OT: Clubhouse investment

[Mark Chaplin]

Does anyone have any examples of member clubs who have invested heavily and successfully in their clubhouses? I’m sure there are a few examples of clubs crippled by vanity project debt.

[Tommy Williamsen]

What is interesting is that my old club spent bunches of dollars on a clubhouse addition and update in 2006. We were going to pay for through an assessment. 2008 then happened and we lost a great deal of our members. We got in financial trouble and were bought by a conglomerate. One of the reasons the club was purchased was the great clubhouse we built. The new owner loved it, our location, and the golf course. In the long run it worked out, but we were no longer member owned.
Btw, I left because I moved or I would still be a member.

[Jeff Schley]

Mark a US centric phenomenon is the creation of a 501 c (3) charitable organization of which donations are tax deductible.  Olympia Fields has a foundation set up not just for members, but for all to participate (although I think almost all are members).

The mission of the Foundation is to preserve and protect old and historic buildings in the Olympia Fields area, with particular focus on the Clubhouse of Olympia Fields Country Club.  The Foundation’s efforts help to perpetuate the area’s architectural, historic and general cultural heritage.


There are federal guidelines of projects that are able to be funded by the foundation.  Basically it has to be something that preserves or returns the physical structure/design to it's original condition.  Thus you can't use the funds to modernize your locker room/put in new dining room etc.  Repairing the facade in the original design, or windows, roof ect. all qualify.This has helped a tremendous amount to help with the outside structure, but can't do much for the interior unless you are restoring some bookcases/built ins/fireplace.  You can't replace the piping/HVAC etc., so it does help with older clubhouses as it stimulates donations by the members for it's tax deductible utility.


Clubs that borrow for big clubhouse renovations/replacement are typically rolled into some type of assessment to members and have sunk low/mid tier clubs.  The top clubs can absorb these much easier for the members want to stay at their iconic clubs and typically will pay. Bel Air I know has just undertaken a $50 million clubhouse demo/rebuild. I don't know how it was financed, but Bighorn just built a $70 million (yes, you read that right) new clubhouse.  Again I'm not sure how that was financed. Bel Air and Bighorn members are I'm sure capable of paying any assessments.

[Jon Wiggett]

Mark,


the important thing with clubhouse investment is that the clubhouse pull it's own weight. The club where I was a member growing up knocked down their clubhouse and built a new one in the 90's but had a proper business plan in place. The members had the ground floor and the first floor was used as a functions suite for weddings, etc. The catering was franchised out and the club has a clubhouse that makes it a profit which brings in a guaranteed income and no staffing issues.


Jon

[archie_struthers]

 


It's a slippery slope for most clubs but its also situational. Philly Cricket is an obvious example of a success story in renovating an old clubhouse yet keeping the traditional look that makes it special. The best part of the renovation they did a while ago is making the fantastic outside deck looking over the 18th hole into a profit center. I'm sure someone can post photos but they expanded it and utilize it to serve some great food al fresco. 


Just love it!

[Duncan Cheslett]

I know of quite a few examples of clubs who have successfully built new clubhouses after their old one unfortunately burnt down.


I also know of examples of clubs who have built enormous new clubhouses funded by debt. They do not seem to have been as successful.


I guess there's a moral there somewhere...

[Steve Lapper]

 There are several local examples of clubs that have invested heavily and successfully in their clubhouses. They span several time frames and have clearly demonstrated a shrewd decision by their owners or governing bodies.


 In the modern category, the best example would likely be Friars Head. Their elegant and stately clubhouse has spared little expense and functions beautifully Unquestionably, it has contributed to the success of the club. Runner's up IMO, would include it's neighbors, The Bridge and Sebonack.


 In the renovation division, the rebuild of Mountain Ridge CC deserves to be cited as an exemplary success. Done in a few stages, with no detail overlooked, the membership here substantially improved an already wondrous Wendehack classic without sacrificing or altering it's outstanding beauty. I know it far from cheap and they shrewdly financed it. Runner's up here would include the likes of Whippoorwill and Canoe Brook.


  The premise of the question rightfully suggests that it is way too easy to miss the mark and damage the financial future of the club. Surely there are glaring examples to be cited for that. What is the common denominator is thoughtfulness, scope of work and tight financial projections (or individual members with deep pockets and tested vision.
 

[John Kavanaugh]

Steve,


Thanks for mentioning Friars Head. I remember back when it was being built some throwback by the members of this site. There is an undefinable sense of satisfaction that comes from surrounding yourself with structural beauty.

[Ed Brzezowski]

Very timely thread, my club is looking to engage in the " me too " movement of blowing up one level. Making it open concept with an exposed kitchen and simulators right in the bar area. Costs seems to be just under two mil and funded by adding on  debt and a small assessment.


Seems everyone else is doing so and we don't want to be left behind. By doing so the debt level will rise to dangerous levels imho. I keep looking at the younger members who run out the door after a round, will this tend to keep them or will the novelty wear off after a trip or two? Making the additional debt burdensome and club debt almost reaching the land value of the club.




thoughts?

[Eric LeFante]

There are several local examples of clubs that have invested heavily and successfully in their clubhouses. They span several time frames and have clearly demonstrated a shrewd decision by their owners or governing bodies.


 In the modern category, the best example would likely be Friars Head. Their elegant and stately clubhouse has spared little expense and functions beautifully Unquestionably, it has contributed to the success of the club. Runner's up IMO, would include it's neighbors, The Bridge and Sebonack.


 In the renovation division, the rebuild of Mountain Ridge CC deserves to be cited as an exemplary success. Done in a few stages, with no detail overlooked, the membership here substantially improved an already wondrous Wendehack classic without sacrificing or altering it's outstanding beauty. I know it far from cheap and they shrewdly financed it. Runner's up here would include the likes of Whippoorwill and Canoe Brook.


  The premise of the question rightfully suggests that it is way too easy to miss the mark and damage the financial future of the club. Surely there are glaring examples to be cited for that. What is the common denominator is thoughtfulness, scope of work and tight financial projections (or individual members with deep pockets and tested vision.

Steve,


How much debt is too much? One of the clubs you mentioned had no debt 7 years ago and now is eight figures (public information from tax filings).

[Steve Lapper]

There are several local examples of clubs that have invested heavily and successfully in their clubhouses. They span several time frames and have clearly demonstrated a shrewd decision by their owners or governing bodies.


 In the modern category, the best example would likely be Friars Head. Their elegant and stately clubhouse has spared little expense and functions beautifully Unquestionably, it has contributed to the success of the club. Runner's up IMO, would include it's neighbors, The Bridge and Sebonack.


 In the renovation division, the rebuild of Mountain Ridge CC deserves to be cited as an exemplary success. Done in a few stages, with no detail overlooked, the membership here substantially improved an already wondrous Wendehack classic without sacrificing or altering it's outstanding beauty. I know it far from cheap and they shrewdly financed it. Runner's up here would include the likes of Whippoorwill and Canoe Brook.


  The premise of the question rightfully suggests that it is way too easy to miss the mark and damage the financial future of the club. Surely there are glaring examples to be cited for that. What is the common denominator is thoughtfulness, scope of work and tight financial projections (or individual members with deep pockets and tested vision.

Steve,


How much debt is too much? One of the clubs you mentioned had no debt 7 years ago and now is eight figures (public information from tax filings).

  Debt is best measured against cash flow, and it's sustainability. All else is secondary. Each club should look at it's membership, it's ability to sustain itself through efficient operations, membership acquisition and the aging of it's existing membership. Ultimately these metrics will dictate what level of club debt is acceptable.


  Obviously, eight figures of debt will work when there is large enough cash flows in excess of operational costs to support it. It will cripple a club that has erratic or sub-optimal cash flows.


 The terms of the debt matter as well. All this said, no matter what debt exists on a club's books, it wise and prudent to systemically pay it down over time.

[Thomas Dai]

Care is essential. Why? Three words - Narin and Portnoo.
atb

[V. Kmetz]

There are several local examples of clubs that have invested heavily and successfully in their clubhouses. They span several time frames and have clearly demonstrated a shrewd decision by their owners or governing bodies.

One of those examples you might have had in mind Brae Burn (NY).


On the direct answer-side BB success can be measured by a nearly 20% increase in both Monday outings and clubhouse events in the 10 years the renovation has been up and running.


On "there's more to any story" BB was the first to turn the lemons of hurting clubs in the 08 recession to their own benefit, taking on 40-50 members from the shuttering Ridgeway and liberalizing the terms by which new members joined...Debt still had to be taken on, members were inconvenienced for more than 1.5 seasons, but it was rare to spend like that at that time, when it felt fine to just thank your lucky stars for a stable membership base.


Now Brae Burn has been rewarded for ambitious choices 10-15 years ago,


One big thing that seems to bear on the original question is takign stock of how one's clubhouse is really used...40 years ago, clubhouses and their features were primarily for the members, now in the traditional club locales (USA) the clubhouse operation is much more focused on outside event/outing hosting and the elasticity of the facility for multiple purposes...


Such changes are natural (at least for the environment to which I've been richly exposed) as I'm told by the most senior members about the club's first 15 years that members' lives revolved entirely around the club... there were Tuesday bowling leagues and 200 strong Thursday dinner dances and staff had to chase members out at 2 in the morning on Friday and Saturday nights, when the dinner numbers were staggering (compared to today)...off season events (like a SB party or NYE) were maximum capacity... now that's all changed...