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Craig Disher

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Re: Private Club Rate Raise
« Reply #25 on: November 04, 2024, 11:57:05 AM »
Private club, not member-owned. Yearly dues up 50% over 5 years (8K to over 12K), 10% from 2024 to 2025. I have no idea of the revenues or expenses but the golf and f&b staff has increased. Course conditioning has been about the same. There have also been significant cosmetic improvements to the areas surrounding the clubhouse. I believe the owner is doing well as the membership to over 600 and increased accompanied and unaccompanied guest play has made it much more difficult for members to secure a convenient tee time.

John Kavanaugh

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Re: Private Club Rate Raise
« Reply #26 on: November 04, 2024, 12:12:42 PM »
Thank God for owners.

Carl Johnson

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Re: Private Club Rate Raise
« Reply #27 on: November 04, 2024, 12:17:12 PM »
Our private member-owned (nonequity) club just jumped initiation from $40,000 to $65,000 paired with an assessment of $18,750 to existing members (reduced for members over age 65, etc.).  We lost about 50 of 500 members as a result of the assessment, but had no trouble at all filling those spots from the wait list, so I have heard.  Plenty were in line who were willing to go the full Monty.  The assessment and initiation kick up were to pay for a new clubhouse and some golf course infrastructure improvements (e.g., irrigation systems).  What will be telling is how the dues increases (decreases not expected) go over the coming years, but as someone once said, predictions are hard to make, especially about the future.  Dues increases for calendar year 2025 haven't been announced yet.
« Last Edit: November 05, 2024, 02:40:40 PM by Carl Johnson »

Ira Fishman

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Re: Private Club Rate Raise
« Reply #28 on: November 04, 2024, 05:39:14 PM »
Thank God for owners.


I thought you said that gentlemen don’t discuss economics :-)

Chris Hughes

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #29 on: November 04, 2024, 10:30:02 PM »
As a golf course owner, I can assure you that the cost of running a golf course is up dramatically.  Even for member owned non-profit clubs.  At nearly all clubs, labor is the largest single line item, in some cases almost 50% of total expenses.  For some positions at my course, the starting wage is up almost 100% since the start of COVID.  Other positions have not been affected as much, but they are up as well. The number of hours is also up, as the increase in rounds means more pro shop staff, more outside staff, and more restaurant servers.  That's not an increase of thousands of dollars, it's easily hundreds and hundreds of thousands of dollars or certainly more than a million dollars for many clubs. 


Insurance is up by 2X or 3X, property taxes are up, mower prices have doubled and you can now easily pay a hundred thousand dollars for a single mower.  And there is NO used equipment at any price.  Any project requiring outside contractors is up 50%.  Sorry, but we are not immune from inflation and our heavy reliance on labor means we are are seeing more inflation than other industries.



If your private club has $5M in expenses, then a 20% increase overall is a million dollars.  And 20% could be just one year's hit. 
 
If your club was full, then the number of members hasn't changed, so clubs (even non-profit) can either cut services or raise fees, and nobody is looking to cut services right now.  Quite the opposite, members are demanding better conditions to keep up with the club next door.  If you divide $1M by 400 members, that's $2,500 a year per member.


Throw in a dining room renovation, increased maintenance, or an irrigation project and now you're talking real money. 


Sorry to break it to you, but it's math.


Presumably there are significant revenue offsets for the expense increases you outline?
"Is it the Chicken Salad or the golf course that attracts and retains members ?"

Chris Hughes

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #30 on: November 04, 2024, 10:34:49 PM »



Great post; thank you.


My club (member owned) went through a very lengthy and very careful process in 2022 and 2023 to determine the next steps for both facilities upgrades and improvements.  The determination was made that there would be a bunker renovation, a new pool and pool house to replace the original ones from 1966, and 4 dedicated pickleball courts.  (The pool/pool house and bunkers were much more deferred maintenance than just capital improvements.)


There was a $4k per membership unit assessment, and the bunker work, which required no permitting, proceeded last winter. The financing of the project also included a $50/month dues increase that would take effect when the demo on the existing pool began.


By the time we closed the pool for the season and had all the permits in place to begin that work, costs had gone up so much that the club had to borrow an extra $1 million and change above the projections from just a year earlier.


All of this has happened at an extremely well-run and financially healthy member-owned club.


As a %, how much was the $1,000,000 overage vs. the original estimate?









« Last Edit: November 05, 2024, 04:51:02 PM by Chris Hughes »
"Is it the Chicken Salad or the golf course that attracts and retains members ?"

A.G._Crockett

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #31 on: November 05, 2024, 07:56:22 AM »



Great post; thank you.


My club (member owned) went through a very lengthy and very careful process in 2022 and 2023 to determine the next steps for both facilities upgrades and improvements.  The determination was made that there would be a bunker renovation, a new pool and pool house to replace the original ones from 1966, and 4 dedicated pickleball courts.  (The pool/pool house and bunkers were much more deferred maintenance than just capital improvements.)


There was a $4k per membership unit assessment, and the bunker work, which required no permitting, proceeded last winter. The financing of the project also included a $50/month dues increase that would take effect when the demo on the existing pool began.


By the time we closed the pool for the season and had all the permits in place to begin that work, costs had gone up so much that the club had to borrow an extra $1 million and change above the projections from just a year earlier.


All of this has happened at an extremely well-run and financially healthy member-owned club.




As a %, how much was the $1,000,000 overage vs. the original estimate?


Good question.  I’m sure I can find that, but I’ll have to do some digging.  And it’s perhaps a little hard to separate out because the bunker project (repairing drainage, capillary concrete, all new sand, sod around the edges) was completed and paid for before the permitting for the rest of the project was even complete.  There was an additional issue when some asbestos was unexpectedly found in the pool house, which changed the demo procedure and cost.


I’ll see what I can find on that; interesting question.
"Golf...is usually played with the outward appearance of great dignity.  It is, nevertheless, a game of considerable passion, either of the explosive type, or that which burns inwardly and sears the soul."      Bobby Jones

A.G._Crockett

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #32 on: November 06, 2024, 07:26:45 AM »



Great post; thank you.


My club (member owned) went through a very lengthy and very careful process in 2022 and 2023 to determine the next steps for both facilities upgrades and improvements.  The determination was made that there would be a bunker renovation, a new pool and pool house to replace the original ones from 1966, and 4 dedicated pickleball courts.  (The pool/pool house and bunkers were much more deferred maintenance than just capital improvements.)


There was a $4k per membership unit assessment, and the bunker work, which required no permitting, proceeded last winter. The financing of the project also included a $50/month dues increase that would take effect when the demo on the existing pool began.


By the time we closed the pool for the season and had all the permits in place to begin that work, costs had gone up so much that the club had to borrow an extra $1 million and change above the projections from just a year earlier.


All of this has happened at an extremely well-run and financially healthy member-owned club.


As a %, how much was the $1,000,000 overage vs. the original estimate?


The additional $1m was a 20% increase on the entire project, including the bunkers.  The original projection was made in early 2023.
"Golf...is usually played with the outward appearance of great dignity.  It is, nevertheless, a game of considerable passion, either of the explosive type, or that which burns inwardly and sears the soul."      Bobby Jones

Buck Wolter

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #33 on: November 06, 2024, 12:23:32 PM »
Our private member-owned (nonequity) club just jumped initiation from $40,000 to $65,000 paired with an assessment of $18,750 to existing members (reduced for members over age 65, etc.).  We lost about 50 of 500 members as a result of the assessment, but had no trouble at all filling those spots from the wait list, so I have heard.  Plenty were in line who were willing to go the full Monty.  The assessment and initiation kick up were to pay for a new clubhouse and some golf course infrastructure improvements (e.g., irrigation systems).  What will be telling is how the dues increases (decreases not expected) go over the coming years, but as someone once said, predictions are hard to make, especially about the future.  Dues increases for calendar year 2025 haven't been announced yet.
I really am clueless about club 'ownership' structures. What does member-owned, non-equity mean? If members don't have equity who does? If you get assessed on non-equity isn't that really saying your initiation is subject to change?
Those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience -- CS Lewis

Jeff Schley

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #34 on: November 06, 2024, 01:59:28 PM »
Clubs I'm a member, One gives control to the board of any dues increase of 3% or the CPI that previous fiscal year for the city (whichever is higher), or there is a vote of the membership. The other is 5% or a member vote.  The initiation fee has a much more broad authority it seems as I don't recall ever seeing even any discussions, it just goes up it seems without notice.
Costs are up, so are borrowing costs however. Clubs that take out loans now are much different than 2020/21 when interest rates were less than half they are now.
"To give anything less than your best, is to sacrifice your gifts."
- Steve Prefontaine

A.G._Crockett

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #35 on: November 06, 2024, 08:00:18 PM »
Our private member-owned (nonequity) club just jumped initiation from $40,000 to $65,000 paired with an assessment of $18,750 to existing members (reduced for members over age 65, etc.).  We lost about 50 of 500 members as a result of the assessment, but had no trouble at all filling those spots from the wait list, so I have heard.  Plenty were in line who were willing to go the full Monty.  The assessment and initiation kick up were to pay for a new clubhouse and some golf course infrastructure improvements (e.g., irrigation systems).  What will be telling is how the dues increases (decreases not expected) go over the coming years, but as someone once said, predictions are hard to make, especially about the future.  Dues increases for calendar year 2025 haven't been announced yet.
I really am clueless about club 'ownership' structures. What does member-owned, non-equity mean? If members don't have equity who does? If you get assessed on non-equity isn't that really saying your initiation is subject to change?


At least in our case, “member owned” means that full members have voting rights to elect a Board of Directors.  There is a General Manager hied by the board who runs the club on a daily basis, and who at least technically answers to the board; the GM hires, supervises, and fires all club personnel without interference from the board or members. There are also a variety of committees that oversee various aspects of the club’s activities. The club bylaws specify which particular issues must be voted on by the members, such as capital improvements, borrowing, etc.

The only meaning of “non equity” is that there are no shares of ownership to be bought or sold as there are at some equity clubs, and that when a member leaves, the club does not have to refund any part of whatever initiation fee that member paid.


That’s a very brief and incomplete overview; I could dig into our bylaws and other documents if you have specific questions.
« Last Edit: November 06, 2024, 08:01:57 PM by A.G._Crockett »
"Golf...is usually played with the outward appearance of great dignity.  It is, nevertheless, a game of considerable passion, either of the explosive type, or that which burns inwardly and sears the soul."      Bobby Jones

Carl Johnson

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #36 on: November 07, 2024, 08:40:30 AM »
Our private member-owned (nonequity) club just jumped initiation from $40,000 to $65,000 paired with an assessment of $18,750 to existing members (reduced for members over age 65, etc.).  We lost about 50 of 500 members as a result of the assessment, but had no trouble at all filling those spots from the wait list, so I have heard.  Plenty were in line who were willing to go the full Monty.  The assessment and initiation kick up were to pay for a new clubhouse and some golf course infrastructure improvements (e.g., irrigation systems).  What will be telling is how the dues increases (decreases not expected) go over the coming years, but as someone once said, predictions are hard to make, especially about the future.  Dues increases for calendar year 2025 haven't been announced yet.
I really am clueless about club 'ownership' structures. What does member-owned, non-equity mean? If members don't have equity who does? If you get assessed on non-equity isn't that really saying your initiation is subject to change?


A.G.'s response immediately above pretty well sums it up for my club too.  Regarding "who has equity?": The club is a nonprofit under state corporate law and a 501(c)(7) exempt organization for federal income tax purposes.  There is no ownership of "shares" as in a regular business corporation, no shareholders.  You don't get anything back if you leave, and you can't sell your membership interest.  Assessments really are like saying your initiation is subject to change.  And if you don't want to pay the assessment, you must leave the club with no legal recourse.  In a sense, "member-owned" is misleading to the extent it implies equity.  "Member-controlled" might be a better description than "member-owned."

Buck Wolter

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #37 on: November 07, 2024, 09:43:27 AM »
Our private member-owned (nonequity) club just jumped initiation from $40,000 to $65,000 paired with an assessment of $18,750 to existing members (reduced for members over age 65, etc.).  We lost about 50 of 500 members as a result of the assessment, but had no trouble at all filling those spots from the wait list, so I have heard.  Plenty were in line who were willing to go the full Monty.  The assessment and initiation kick up were to pay for a new clubhouse and some golf course infrastructure improvements (e.g., irrigation systems).  What will be telling is how the dues increases (decreases not expected) go over the coming years, but as someone once said, predictions are hard to make, especially about the future.  Dues increases for calendar year 2025 haven't been announced yet.
I really am clueless about club 'ownership' structures. What does member-owned, non-equity mean? If members don't have equity who does? If you get assessed on non-equity isn't that really saying your initiation is subject to change?


A.G.'s response immediately above pretty well sums it up for my club too.  Regarding "who has equity?": The club is a nonprofit under state corporate law and a 501(c)(7) exempt organization for federal income tax purposes.  There is no ownership of "shares" as in a regular business corporation, no shareholders.  You don't get anything back if you leave, and you can't sell your membership interest.  Assessments really are like saying your initiation is subject to change.  And if you don't want to pay the assessment, you must leave the club with no legal recourse.  In a sense, "member-owned" is misleading to the extent it implies equity.  "Member-controlled" might be a better description than "member-owned."


The more you know
Those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience -- CS Lewis

Rob Marshall

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #38 on: November 07, 2024, 12:43:39 PM »
Our private member-owned (nonequity) club just jumped initiation from $40,000 to $65,000 paired with an assessment of $18,750 to existing members (reduced for members over age 65, etc.).  We lost about 50 of 500 members as a result of the assessment, but had no trouble at all filling those spots from the wait list, so I have heard.  Plenty were in line who were willing to go the full Monty.  The assessment and initiation kick up were to pay for a new clubhouse and some golf course infrastructure improvements (e.g., irrigation systems).  What will be telling is how the dues increases (decreases not expected) go over the coming years, but as someone once said, predictions are hard to make, especially about the future.  Dues increases for calendar year 2025 haven't been announced yet.
I really am clueless about club 'ownership' structures. What does member-owned, non-equity mean? If members don't have equity who does? If you get assessed on non-equity isn't that really saying your initiation is subject to change?


A.G.'s response immediately above pretty well sums it up for my club too.  Regarding "who has equity?": The club is a nonprofit under state corporate law and a 501(c)(7) exempt organization for federal income tax purposes.  There is no ownership of "shares" as in a regular business corporation, no shareholders.  You don't get anything back if you leave, and you can't sell your membership interest.  Assessments really are like saying your initiation is subject to change.  And if you don't want to pay the assessment, you must leave the club with no legal recourse.  In a sense, "member-owned" is misleading to the extent it implies equity.  "Member-controlled" might be a better description than "member-owned."


If the club decided to sell to a developer the members would get any cash after paying off any outstanding mortgages. So member owned isn't misleading imo. We don't have shares but we call it certificates. Only certificate holders can vote. Junior members and spouses are not certificate holders. There can only be one per membership.


Equity vs non equity is still member owned. Non equity just gets nothing back if they leave the club.


Way back in the day, more clubs were equity. I remember when Florida had an intangibles tax, the equity clubs would annually provide members with the value of their membership interest and it had to be included on the individuals intangibles tax return.
If life gives you limes, make margaritas.” Jimmy Buffett

DFarron

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #39 on: November 07, 2024, 02:58:29 PM »
All the clubs in Boise are non-equity with rather stout initiation fee given the location and quality of courses.

Carl Johnson

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #40 on: November 07, 2024, 03:14:52 PM »
Following up on Rob Marshall, reply 38.  Here's what our Bylaws say on the subject of ownership and dissolution:


"No Interest in Assets. Only Resident Members, Senior Members and the Primary Designees of Corporate Memberships shall have any interest whatsoever in the assets of the Club. Provided, however, that the interest of Resident members, Senior Members and the Primary Designees of Corporation Memberships in the assets of the Club shall arise only upon the liquidation and dissolution of the Club and shall arise only to Resident Members, Senior Members and Primary Designees of Corporate Memberships in good standing on the date of adoption of a plan of liquidation and dissolution."


Interestingly the bylaws do not say exactly how the net assets would be allocated among the eligible members.  However, this is of no concern to me personally because the chances of dissolution and liquidation during my lifetime as a member are, in my opinion, none.

Wayne_Kozun

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #41 on: November 07, 2024, 11:31:57 PM »
Way back in the day, more clubs were equity. I remember when Florida had an intangibles tax, the equity clubs would annually provide members with the value of their membership interest and it had to be included on the individuals intangibles tax return.
Isn't that kind of like a wealth tax that includes unrealized capital gains, proposed by the likes of Elizabeth Warren?

Rob Marshall

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #42 on: November 07, 2024, 11:46:42 PM »
Way back in the day, more clubs were equity. I remember when Florida had an intangibles tax, the equity clubs would annually provide members with the value of their membership interest and it had to be included on the individuals intangibles tax return.
Isn't that kind of like a wealth tax that includes unrealized capital gains, proposed by the likes of Elizabeth Warren?


I would say so but we’re going back almost 40 years to when I first became a CPA. You paid a tax on your stocks and bonds and I remember we included equity club memberships. It was a Florida tax not Federal.
If life gives you limes, make margaritas.” Jimmy Buffett

Rob Marshall

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #43 on: November 07, 2024, 11:48:35 PM »
Following up on Rob Marshall, reply 38.  Here's what our Bylaws say on the subject of ownership and dissolution:


"No Interest in Assets. Only Resident Members, Senior Members and the Primary Designees of Corporate Memberships shall have any interest whatsoever in the assets of the Club. Provided, however, that the interest of Resident members, Senior Members and the Primary Designees of Corporation Memberships in the assets of the Club shall arise only upon the liquidation and dissolution of the Club and shall arise only to Resident Members, Senior Members and Primary Designees of Corporate Memberships in good standing on the date of adoption of a plan of liquidation and dissolution."


Interestingly the bylaws do not say exactly how the net assets would be allocated among the eligible members.  However, this is of no concern to me personally because the chances of dissolution and liquidation during my lifetime as a member are, in my opinion, none.


I agree Carl, odds are slim but if I remember correctly there was talk of it happening to clubs in the Toronto area on this board I think.
If life gives you limes, make margaritas.” Jimmy Buffett

Carl Johnson

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #44 on: November 08, 2024, 08:55:53 AM »
Following up on Rob Marshall, reply 38.  Here's what our Bylaws say on the subject of ownership and dissolution:


"No Interest in Assets. Only Resident Members, Senior Members and the Primary Designees of Corporate Memberships shall have any interest whatsoever in the assets of the Club. Provided, however, that the interest of Resident members, Senior Members and the Primary Designees of Corporation Memberships in the assets of the Club shall arise only upon the liquidation and dissolution of the Club and shall arise only to Resident Members, Senior Members and Primary Designees of Corporate Memberships in good standing on the date of adoption of a plan of liquidation and dissolution."


Interestingly the bylaws do not say exactly how the net assets would be allocated among the eligible members.  However, this is of no concern to me personally because the chances of dissolution and liquidation during my lifetime as a member are, in my opinion, none.


I agree Carl, odds are slim but if I remember correctly there was talk of it happening to clubs in the Toronto area on this board I think.


Two factors at play here.  Our club seems strong right now, but more important, I am really, really old so not many years of membership left.  On the other side, debt looms.

Wayne_Kozun

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #45 on: November 08, 2024, 06:31:21 PM »
I agree Carl, odds are slim but if I remember correctly there was talk of it happening to clubs in the Toronto area on this board I think.
There was one Toronto club that did this a few years ago - York Downs.  And Beacon Hall was very close to doing this - and that would be a big loss as they have an excellent course.

Chris Hughes

  • Karma: +0/-0
Re: Private Club Rate Raise New
« Reply #46 on: November 10, 2024, 01:18:02 PM »



Great post; thank you.


My club (member owned) went through a very lengthy and very careful process in 2022 and 2023 to determine the next steps for both facilities upgrades and improvements.  The determination was made that there would be a bunker renovation, a new pool and pool house to replace the original ones from 1966, and 4 dedicated pickleball courts.  (The pool/pool house and bunkers were much more deferred maintenance than just capital improvements.)


There was a $4k per membership unit assessment, and the bunker work, which required no permitting, proceeded last winter. The financing of the project also included a $50/month dues increase that would take effect when the demo on the existing pool began.


By the time we closed the pool for the season and had all the permits in place to begin that work, costs had gone up so much that the club had to borrow an extra $1 million and change above the projections from just a year earlier.


All of this has happened at an extremely well-run and financially healthy member-owned club.


As a %, how much was the $1,000,000 overage vs. the original estimate?


The additional $1m was a 20% increase on the entire project, including the bunkers.  The original projection was made in early 2023.




Thanks A.G..

If $1M constitutes a 20% overage it implies $5,000,000 for the entire project.

IMO the bunker costs should be put aside when evaluating how large the "overage" really is -- I'd bet the estimate there was right on the money and bunkers did not add to the overage.  In fact, I'd take the pickle-ball courts out too, those are simple to build.

For this exercise let's assume the combined bunker/paddle expenditure was $850K, this leaves $4.15M for the balance of the project (all unrelated to golf course).

$1M over would then imply a 24% whiff.

My construction/architect friends tell me budgeting in a 15-20% "contingency" is customary for commercial projects and given the times 25% probably isn't a bad idea. 

If your management/board had a contingency of 20% budgeted that would have covered $830K of the overage and while the $1M extra wouldn't be a pleasant development, it really would not have been a surprise (but it does sound like they were caught off-guard). 

If they only had a 5% contingency budgeted in, or none at all, they are probably due for a long look in the mirror as well as a critical discussion about the "consultants" who are/were advising them.

A $4M pool-facility kind of sounds like a 2nd clubhouse, will be interesting to see how the carrying/staffing costs develop over time vs. the increased revenues the consultants have surely promised.  If your place offers "pool-only" type memberships it might just work out!


« Last Edit: Today at 12:24:59 AM by Chris Hughes »
"Is it the Chicken Salad or the golf course that attracts and retains members ?"

A.G._Crockett

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #47 on: November 10, 2024, 04:54:43 PM »



Great post; thank you.


My club (member owned) went through a very lengthy and very careful process in 2022 and 2023 to determine the next steps for both facilities upgrades and improvements.  The determination was made that there would be a bunker renovation, a new pool and pool house to replace the original ones from 1966, and 4 dedicated pickleball courts.  (The pool/pool house and bunkers were much more deferred maintenance than just capital improvements.)


There was a $4k per membership unit assessment, and the bunker work, which required no permitting, proceeded last winter. The financing of the project also included a $50/month dues increase that would take effect when the demo on the existing pool began.


By the time we closed the pool for the season and had all the permits in place to begin that work, costs had gone up so much that the club had to borrow an extra $1 million and change above the projections from just a year earlier.


All of this has happened at an extremely well-run and financially healthy member-owned club.


As a %, how much was the $1,000,000 overage vs. the original estimate?


The additional $1m was a 20% increase on the entire project, including the bunkers.  The original projection was made in early 2023.




Thanks A.G..

If $1M constitutes a 20% overage it implies $5,000,000 for the entire project.

IMO the bunker costs should be put aside when evaluating how large the "overage" really is -- I'd bet the estimate there was right on the money and bunkers did not add to the overage.  In fact, I'd take the pickle-ball courts out too, those are simple to build.

For this exercise let's assume the combined bunker/paddle expenditure was $850K, this leaves $4.15M for the balance of the project (all unrelated to golf course).

$1M over would then imply a 24% whiff.

My construction/architect friends tell me budgeting in a 15-20% "contingency" is customary for commercial projects and given the times 25% probably isn't a bad idea. 

If your management/board had a contingency of 20% budgeted that would have covered $830K of the overage and while the $1M extra wouldn't be a pleasant development, it really would not have been a surprise (but it does sound like they were caught off-guard). 

If they only had a 5% contingency budgeted in, or none at all, they are probably due for a long look in the mirror as well as a critical discussion about the "consultants" who are/were advising them.

A $4M pool-facility kind of sounds like a 2nd clubhouse, will be interesting to see how the carrying/staffing costs develop over time vs. the increased revenues the consultants have surely promised.  If your place offers "pool-only" type memberships it might just work out!


Chris,


Some of your assumptions are spot on, others might not be.  The initial number on the total project was in fact $5m, and I think separating the bunker project from the overage is likely correct; that piece came in slightly ahead of schedule.  I can’t really speak to the involvement of the pickleball courts in the overage, but you may well be right there as well.  There is, however, an unusual amount of site work involved for the pickleball courts because they are partially on the site of the existing pool area.


Without question, the pool and pool house make up not only the majority of the total cost, but also, of course, the overage.  But it’s not so much that the project is overly grandiose; it’s just a complicated process.  The old pool and pool house have to be completely demoed, plus the new facilities are somewhat west of the current site, so there is extensive site work on both spots.  That involves a LOT of subcontractors, and they are working in as competitive a market as anywhere in the country, so premium prices have become the order of the day here.


(I should add that a new pool and pool house were OVERWHELMING the highest priority item in a member survey that preceded the project itself; I’ve never even been to the pool, and don’t anticipate going.  But I DO understand the role of a top quality pool facility in the profile and life of a country club.)


There were two major issues involved in the overage; the unexpected discovery of asbestos in the existing pool house, and inflation and supply chain issues here in the Triangle along with significantly higher interest rates.  The Triangle, and perhaps especially Durham, has continued to experience rapid growth and heavy construction demand, and our contractor got much higher estimates from subcontractors than we had anticipated a year earlier when we priced out the conceptual plans with a top shelf consulting firm.  We aren’t the only club in the area that has found all of this to be an issue, fwiw.


The good news here is that both our Master Planning Committee and the Building Committee are comprised largely of individuals who have done all of this sort of thing professionally, so they aren’t just winging it on cost estimates. We have bankers, builders, developers, and ven the guy who oversaw the “renaissance” of downtown Durham.  At every step, they’ve been completely transparent with the membership, and I don’t think there’s any significant portion of the membership that questions their work. 



"Golf...is usually played with the outward appearance of great dignity.  It is, nevertheless, a game of considerable passion, either of the explosive type, or that which burns inwardly and sears the soul."      Bobby Jones

Chris Hughes

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #48 on: November 11, 2024, 03:07:19 PM »




"top shelf consulting firm" & "24% whiff" are mutually exclusive...



« Last Edit: November 11, 2024, 03:44:10 PM by Chris Hughes »
"Is it the Chicken Salad or the golf course that attracts and retains members ?"

Carl Johnson

  • Karma: +0/-0
Re: Private Club Rate Raise
« Reply #49 on: November 11, 2024, 07:08:34 PM »
All the clubs in Boise are non-equity with rather stout initiation fee given the location and quality of courses.


Do you know what the initiation fee is at Crane Creek, for example?  It looks like it would be a nice Boise private.

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