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

[Michael Herrmann]

Last night I attended my first meeting of a 3 year commitment to be on our club's Board of Directors.  Over the last couple of months talk has begun on whether it would be a good idea to generate more specifics and potentially bring a vote to the membership next year on a potential new clubhouse or an extensive remodel and addition to our existing structure, which is approximately 30 years old.  Let me give some background on the current state of the club:

Club opened in 1960 in the suburb of a Midwestern city, Bill Diddel designed course, founded on the principal of being a golf club only for those who simply enjoy the game and camaraderie of a private club.  I would take an educated guess that the demographic of the club is younger now than maybe at any other time in our existence, and we continue to maintain a no frills approach to private golf.  There are not any "golf club only" options within a 15 mile radius of our club, the only 2 privates within that area are full scale country clubs, neither of which are currently at full membership.  Our club has never not been full (350) since my dad joined in 1983, and currently we have approximately 25 on our waiting list.  Our dues are very reasonable for a private club and approximately 1/2 of the two closest clubs I mentioned. We enjoy good not great golf and the pleasure of hanging with our fellow members.

As there are currently no real major issues with other aspects of the club, talk has started to turn towards looking at what is our "weakest link" and there is some initial show of support for doing something with the clubhouse.  At our annual meeting in October, a straw poll was taken of the 75 members in attendance (admittedly a small size sample in my opinion.)  The results were 47% in favor of potential new clubhouse, 35% in favor of major renovation and expansion, 18% do nothing.  Mind you, no specific costs were associated with either of those plans.  Over the next 1-2 months we are expecting a couple of the Board members to have rough estimates of costs and plans of what could be done in either scenario.  There is room to build new about 70-80 yards left of the existing clubhouse but it may not be the ideal spot.  And obviously a major renovation and expansion of the existing building would render it useless for the duration of that option.

Our clubhouse certainly has some shortcomings, the kitchen is far from what would be described as pleasant to work in and our pro shop needs some extra space.  The outdoor deck could use an expansion and the building itself will be due for a new roof and HVAC upgrades very soon.

I don’t have enough information yet to have a strong opinion on any of the options, but I’m sure others on this site have experienced similar situations.  Often times there have been discussions of how going into debt on non course related items has been detrimental to a club’s long term financial health.  My question is does anyone have success stories in this arena to share or lessons learned from something they have experienced?  One of my big concerns obviously is that even if it comes to light that a solid majority of the members support a major project, surely we will have some members drop out.  What if our wait list went from 25 to 5 in a year and those that were left wouldn’t be interested in any major spending on the course for the next 10+ years?

Appreciate any and all thoughts on the subject.

[Adrian_Stiff]

I think it difficult to tell someone how to spend their money. Collectively you know how important it is that something needs to be done and without seeing figures hard to know the best route renovate or new. New can be cheaper, could the new building be the clubhouse and the old be converted to something else, perhaps later? Hotel, apartments? Not knowing planning law to that area makes those suggestions possibly stupid of course, but too many unknowns really to cast a proper opinion.

I agree 75 is a small sample, 18% nayeers means 14 want to do nothing and 61 do something, but 275 were not sampled or did not cast a vote? if they did not cast, it would seem to me that the stronger opinions to do something came out in the first sample. Consulting the 350 may produce different percentages. Was it a random 75 or cherry picked?  Lots of questions and answers needed!!

[John Kavanaugh]

What kind of person even goes to board meetings and why would you believe anything they say?  I've never known happy people or people not looking for change to show up.  If you need to take a vote it most likely doesn't need to be done.

Members are like children.  Never ask a question unless you already know the answer.

[Brent Hutto]

Sounds like it's the only financially healthy golf club in the area and they're dying to fix that. But seriously...there is presumably some connection between being "golf only" and being the only fully subscribed club in town. Borrowing a bunch of money to spend on a totally non-golf-only white elephant of a clubhouse sounds to me like pure folly.

Absolute best case? The existing members have a bigger, nicer, newer clubhouse for their "no frills golf" club. And maybe it is easier to attract future members (to your fully subscribed club) who are impressed by a bigger, nicer, newer clubhouse. So eventually you pay for the thing and you remain healthy enough for the additional upkeep and staffing.

Worst case? You borrow a bunch of money, lose the essential character of your club, a few members who weren't in favor or it (whether they said so up front or not!) leave and it turns out not as attractive to newcomers as you hoped. So you become another of the clubs struggling to keep up appearances with less stable financial footing than you are currently enjoying.

Gotta say, I can't see as a sensible thing to even be talking about unless there's some unmet need you have not told us about. And money burning a hole in the board's collective pocket is not a "need". It's an urge.

[John Kavanaugh]

You ever notice how every time a school board pushes through a new school the current administration soon leaves right after completion.  You might as well start looking for a new club to join now.

[Adrian_Stiff]

John have you ever played Spider Solitaire?

[John Kavanaugh]

John have you ever played Spider Solitaire?

No, does it help with anger issues?

[JMEvensky]

Everybody is in favor of "improvements" until presented with hard numbers and their individual share of the cost.

If you really want to see who's in favor,insist that all,or at least 50%,be paid in cash. Members will approve anything done with debt--they figure the next generation will pay for it.

IMO,it's critical a super-majority of your membership approves anything extensive. You don't want to run the risk of 60% approving something (based on your current membership) and have a lot of the 40% walk out the door. If you can't fund the project solely based on the "yes" votes,you might never catch up.

"Build it,they will come" only worked in the movie.

[Michael Herrmann]

Adrian, the 75 that voted in the "straw poll" were those that attended the members annual meeting last month.  As there was very little of consequence (small dues increase, minor constitutional changes, etc.) to vote on at the meeting, the turnout was low.  So that was not a cherry picked vote but just those that attended.

My sense is, after last night's meeting, more of the Board members are skeptical about a need for a major project than those who are initially positive about it.  I believe it to be a vocal minority that are trying to push the idea but I'm open to hearing more on costs and the options before casting my opinion.  The number I heard last night was $1MM for a new clubhouse, but that doesn't include demo and what to do with the space occupied by the old clubhouse.  I have found that, even as we've operated quite soundly as a golf club over the last few decades, there's always a faction of the membership that wishes for more of the country club feel (at only a slight increase in price of course!)  Brent, I think you are correct in that the upside is nice to think about but the worst case scenario is ugly.

I was simply curious if anyone knew of any successful projects of this nature that have been undertaken in the last few years.

[Thomas Dai]

I get the impression that your club is private/member owned. Would that be correct? If so may I suggest that firstly you check yourself, not have someone else check, they may have a vested interest, the rules/constitution of the club. There is a pretty good chance that a certain %, probably a large %, of formal support is required to agree to any such change. Also, and I'm not kidding here, make sure no builders of the potential new clubhouse are on the Board or have close relatives/business associates on the Board, amazingly these kinda things happen and vested interests tend to come out of the woodwork when money is involved, so it's best to be aware well in advance. Apologies if I seem cynical, but a couple of clubs club I know well built new clubhouses, sorry wrong description, a new gin palaces, instead of upgrading their courses. Things haven't been the same since. My gut feel is that there will be a small clique trying to drive through the new clubhouse, find out the real reason they want it, it may not be what it at first seems.
atb

[Michael Herrmann]

No doubt on it being easy for those to be in favor on paper.  We have a history of being interested in projects until the dollar figures show up.

For a project such as this, our by-laws call for a 2/3rds approval.  I'd personally rather see it be more like 85-90% before I would be more comfortable.

Everybody is in favor of "improvements" until presented with hard numbers and their individual share of the cost.

If you really want to see who's in favor,insist that all,or at least 50%,be paid in cash. Members will approve anything done with debt--they figure the next generation will pay for it.

IMO,it's critical a super-majority of your membership approves anything extensive. You don't want to run the risk of 60% approving something (based on your current membership) and have a lot of the 40% walk out the door. If you can't fund the project solely based on the "yes" votes,you might never catch up.

"Build it,they will come" only worked in the movie.

[Brent Hutto]

My club (before I was a member) decided on a course renovation by one of those 60/40 deals. Sure enough almost all of the 40% left the club rather than ponying up their share. There were also a few of the 60% who apparently had their arm twisted into supporting the renovation. Because quite a few of them ended up leaving, too.

That was more than a decade ago and to this day we still have membership numbers roughly equal to 60% of the pre-schism total. And we're still stuck with the long-term financial fallout of spending a million dollars that had to be borrowed.

[Carl Johnson]

". . . we continue to maintain a no frills approach to private golf.  There are not any "golf club only" options within a 15 mile radius of our club, the only 2 privates within that area are full scale country clubs, neither of which are currently at full membership.  Our club has never not been full (350) since my dad joined in 1983, and currently we have approximately 25 on our waiting list.  Our dues are very reasonable for a private club and approximately 1/2 of the two closest clubs I mentioned. We enjoy good not great golf and the pleasure of hanging with our fellow members. . . ."

So why do anything at all?  Are your systems -- HVAC, electrical, plumbing working o.k.?  Does your roof leak?  Sounds like you should spend some money there, from what you say.  I'd focus on those things first, and then spend your money on the golf course -- not sure what "good not great" means, but given the nature of your club, why not go for "great" on the golf course.  Beyond that, maybe some paint, carpet and new light fixtures would be enough to "update" the clubhouse, and go ahead and expand the deck if you think that will make the club more attractive.  I'm not sure why a pro shop would ever need expansion -- how much time do the members spend in there?  Sounds like you've got a great thing going -- don't screw it up.

[Adrian_Stiff]

Michael - I think its not easy to understand the club mindset and membership wants for us outsiders. Your judgement is going to be better, if I got it right it would more be luck!

I do think that the 75 that attended is a a bit of a cherry picked opinion though because by definition; that they attended the meeting they have the strongest views. It might be a case out of 350 that the real call is 100 YES and 250 NO. The 275 non attendees would seem not to care substantially that the club did anything.

John - Yes but play it on a medium level dosage for just three hours a day for the first year before you up the strength.

[Steve Lang]

   Can't believe you need to need to spend big bucks on new Clubhouse when as you say:

"Our clubhouse certainly has some shortcomings, the kitchen is far from what would be described as pleasant to work in and our pro shop needs some extra space.  The outdoor deck could use an expansion and the building itself will be due for a new roof and HVAC upgrades very soon."

To renovate to give the cook some more space, fix the roof, and expand the deck should all be relatively non-obtrusive activities.. sounds like worst that will happen is you'll have to order in some catering or set up a gas grill outside or in a tent or trailer and such in off-peak season periods

[J_ Crisham]

If you can't write the one check from cash reserves don't do it. Improvements that can be made with reasonable capital injections are one thing but spending 10-12 million blowing down a clubhouse and then rebuilding a Taj Mahal is insanity. In fact one only needs to drive thru Florida to see the dire straits most clubs are in that have big new clubhouses that are vastly underutilized. Your model is working exceptionally well- don't fix what isn't broken.

[SB]

The number I heard last night was $1MM for a new clubhouse, but that doesn't include demo and what to do with the space occupied by the old clubhouse.  

This estimate of $1,000,000 is not even close- commercial construction is expensive and clubhouses are much bigger than they look, even modest ones are 15,000 SF.  Rebuilding the deck alone will probably cost you $100,000.

If the $1M estimate is driving this discussion, a new clubhouse isn't even remotely possible.  You probably fix all of your problems for $1M, though.

[J_ Crisham]

You ever notice how every time a school board pushes through a new school the current administration soon leaves right after completion.  You might as well start looking for a new club to join now.

John-  +1000.  The new school gets built , taxes go thru the roof because of the inevitable referendum that gets jammed thru because it's for the kids.Then the supt leaves in a couple of years and you are stuck with a school that was built to handle a Xmas or Easter Mass turnout.

[Roger Wolfe]

Hi John,

Our clubs sound very similar.  We have done two major things to our clubhouse.  We built a big covered 2300 sq foot patio for $220k and we renovated the dining room / ballroom / offices for $220k.  We only did those after we raised enough entry fee capital to pay for everything else on the golf course and prepay some principal on our loan.  Building a clubhouse or a full scale renovation is never discussed.  We are a golf club and everything golf related comes first.  You can fix logistical problems relatively cheaply....

[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.

[jeffwarne]

Adrian, the 75 that voted in the "straw poll" were those that attended the members annual meeting last month.  As there was very little of consequence (small dues increase, minor constitutional changes, etc.) to vote on at the meeting, the turnout was low.  So that was not a cherry picked vote but just those that attended.


.

That is indeed the definition of a cherry pick vote.

Those who want to "do nothing" didn't bother to attend a meeting that was billed as "very little of consequence"

[mike_beene]

Make sure you have a solid waiting list. People who are looking for a reason to be mad or leave will have one.That is fine if the club knows it may happen.And it can be healthy.It depends upon your club.While knew buildings can be great there are also a number of empty churches that once had a new building. Rice Stadium was built for 70,000 fans.Sometimes people overbuild.

[John McCarthy]

Any other capital projects on the horizon?   Irrigation for example?

[Brent Hutto]

Sometimes people overbuild.

I would suggest people *always* overbuild when they're using Other People's Money.

[Dan Herrmann]

Michael - Just don't do it!

I've seen two clubs that I've been members at ruin their culture and financial health by doing this.