Concert Golf Partners is once again flush with cash.

[Steve_ Shaffer]

Can we help them out so that they can invest their 100M and purchase some second or third level  clubs?  Any suggestions ?

Concert Golf Partners is once again flush with cash.
     The Newport Beach, California-based owner/operator has secured a $100 million financial commitment that secures its place at the top of the club-acquisition food chain. Peter Nanula, Concert’s chairman, figures that the money will enable his firm to add eight to 10 private clubs to its portfolio and make capital improvements to both new and existing properties.     “For a lot of clubs, it all comes down to capital,” Nanula notes. “Because we have capital, we can solve problems and take on risks that clubs can’t.”     The new funding ensures that Concert, which owns 20 clubs, will be able to compete for properties with ClubCorp, its much larger and most significant rival. Both companies are among a very small group of owner/operators that have money for acquisitions, and both are on the prowl for the same type of property: Mid- to upper-tier “lifestyle” clubs in metropolitan areas that have lost members or become burdened with debt and now find themselves in need of money that will allow them to make the facility improvements they need to remain competitive in their markets. Generally speaking, Concert and ClubCorp target member-owned clubs that generate revenues of $5 million to $10 million annually.     Although the companies are always seeking to increase their holdings, 2019 has been a quiet year for them. Concert has acquired just one property, Plantation Golf & Country Club in Venice, Florida, while ClubCorp, as best I can determine, hasn’t made a purchase since late 2018, when it bought Ridge Club, a venue in Sandwich, Massachusetts that’s changed hands at least five times since 2003.     In fact, the companies’ portfolios are so similar that ClubCorp tried to buy 16 of Concert’s clubs in the spring of 2018. The prospective sale collapsed in the late stages of the negotiations, due to what Nanula described at the time as disagreements related to price, terms, and “softer issues” concerning “commitments we have made to our members.”     Concert has twice previously amassed investment funds that provided it with a total of $150 million, money that it used to acquire seven golf properties in Florida and 13 in Indiana, North Carolina, Pennsylvania, and seven other states. The money in the first two funds came from 60 to 80 high-net-worth individuals and families. The third fund has commitments from some of those same individuals and families as well as from a pair of New York City-based entities, Fireside Investments and Blackstone Tactical Opportunities.     Nanula says that Fireside and Blackstone have expertise in hospitality, and he believes that their counsel will be valuable to Concert in the future. “As we grow,” he explains, “it’ll be useful to have professional investors with experience in hospitality.”     Concert’s next acquisitions aren’t right around the corner. Nanula reports that he has “a number of possibilities in the pipeline,” but no purchases are imminent. He hopes to acquire one or two clubs before the end of the year, but he acknowledges that it’ll take “a few years” to spend the $100 million he now has to spend.     “We’re going to keep doing what we’ve been doing,” he says. “All 20 of our clubs are successful and thriving, and each one has exceeded the business plan we set for them. We have a model that works.”     Concert was scheduled to finalize the transaction for the third fund last week.


From Robert J. Vasilak's blog: http://worldgolfreport.blogspot.com/

[Joel_Stewart]

I've talked with Peter Nanula a few times. He has no interest in architecture, classic design or growing the game.


His only interest is growing revenues at his clubs, mainly by adding pools and health clubs and expanding memberships.

[Bruce Katona]

Both companies have business models; somewhat similar.


If one had a business model that looked for "value add opportunities in less than A properties" one of these guys would be executing on that model.

[JESII]

Bruce - who are "both"? Concert and ClubCorp?


In the Northern suburbs of Philadelphia, that's exactly what they've both done...not sure how the financials are working, but that sentence fits the bill for their acquisitions and messaging.

[Steve_ Shaffer]

Concert recently spent 5M at Philmont on clubhouse and other work, including golf architect Andrew Green's work on the classic golf course designed by Willie Park, Jr.


The renovation of the North Course was completed in 2018 by golf architect Andrew Green. Working closely with historical data, Green redesigned and repositioned the bunkering throughout the layout to meet the demands of the modern game. He also crafted a new 18th green relocated to the right of the previous hole location.
The new three-hole loop consists of a par 3, par 4 and par 5, all designed to be fun for families and friends, alike.

http://www.morningread.com/releases/2aacd7b9-0508-4974-b8e8-7fde0e45eac9
I think a lot of lower tier private clubs wouldn't mind having 5M in capital for work that was never done.

[Bob Harris]

Steve,


Based on this thread, a lot of unhappy members at Philmont:


https://forums.golfwrx.com/discussion/1728796/philly-area-memberships#latest

[PCCraig]

These guys are more interested in purchasing the underlying land at a steep discount than they are for the architectural significance of the clubs. They invest (to a leverage point), drive some cash flow for 5-10 years, then they have an option of selling the entire thing to a developer.

[BHoover]

These guys are more interested in purchasing the underlying land at a steep discount than they are for the architectural significance of the clubs. They invest (to a leverage point), drive some cash flow for 5-10 years, then they have an option of selling the entire thing to a developer.

Bingo — if you are a member at a club acquired by one of these companies, understand that the members are not the priority.

[Jason Mandel]

I haven't posted in a while but I'll chime in as I'm a long time member at White Manor, which Concert acquired a few years back.


There are positives and some negatives, but overall if I'm being fair I have to say they've done a decent job with the club.


Positives
1. The course is in as good of shape as it's ever been.
2. They've cut down the membership dues to a number that is certainly competitive with area clubs. This was a big problem previously.
3. They've filled the place up, and they've done so without offering "crazy deals" to do so. Yes, they may have made some deals on initiation fees, etc, but the members that are joining are good quality members and they seem to be using the club.
4. They've spent money to improve the club.


Negatives
1. I'm not really sure they spent the money that they promised they would spend on upgrades. While upgrades were done, they weren't exactly what the previous club leadership had outlined for them to do.
2. The constant staff turnover is probably the biggest problem. The bring people in, they are here one minute and they are gone the next. Generally speaking I don't think the employees are very happy with the way they are treated by the club. 
3. There are definitely "little things" that bother you about the way the club is operated, and there's really nothing you can do about it. But to be fair, I think most clubs have these issues.


I could be totally naive, but I don't think the end game for Concert is selling to a developer. White Manor is located in Willistown Township, with zoning restrictions some of the toughest anywhere in the country. I think what's most likely is they flip their entire portfolio to another operator. This is much more in line with what private equities typically do.

[Bob Simons]

I joined Philmont when Concert first bought. As my first private club experience, I was probably a bit of an apologist for the place. They announced the closing of the South Course early this year, presented to us as a move that would direct more resources into the North Course. Well, almost every green is dead on the North, the fairways have exploded with crabgrass and we just received an email two days ago that they would be instituting 13 temporary greens and reopening some holes on the South to make a “playable” 18 hole course.


The greens keeper just “resigned” and almost everyone I play with is leaving. I’m not even sure the course will be playable by next spring. They redesigned the 18th hole about 2 years ago, made it longer and shifted the green way to the right, making the hole a dogleg. This new section of fairway was one of the first problem areas on the course each of the last 2 years. Turns out they never installed any drainage. This is where they lost me, you were just in the dirt 2 years ago and tried to do it on the cheap by not installing drainage. Now something that would have taken you a day, maybe 2, to do while you were building the hole, is now a 2 week project at the minimum. There’s also been some rumblings that they didn’t properly prepare the earth before they sodded the new fairway, left all the rock and stone that is typical of the soil on the course. The brand new practice green has struggled since day 1 and as of last weekend was stripped of all its “grass” ready to be seeded. The supposed savings was approximately $500k from closing the South course, yet the North is totally dead.


I’m in the Construction Management business and everything they’ve done there has been marred by scheduling nightmares and poor workmanship. I’d be looking for a new job if I ran a small pub renovation that took 18 months, yet that’s what we’ve dealt with up there. They’re now offering a credit of 1 months dues and have gotten us access at some courses in the area but it sure stings to be paying dues to Concert and then having to shell out more cash in the weekend to play a course without 13 temporary greens. Concert has also balked at some items that were in the agreement of sale, notably maintaining 9 holes on the South Course. Currently 3 are maintained as a practice loop, although with the 18 North fairway work, we’ve been routed to 14 on the South to complete the round.

[Eric LeFante]

Great insight Jason and Bob. Thanks for sharing.

[archie_struthers]

 




Seems like a good strategy. Patient money buys large tracts of land with cash flow in locations with high visibility and potential for increased development. Philmont is a perfect example of how difficult this can be.


You have two living organisms to nurture customers and the golf course itself. Neither is easy as it seems at first blush. Change usually comes with a price so preparation tends to be difficult. Throw in the bureaucratic issues and politics and you see why not everyone can do it!

[MCirba]

I'm the last person in the world to get involved from any perspective in club money management but I have to say it saddens me to hear about the current state of Philmont from an architectural perspective.


The now NLE South course had some terrific holes from a Hugh Wilson redesign in the mid 1910s and the North is a wonderful Willie Park Jr. design.


Hoping Concert has a game plan that includes at least saving and perpetuating the latter for the long run.

[Bob Simons]

In keeping with the normal high rate of turnover at Philmont CC since Concert Golf took over, the membership just received a letter announcing the resignation of the head pro, Eric Schultz. He took the job at Colleton River, which I would imagine he would have taken anyway based on the email.

Fun fact, Philmont hosted an outing yesterday. On 13 temporary greens. We noticed the tee sheet was unavailable on our app for that day. I reached out to the GM about why it was unavailable and recieved no return call/email. I finally got a hold of Eric, who seemed embarrassed to tell me there was an outing. Neither of these situations is a good look for Concert, a head pro who lasted 9 months and hosting outings in the midst of a widespread turf issue that has 85% of the membership paying out of pocket to play other clubs in the area. Good thing they saved all that money shutting down the South Course...

[Bob Simons]

Philmont members received an email yesterday confirming that the 13 temporary greens/composite course would remain in place through the end of the year. They finally have set up reciprocals that they will cover fully, at 6 other clubs in the area. Many of the members are feeling this is too little too late, as the course has been unplayable for at least a month. The weeks leading up to early September were not great either. A buddy of mine was in the golf shop over the weekend and was voicing his concerns that the course would still not be ready come next spring at which point the assistant pro chimed in "Are you an agronomist?" At this point it is a gamble to continue to pay dues for the next 6 months while the grass isn't growing and hope that when they pull the tarps in March, a miracle has occurred. The nice thing is that the members now have access to some nice clubs such as Old York Road and Riverton, although I imagine a morning starting time will be hard to come by. Not a great situation for the old Willie Park Jr gem.

[Jim Sherma]

Sad to hear about Philmont. Never played the South but thought the North was a very nice day out with some very good stretches of golf. Based on my experiences it seems that once course conditions go south it appears to be tough to get it back to what it once was. Being a non-equity club with corporate control of the fiscal year financials will not help the process unless they are willing to take a big hit for the fiscal period(s) that the spend occurs.

[Wayne Wiggins, Jr.]

With the uptick in play across the board this year, am curious how Philmont is faring these days? Looking at this thread seems like there were some hiccups, to say the least, this time last year. How has the club done during COVID? Did they sell off the South? Has anyone played the North?