rationale that due to the new clubhouse not passing they would need to start accruing funds for future HVAC, Roof, etc.  Quickly then in 2014 a vote for new clubhouse was proposed again, this time noting the dues would only increase by $83/mo.  This passed, no landslide, but passed for a $10 million budget - for only $83/mo. more.  Of course, to help with this was the $42 increase already in measure, $32/mo. which was for prior course renovation that retired in April 2014.  So really this was $157 more than the prior year (as there would have been a $32/mo drop as debt retired) but as as well know dues never go down.  Dues went from under $400, now to $622/mo in just 4 years.  Add F&B at $68/mo and you have $700/mo. before you put a peg in the ground.  FYI:  Golf in this location is Northern, ie) 7 months.  

I have since left, but some friends still at the club noted the budget has risen now to accommodate the plans chosen to $11.5 million, and the time table is close to 2 years for completion.  As noted above, with change people will leave.  The club is owned equity with a clause of needing a buyer to get out of your membership.  They can't sue everyone.  If 10 people leave, dues just went up $13/mo. and if 50 leave dues just went up $76/mo.  Thus the downward spiral.  I can just see the email to the remaining membership when they need to raise more funds to finish the bathrooms at the end of construction.  Rumors are that some of the added benefits in your dues (range, locker, club storage, shoe shine) will now be a la cart with the new clubhouse - more shady shift of dues.

Stick to what you know....Good Golf.  I agree with the notion mentioned above, upgrade where needed.  Add a great porch, and some fire pits.  

[John Percival]

Michael,
Remember the building 'rule'...
   ...double the time, double the cost.

Suggest contacting clubs that have done a reno in the last 10 years and get their feedback.
Hindsight is 20/20.
The key is to have that hindsight beforehand.
Good luck

[archie_struthers]

   

Build the deck and throw a cheap 😙 but nice firepit  in . .  Forget the clubhouse , if it ain't broke you know .

[Bradley Anderson]

I would not advance on any of this until every department head of your club provides a 20 year asset reserve schedule for the timely replacement of all the assets under their management.

You may find that some big expenses are coming up in the next ten years.

You should also have a golf course architect develop a plan for refurbishing/updating the golf features: bunkers, tees, asphalt paths, bridges.

[Joe Sponcia]

Michael,

As others have already suggested, fully building out a new structure, especially if you are a golf club is a waste of money.  All good golf clubs are quaint.  If your club decides on a renovation, I would only do so after raising half the money up front.  Putting it all on a dues increase or waiting until you can pay off in full in one lump sum are both impractical. 

John K is right about board people, their motivation is grinding the axe. 

[Michael George]

It has been my experience that the best way to approach these issues is focusing entirely on the money as a precursor to doing anything.  Debt is the enemy of any golf club/country club.   If members want to take these actions, then the directors need to find ways for the club to either raise more money or save money in a systematic manner before spending the money.  Once the money is there, each project can be completed.  Further, be very aware of all expenses that are coming down the pike.  Boards often spend money on a project, later to tell the membership that some sewer, irrigation or other expenditure was a surprise.

Many directors want to spend money in their clubs whether they have it or not.  These same people would never do the same in their personal accounts.  However, spending the club's money allows them to be a spendthrift at a point in their life (which everyone quietly wants to do).  This is what you have to fight against within your club.

How do you raise or save the money?

Some clubs do it by charging a $25/$50 per month "Capital Fund" where the money is immediately separated and dedicated for exactly these issues.  This is far preferable to an assessment, where you lose a ton of members and often only create larger problems.  

Other clubs simply become more financially frugile and save the money over time (it is amazing how quickly you can save money by cutting certain "luxuries" within the club).  Determine what defines your club (ie. the golf course, the grille room, etc...) and don't cut those items.  Then determine what are just "extras" and see what you can do without.

Lastly, and possibly most important, by raising or saving the money first, the club will be required to prioritize the projects and determine those that are most important.  For instance, in your example, the roof and HVAC need to come first, followed by the kitchen and outdoor deck, followed by the pro shop (I don't know why any club would put money in their pro shop?).

Good luck.

[Carl Rogers]

is your present facility pretty 'clutzy' looking?

is there a need/desire/want to expand the overarching program (more social events or a big new locker room)?

do you just want a new paint job or a new roof? or just a new 'look'? or just some new furniture? or some new carpet?

as I have observed on this web site over time, the food service program, is a big money pit.

developing a questionaire for the membership (or even agreeing to the appropriate questions) is a formidable task.

to straw pole a 'major renovation' vs 'new building' does not get at the primordial urge to consider the undertaking.  dig deeper.

[Morgan Clawson]

Your "weakest link" as you put it, is very likely your competitive advantage.

Your ability to charge only 50% of what your main competitors charge is huge.

Less is more.  You're positioned perfectly for continued success.

[Roger Wolfe]

One more thing... make sure you put EVERYTHING into your new facility analysis to include the additional manpower necessary to run the new clubhouse once it reopens.  Do not make the mistake of assuming folks will start spending their faces off because of a new building.  You will still be the same club, with the same culture.  And don't fall victim to "we will bring in tons of banquet business!"  Assuming 40% costs and 30% labor, a $60,000 F&B manager requires about $200,000 in banquet sales to break even (banquet sales BEFORE tax and gratuity).

[Roger Wolfe]

Furthermore, I love capital funds and F&B surcharges.  A capital fund implies someday it will go away (which it never does).  An F&B surcharge (not a minimum) implies that it goes to the servers (which it doesn't).  Call them what they actually are... DUES!

[Bill_McBride]

Furthermore, I love capital funds and F&B surcharges.  A capital fund implies someday it will go away (which it never does).  An F&B surcharge (not a minimum) implies that it goes to the servers (which it doesn't).  Call them what they actually are... DUES!

My buddy spends four months every summer at Lake Tahoe.  Every month when he's gone, doesn't step foot on the property, his bill is $650.   The dues are $325 with tax.   That's a lot of not well hidden "dues."

[Michael Moore]

Make sure to build your new clubhouse right around the time this historically overvalued equity market shits the bed.

[Rich Goodale]

Has anybody here ever heard of this one.  I just heard this story, and was dumbfounded:

Major project.  Huge pricetag.  Vote goes the members.   The options are:

1.  I approve the project

2.  I disapprove of the project and hereby resign.

Holy cow...

At my home club, 5 years or so ago we had a second special general meeting to vote on a new clubhouse, and it was voted down, just as it was in the first special general meeting.  The entire Committee resigned.  That was a good result.....

[Chris Hughes]

I recently sold my membership at a club that currently pushed a new clubhouse through.  The scenario is that of a club with out of control spending, that is only going to spiral downward from here.  The dues we already climbing exponentially, despite a full membership at 460 members.  A vocal minority of members had tried to ram a new clubhouse through in 2010 but failed, only to resurrect the project again.  It passed in Spring 2014 but I would say deceitfully.  The board pushed a dues increase for 2014 of $42 announced in Dec. 2013 and gave the rationale that due to the new clubhouse not passing they would need to start accruing funds for future HVAC, Roof, etc.  Quickly then in 2014 a vote for new clubhouse was proposed again, this time noting the dues would only increase by $83/mo.  This passed, no landslide, but passed for a $10 million budget - for only $83/mo. more.  Of course, to help with this was the $42 increase already in measure, $32/mo. which was for prior course renovation that retired in April 2014.  So really this was $157 more than the prior year (as there would have been a $32/mo drop as debt retired) but as as well know dues never go down.  Dues went from under $400, now to $622/mo in just 4 years.  Add F&B at $68/mo and you have $700/mo. before you put a peg in the ground.  FYI:  Golf in this location is Northern, ie) 7 months. 

I have since left, but some friends still at the club noted the budget has risen now to accommodate the plans chosen to $11.5 million, and the time table is close to 2 years for completion.  As noted above, with change people will leave.  The club is owned equity with a clause of needing a buyer to get out of your membership.  They can't sue everyone.  If 10 people leave, dues just went up $13/mo. and if 50 leave dues just went up $76/mo.  Thus the downward spiral.  I can just see the email to the remaining membership when they need to raise more funds to finish the bathrooms at the end of construction.  Rumors are that some of the added benefits in your dues (range, locker, club storage, shoe shine) will now be a la cart with the new clubhouse - more shady shift of dues.

Stick to what you know....Good Golf.  I agree with the notion mentioned above, upgrade where needed.  Add a great porch, and some fire pits. 

Very interesting set of circumstances...


...how did it play out?

[Chris Hughes]

One more thing... make sure you put EVERYTHING into your new facility analysis to include the additional manpower necessary to run the new clubhouse once it reopens.  Do not make the mistake of assuming folks will start spending their faces off because of a new building.  You will still be the same club, with the same culture.  And don't fall victim to "we will bring in tons of banquet business!"  Assuming 40% costs and 30% labor, a $60,000 F&B manager requires about $200,000 in banquet sales to break even (banquet sales BEFORE tax and gratuity).

🫵🫵🫵

[Chris Hughes]

I didn't see any info on the financial health of the club.  Will you pay for the new clubhouse from a reserve fund?  From member assessments?  Or by taking on debt?

Given the economic challenges facing clubs today, taking on debt is very dangerous and can prove to be the kiss of death.

First, build an RFP and get solid cost figures.  Multiple contractor estimates. – being careful on what could happen with cost overruns. 

Then, test how how serious the supporters are by determining how much of an assessment or dues increase that they are willing to agree to.  Take the going-in position of NO DEBT”.

Then poll the non-supporters as to what they would do, should the plan go through.  These are the members who could leave and start the club's financial death spiral.

Build some financial models.  Include worst-case scenarios.  Cost overruns.  Loss of membership numbers.  Consider other capital needs and course improvements.

It's too easy to simply ask members “Hey, how'd you like a fancy new clubhouse?”, without asking them to pony up some serious money up-front.

Finally, realize that you are abandoning your stated mission of being a “golf only club” and moving into the same market as your competition (people who want more than “golf only”).  Ready to compete in that space?

BTW – How can the club be below full membership, yet have a waiting list?

Great advice never goes out of style🙌.

[Dan Boerger]

Well, there is no right answer, particularly from armchair QB's like myself.


I am also in a position of governance at a club that has made a significant investment in total facility upgrades. It has been very well received. My only comment (advice really) is not to be led too much by anecdotes, which often originate from a small group of dissatisfied members.


And remember that surveys are attitudinal, event/club participation is behavioral. Clubs run on behavior, not attitudes.

[mike_malone]

Try to discern whether the members see themselves as owners or customers. If customers is the answer look out. If owners is the answer they will invest.

[Carl Rogers]

is your present facility pretty 'clutzy' looking?

is there a need/desire/want to expand the overarching program (more social events or a big new locker room)?

do you just want a new paint job or a new roof? or just a new 'look'? or just some new furniture? or some new carpet?

as I have observed on this web site over time, the food service program, is a big money pit.

developing a questionaire for the membership (or even agreeing to the appropriate questions) is a formidable task.

to straw pole a 'major renovation' vs 'new building' does not get at the primordial urge to consider the undertaking.  dig deeper.

Can you get to a 98% concensus on what the new or re-worked building to do that it is not doing now?