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Private Club Spotlight

 There are a lot of relics in a golf museum – artifacts that were once a large part of the game but are now extinct, or close to it.

The first collection from antiquity includes items like gutta percha balls, knickers, the mashie, the niblick, and hickory shafts.

More recently, a number of other items from the last quarter of the 20th century have made their way to the dust-covered shelves of collectors and golf history buffs: metal spikes, persimmon woods, balata-covered golf balls, and three-wheeled golf carts.

As we move toward closing the first quarter of the 21st century, it appears that another time-honored tradition in golf may be heading toward extinction – the equity private country club.

The exceptions are the seemingly impervious ultra-elite member-owned and member-operated private clubs – Pine Valley, Merion, Aronimink, Congressional, Baltimore Country Club and the RTJ Club. They have withstood the test of time and are cemented by an aristocratic membership that has a unified “whatever the cost” mentality.
Of all the ultra-elite level clubs to debut in the Mid-Atlantic Region this century, very few are member-owned. A couple of notable exceptions are Galloway National in New Jersey, Kinloch in Virginia and Huntsville in Northeast Pennsylvania, both of which have national reputations and earned Top 100 rankings.

The Ridge at Back Brook in Ringoes, New Jersey, is another example of a prestigious and highly ranked private club, and owner Joel Moore gives some very frank opinions why his course and others at that level were able to debut during these changing times.

“From our perspective, when one is going to start a club from scratch, it is much easier to handle the budgeting, approval, design and marketing when you are a single owner,” said Moore, whose Tom Fazio-designed club debuted to national acclaim in 2002. “Especially when you are trying to build something exceptional and unique, you don’t want to have to deal with a group of owners and investors. You can make important decisions quickly, then you sink or swim on your own.”

At the next level, mid-range equity clubs are facing a lot of challenges. Some have closed. Inverrary Country Club, the historic 36-hole site in Fort Lauderdale that used to host the PGA Tour’s Jackie Gleason Invitational, is closing forever on June 1. A former equity club, it was purchased by a management company in 2006 but was never able to escape the avalanche of previously accumulated debt.

Many other equity clubs have been bought by private entities or management companies. The rash of conversions from equity private clubs to privately owned clubs throughout the region in the last decade is staggering.

Just to name a few: Linwood, Wildwood (now The Shore Club) and Woodcrest in New Jersey; North Hills, LuLu, Philmont, White Manor, Plymouth (now the 1912 Club), and Meadowlands (now Bluestone) in Pennsylvania; Towson (now Eagle’s Nest), CC at Woodmore, and Norbeck in Maryland; and Chantilly National in Virginia.
Still others have gone public – or use that catch-all phrase, “semi-private.”

“I envision this type of ownership change happening more and more,” predicts Allen DePuy, an industry veteran who has been on the management side of clubs as well as working as a golf broker for Colliers International – a national golf course brokerage firm.

“Companies are looking to purchase these equity clubs because of strong top-line revenues and they are able to benchmark expense models. Plus, they usually find relatively high-quality conditions. From the members’ perspective – they eliminate their burden of expenses and assessments. And they are able to enjoy the property again.”

Translation: Enjoy the property again instead of spending so much time running the club and arguing amongst one another.

“The exception is, in the top 20 markets across the country, there always will be three to five high-end properties that will never change hands,” adds DePuy. “Call them the Untouchable List.”

Beyond that list, expect to see a continuing rash of ownership changes.

A prime example of a former equity-owned club that made the successful transition to private ownership is Evergreen Country Club in Haymarket, Virginia. For years it was member-owned until the club was sold to a business partnership in 2014.

C.P. Leopold is one of three owners and he admits that the purchase was a bit of a leap of faith.

“Sometimes you do things and you don’t really know what you are getting into,” admitted Leopold. “My father, who was a habitual entrepreneur, remembered Evergreen as a special piece of property. He encouraged the purchase and, since we started running the club like a business, it has been successful.”

Evergreen General Manager Bryan Dolieslager added the critical comment.

“The most important reason things have turned around at Evergreen was we were able to avoid the proverbial A-Bomb – Assessments!”

The Federal Club, in Glen Allen, Virginia, is another great example.

Despite a strong Arnold Palmer-design, it struggled through member-ownership and even went “semi-private” for a stretch. Then, in 2010, the Gilman family bought the course, built a new clubhouse, eventually went fully private and re-invigorated the membership. The club went from about 100 members at the time of the sale to more than 345 members.

“Although the Gilman family didn’t have a background in golf, they understood that the most important asset they had was the golf course,” stressed Carl Filipowicz, general manager at the Federal Club. “They have never wavered from that. Keeping course conditions impeccable is their number one priority.

“At the same time, they run the club like a business. Costs have to be monitored as closely as course conditions.”
At other locations, private ownership has always forged the path to success at a private club. Fiddler’s Elbow in Central New Jersey was one of the earliest examples.

In 1964, Raymond J. Donovan and Ronald A. Schiavone obtained the property and began sculpting their dream at Fiddler’s Elbow. It opened the following year with 27 holes designed by Hal Purdy. Nine holes were added by Brian Silva in 1986. In 1992, the third course was added – the artwork of New Jersey native Rees Jones. It was the only private corporate country club in New Jersey.

“We have changed quite a bit over the years,” explains Ken Donovan, club president and son of the original founder. “We had to change quickly – or go out of business.”

While corporate memberships remain, about two-thirds of the memberships are now individual or family. To accommodate the new demands, amenities were added – a mammoth pool, tiki bar, arcade room, tennis courts and paddle tennis courts.

“We had to change the original model and change quickly,” added Donovan. “Fortunately, with a streamlined ownership, we were able to react efficiently.”

The foursome of courses – Talamore Country Club in Ambler, Pennsylvania, Applecross Country Club in Downingtown, Pennsylvania, and – to a lesser extent – Talamore Resort and the Mid-South Golf Club in Pinehurst, North Carolina have been living in the privately owned, private country club world for more than 25 years.

The Pennsylvania courses sit in the middle of all of the transition from member-owned clubs to private ownership. While others in the area have been forced to change their management model, the clubs – all of which are owned by Bob Levy – are quite successful in their non-equity form. To survive, let alone succeed, they needed a unique formula to compete against a wide range of established clubs.

Levy’s frank assessment is, “Equity clubs have a tough time evolving because they have too many hands in the pie.”
“Evolving” is the key word. In a disintegrating golf market, there is no time for evolution. The only path to survival is quick reaction.

Those quick reactions have resulted in major modernizations at Talamore and expansions at Applecross – in an effort to meet the needs of today’s private country-club members.

“All of our clubs have an extremely diverse membership with a wide range of interests, budgets and time availability,” says Levy. “The overall value proposition is an important thread with seamless membership to our clubs and access to many others around the world.”

The two Pennsylvania properties are residential-based clubs and all of the residents of the communities are social members. Conversely, the stand-alone private club has a difficult time surviving in today’s market.

The bottom line – realtors, insurance execs, bankers, small business owners and doctors are being replaced as the owners and decision-makers at private clubs. They now are, happily, just golfers and members.

Business leaders from the golf industry and national management companies have taken over the management of private clubs and are facing the challenges of survival in a shrinking market.
And that market has different needs from the private club members of the past.

Certainly, today’s millennials are not interested in owning or running a private club. Many don’t even want the responsibility of owning a home or a car. They want things done for them.

The key to “managing” to survive in today’s golf market is to leave course management to those who have been trained in that field. And let the members enjoy playing the game.