Visitors green fees at Private Clubs?

[John Kavanaugh]

John,

I think RJ is being descriptive, adding detail, we teach our kid's to do that in their english classes, I think it is not racists, rather it reflects the successful upbringing of RJ and should be a compliment to his parents. 

Kelly,

Here is RJ's quote once more "I understand the Japanese guy that "owns" Riviera makes the rules and even decides who gets to remodel the course, etc."...Substitute Japanese with Jewish, Black, woman or any other minority that has commonly been oppressed in golfing society and see how it reads.  Am I just imaging the Asian stereotypes held by most American golfers?  Given that the growth of the game seems to lie in Asia should we continue to stand for this type of thinking?  As I have traveled the country I have seen a disturbing trend arising where golf courses are being segregated as Asian and Non-Asian...I don't understand why this one brand of hate is so acceptable.  note:  As an engineer who loves to play poker I have spent many hours of my life as the only white guy at the table.  I guess I am biased towards people with whom I have so much in common.

John,
Asian-based memberships have been around quite a while.  Why?  I am not certain.  I was in communication with a Korean who wanted to buy a club in the NY metropolitan area for the purpose of creating Korean based membership.  I am working at a club that originally was going in that direction but opted for another alternative.  The club where I played in Houston took in about 24 japanease members, but found that they would have no interaction with the other members and scheduled a block of tee times each Saturday only for themselves, never inviting other non-Japanease members to join them.  Eventually the owner gave back their initiation fees and ask them to leave.  Racists, biaest or not?  We don't know for sure.  My point is that you are more than willingly to claim someone is a racist without really knowing.  In my view that's dropping the bomb on someone and in RJ's case you have no basis for making that accusation.  you care more about Asians than you do about RJ and that is not fair.  Race (gender, religion, etc) Matters, ask Cornell West, and not just the color of your skin or the part of the country you come from, that is stereo typing because not all blacks, or asians think the same way they all have different experiences so you should not lump them all into a neat little category.  

Are we forcing the Koreans into the same position we forced the Jews into 50 or more years ago.  We got some nice clubs out of that deal but is hate ever good for golf?  Are the Koreans the new Jews?

[Dan Herrmann]

Remember - the topic is Guest Fees!

[John Kavanaugh]

Remember - the topic is Guest Fees!

Not quite...It is so much about keeping people you do not want off of your course.  Or, like in Europe, charging 10 times the going rate to a bunch of rubes so you can play on the cheap.

[Ed Oden]

With ANGC and The Masters, the fact is they are two separate legal entities and the monies derived from the Masters tournament may not excessively flow into and inure to the benefit of the members of ANGC exclusively. The Masters Tournament entity is a separate charitable entity.

Do clubs that hold regular tour events or other majors also take the dual entity approach?  

Apples and oranges as ANGC owns and conducts The Masters.  Most Tour events are run by non-for profit entities that lease the course for the week.  The other majors are the same as the USGA (for this year) has an agreement with the City of San Diego (as owners of Torrey Pines).  

I understand.  But clubs are paid for hosting tournaments, whether in the form of lease payments or other arrangements.  For example, Westchester was paid $1.1 million as a buyout for this year's Barclays.  I would think these could exceed the 15% threshold by themselves.  So I was just wondering if clubs account for income from regular tour events through a "seperate entity".

[Dan Herrmann]

John - not exactly.  Anybody that joins me has a fee of about $70.  Non-accompanied folks pay a lot more.

Anybody can play our course easily if you know a member and he/she invites you.  Or, we have a number of Monday outings, which are open to all.   

As a club decidedly outside the top 1%, I think we've very typical of what you see in the USA.

How does Canada handle things?  From what I understand, they're more like the States than Europe in this regard.

[John Kavanaugh]

John - not exactly.  Anybody that joins me has a fee of about $70.  Non-accompanied folks pay a lot more.

Anybody can play our course easily if you know a member and he/she invites you.  Or, we have a number of Monday outings, which are open to all.   

As a club decidedly outside the top 1%, I think we've very typical of what you see in the USA.

How does Canada handle things?  From what I understand, they're more like the States than Europe in this regard.

So what?  Where can't you play easily if a member invites you?

[Will MacEwen]

How does Canada handle things?  From what I understand, they're more like the States than Europe in this regard.

I have been told that clubs in British Columbia have to make themselves available to some public play, but do not advertise the fact and set the rates quite high.  It has something to do with land use and some old dusty statute.  I can't be sure as the esteemed gentleman who told this to me is no longer.

Bob Jenkins should be able to correct or illuminate my ramblings.

In general, Canada is more like the US, although I think it is generally a little easier to get on the exclusive courses. 

[Eric Smith]

I think Osama Obama and Hillary may have a platform here: guaranteed health care insurance, guaranteed mortgage rate and guaranteed access to nearest top 100 private club!  One out of three ain't bad.....isn't that a Meatloaf song?

Going back a page or two in regards to Mr. Daley's reference to Riviera, but with Mike's subtle dig (above) .  Is Mike just being descriptive?  I think not.  I'm sure it was a typo. Right Mike?

[Dan Herrmann]

John - Would you set up a system similar to British Columbia (thanks for the info Will) here in the States?

[Will MacEwen]

John - Would you set up a system similar to British Columbia (thanks for the info Will) here in the States?

That info is second hand from a dead guy and not easy for me to verify at this time. 

[John Kavanaugh]

John - Would you set up a system similar to British Columbia (thanks for the info Will) here in the States?

You will have to explain that model before I can answer.  I will say that many private courses have a style of architecture and maintenance that is too fragile to handle outside play from unaccompanied visitors.  I am a member of such a course and would hate to see slower greens, fewer hazards and zoysia fairways just so anybody with a wad of cash can play.  This Saturday we allowed carts out on the fairways because you can trust the members to treat the course as if they owned it...We could not do that if we were a wad receptacle.

[Patrick_Mucci]

Ed Oden,

You can't compare a local private club to a club that hosts a PGA event.

As to the allotment of revenue for PGA events, it was my understanding that a good deal of the revenue goes into capital improvements for the event and as such, is excluded from the 15 %.  Someone more familiar with accounting for PGA events would know better.

The buy-out payment might be charged to a differently category.

You should also know that Westchester is a huge operation, 36 holes, Tennis, Swimming, with hundreds, if not in excess of a 1,000 members (including family members), complete with a hotel and other facilities.

Their annual operating budget could be well in excess of $ 7,000,000

[Jeff Goldman]

Patrick,

Is Westchester a 501(c)(7) non-profit?  I had thought that the host of a yearly pga event would have a hell of a time maintaining its exemption without a ruling by the IRS or very careful management of other outside income.  The IRS does provide an exception for occasional "windfalls" of income like hosting a US Open, but it is hard to see how that could apply to holding a yearly PGA tourney.  I think it would likely count against the 15% gross receipts limit, regardless of whether it is balanced by losses or capital expenditures.  The expenses or capital expenditures could limit the tax paid on the tourney income (which could be due in any event as UBTI), but I don't think it would act to safeguard the status of the club.  Thanks.

Jeff
 

[erichunter]

Ed Oden,

You can't compare a local private club to a club that hosts a PGA event.

As to the allotment of revenue for PGA events, it was my understanding that a good deal of the revenue goes into capital improvements for the event and as such, is excluded from the 15 %.  Someone more familiar with accounting for PGA events would know better.

Not sure why Westchester would be any different than Knollwood, Quaker Ridge, Winged Foot or any other courses in the county.  The IRS doesn't care if you host a PGA TOUR event or an MGA event.

So if a club that doesn't host a PGA TOUR event takes all the income from outside play and devotes it to capital improvements for the sake of a local association tournament (instead of a TOUR event) the income wouldn't be charged to the 15% cap?

[Doug Ralston]

John - Would you set up a system similar to British Columbia (thanks for the info Will) here in the States?

You will have to explain that model before I can answer.  I will say that many private courses have a style of architecture and maintenance that is too fragile to handle outside play from unaccompanied visitors.  I am a member of such a course and would hate to see slower greens, fewer hazards and zoysia fairways just so anybody with a wad of cash can play.  This Saturday we allowed carts out on the fairways because you can trust the members to treat the course as if they owned it...We could not do that if we were a wad receptacle.

John;

Now I am ashamed. I think I left a body-sized unraked area in that right-side bunker on #15! 

Doug

[RJ_Daley]

Geez, I forgot I even posted to this thread and when I saw it went 6 pages thought I'd look in, and then was shocked that my name was used in context that I'm a racist because I couldn't remember the name of that Japanese fellow that 'owns' Riviera, that I'd seen a number of references to over the years from the many discussions that ensued about him arbitrarily having Fazio alter architecture, and being referred to as a bit of a tyrannt in matters of ruling the club.  But, then I realised that what had happened was that I was tarred with the broad brush of "implying" from that innocuous description of the guy that runs Riviera, that I am surely a racist for using that description.  WOW, you guys must be so afraid of any of my social opinions on the other thread, that you have to resort to making that leap of calling me a racist for describing a guy as "Japanese". 

Then, after I made clear from my opening statement that I am all for private clubs remaining just that, private, I entered into areas I clearly stated "here is where it gets tricky for me is what is truly a "private" club, and what are the tax exempt benefits for being not-for-profit private in the totally exclusive sense."

Well holy crap, excuse me for asking any questions.  Pat Mucci tried to be nice and informative to call to my attention where he thought I might be misinformed about "tax exempt" because I did ask if there is some conflict with the concept of a Privelege of being tax exempt and stating "off the tax rolls"   I misstated that, and realise now that I was wrong to assume that these clubs don't pay ANY REAL ESTATE TAXES.  Sorry, for my ignorace, even though I asked about this, not declared that it was factual. 

My entire post was asking folks that know, and wondering how the relationship works with a club that is 'not-for'profit' referred to as such as 'tax-exempt' and further what the relationship is with members concerning equity members vis-a-vis rights to deeds ownership of the property of the club, and rules making. 

I implied that I can think of a few things where a private club is granted 'priveleges' by government.  They can be given permits to do things with environmental impact, they can be given diverse zoning, and can be evaluated for taxation of real estate on varying models.  I ask; is that correct?  If it is so, does that have any baring on if it is truly so private that it can make any rules that might be contrary to public policy. 

Shockingly, I think they can make their own rules despite granting of various governmental permits to varying public common resources, like access to the regional aquifer as one example. 

I'm willing to learn how private clubs operate because I am in the dark here. 

I asked questions here, and feel sorry for cheapshotters that want to tar me as racist, or imply that my views on serious public policy matters like our rights as citizens to define healthcare as a fundamental right to pass legislation over, is that scary or threatening to some of you.  Sorry to scare you Corey.  But, was I swiftboated for my other views that I thought I had a right to express?  Next, you guys will have me going to meetings of the communist party.   

[John Kavanaugh]

Dick,

If some Japanese guy bought Wild Horse would it concern you more than if Mr. Pascucci decided to invest?  Do you have any negative sterotypes toward Asian golfers or ownership? Since your post both Lou and Kelly have come to your defense saying that Asians refuse to play with white people...Is that true?  I think you have a problem with Asians buying the great courses in this country...Am I wrong?

[James Bennett]

Does the 'tax-break' provide benefits to the US Club apart from paying tax on profits?  I can't imagine a club that builds its budget 60% from member subs and 40% from green fees to meet its 100% expenditure having any 'profit' which would require any significant  income tax to be paid.

Of course, if the club was 'for profit', well .......

In Australia, our member-owned clubs do not pay income tax.  But, we do pay rates and taxes to the local council, all employee related costs such as workers compensation levies and we also pay 10% GST (similar to VAT and sales tax but on everything, including subs, beers, food and comp fees).

I also accept that it is the Club's choice as to their openess to visitors.  I do not understand the difference in pricing that occurs between locals, nationals and foreigners that occurs in many places (including Australia).  It reminds me of trying to buy a gelati at the Leaning Tower of Pisa.  The locals always seemed to get a triple cone for the price a tourist paid for a single cone.  And apparently, that is fine, even when it comes to golf fees.  Of course, it isn't racist (locals can be any race, as are foreigners) so thats ok!   

James B

[corey miller]

Dick

To be fair you also  wrote  "then promulgate a totally exclusive atmosphere to be arbitrary and capricious in who they allow to use the facility that uses public resources of water".  

Can they shut off the electricity also?  

I would argue they should receive the same treatment of any other not for profit in the area.  Nothing more, nothing less.  Sadly, local governments are more political than that.

[RJ_Daley]

JK, you are uttlely wrong.  I wouldn't like to see any individual buy WH or any other facility previously open to the public community enjoyment and then shut it down to only an exclusive group, whether that group was mono ethnic, or whatever.  But, if a fellow did, I don't care what ethnic group he is from, if he owns it, he can do it if it is his private entity, in my view.  But, I don't have to like it... 

Corey, good question.  I was asking the question as well.  I don't know.  I am not about to do a semester of study trying to find the balance of the public's ownership of a publicly legally regulated utility, and how that plays in with a private golf club, owned essentially by an individual, who makes all the rules of the club. 

But, while I also don't know much legally about water ground resources and ownership, I do know that there are strict regulation to access to that water that can be imposed by the lawful authorities, State, County, or Federally, depending on where the water is located.  It is a question I have, whether an individual owner of a club granted the privelege of not-for-profit status, and receiving some access by one means or another to a common resource that is regulated by some entity of the public's government, can be completely arbitrary in exclusivity to access to that private facility and make absolute rules on the facilities governance/operations.  I repeat; I don't know, and you shouldn't be scarred that I don't know and ask? 

[Lou_Duran]

'Regarding Asian golf, I've had some experience with that at a couple clubs in Texas.  Invariably, they let it be known to the pro shop that they did not want other people to join them and largely kept to themselves."

JK,

Above is what I said.  I don't necessarily think that Asians discriminate on the basis of color.  It might be as simple as prefering to play exclusively with their friends or maybe just a certain shyness due to language and cultural differences.  As a partial correction to my statement, one group did include a caucacian member who I never saw play with any other members.

I openly admit some bias toward Orientals on the golf course largely as a result of numerous experiences playing behind very slow groups.  I tend to be impatient with slow players of all stripes, and, unfortunately, it is too easy and unfair to generalize.  Something more for me to work on.     
 

[John Kavanaugh]

Dick,

saying that Asians refuse to play with white people..Am I wrong?

John, your stereotyping, I spoke only of 24 persons in Houston, don't assume this is true for an entire race.  I don't. Your not wrong, your just cut straight from the mold from which Al Sharpton came from...you can't help yourself.  You purposely take someone's statement and assign assumtions to it....you are the worst kind of evil in this world.  Well not really, but your on the paved road toward it!

24 people in Houston were removed from a club because they enjoyed playing with people of their own race.  How did I know that they weren't white?  Racism is a strong word when it is so clowded in ignorance and tradition.  I don't blame Dick for his views of Riviera and how a "tyrant" hired Fazio when he could have hired an untested Geoff Shack..I think Dick is just a bit naive and believes too much of what he reads.  I will say today is the first time I have heard a benevolent dictator called a tyrant.  I guess a dictator is easier to swallow if he looks like his subjects.

On my views, perhaps the ole school yard saying of "It takes one to know one" needs to be played.

[Mike Erdmann]

Let's be honest here.  Do we really think that the tax and liability issues are the reasons that private clubs are very restrictive about outside, unsponsored play?  Me thinks that if there was no tax or liability issues to allowing more play, the vast majority of high-end clubs wouldn't change their outside play policies one bit.

Now, let me say that I completely support a private club not allowing or greatly restricting outside play if they so choose.  That's one of the advantages of a private club....you pay dues so that when you go to the club, you know the others there, you know you won't have a problem getting on, and you know that those playing the course are more apt to take care of it because they have a sense of ownership. 

The tax and liability reasons are valid justification for closed-door policies, but I don't think they are the true reasons for these policies.

[Patrick_Mucci]

Not sure why Westchester would be any different than Knollwood, Quaker Ridge, Winged Foot or any other courses in the county.  The IRS doesn't care if you host a PGA TOUR event or an MGA event.

Knollwood, Quaker Ridge and Winged Foot don't run a hotel and other enterprises as Westchester does, and as such, their corporate structure and accounting practices may be different from the other clubs.[/color]

So if a club that doesn't host a PGA TOUR event takes all the income from outside play and devotes it to capital improvements for the sake of a local association tournament (instead of a TOUR event) the income wouldn't be charged to the 15% cap ?

Revenue from outside play, not associated with a specific event, would be general and not dedicated revenue.

I believe that the revenue from the event hosted must be earmarked for capital improvements associated with that specific event in order to be excluded from the 15 % revenue cap..[/color]

[Patrick_Mucci]

Let's be honest here.  Do we really think that the tax and liability issues are the reasons that private clubs are very restrictive about outside, unsponsored play ?

Mike, I think those can be the primary as well as the secondary issues.

The issue of not running afoul of being declared a "pubic" facility is also a major issue.

But, those aren't the only issues.
Member inconvenience, liability and others come into play along with the ones mentioned above. 

My guess is that, members of a private club that was having financial problems would opt for increased dues before opening the club up to outside play. 

Some clubs gain considerable revenue from outside play, accompanied and unaccompanied.  I know a good number of members who joined a particular club because they permit unaccompanied guests.  However, these guests must be sponsored by a member.

I don't know any member of a private club that would opt to open their club up to play by total strangers not affiliated in any manner, shape or form with a current member.

I think guest play, including unaccompanied guest play is a plus for a club and it's members, provided it's properly regulated and doesn't inconvenience the membership in any way.[/color]

Me thinks that if there was no tax or liability issues to allowing more play, the vast majority of high-end clubs wouldn't change their outside play policies one bit.[/b][/color=green]

I know for a fact that that's not true at a number of clubs.
The concern over being classified as a "public" facility is a huge concern, one that strikes to the very core of clubs.[/b][/color]

Now, let me say that I completely support a private club not allowing or greatly restricting outside play if they so choose.  That's one of the advantages of a private club....you pay dues so that when you go to the club, you know the others there, you know you won't have a problem getting on, and you know that those playing the course are more apt to take care of it because they have a sense of ownership. 

The tax and liability reasons are valid justification for closed-door policies, but I don't think they are the true reasons for these policies.

The concern over being declared a "public" facility can't be minimized.
It's a huge concern.  The club's liquor license and every other license is put at risk.

And, today, with so many clubs encountering financial difficulty, you can't ignore or minimize the financial consequences of a club losing it's not for profit status, and/or incuring liabilities that they didn't have to expose themselves to .[/color]