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Country Club Members Are Bearing The Brunt of The Golf Recession
Country Club Members Are Bearing The Brunt of The Golf Recession
Country Club Members Are Bearing The Brunt of The Golf Recession
CountryClubMembersAreBearingtheBruntoftheGolfRecessionBloomberg
SPORTS
CountryClubMembersAreBearingthe
BruntoftheGolfRecession
TomMoroney
TMoroney
May13,20164:00AMCDT
UpdatedonMay13,201612:16PMCDT
WithcoursesclosingaroundtheU.S.,therulesarechanging
Thatisthereality,anditsbasedingoodbusinesssense
AcrosstheverdurousfairwaysoftheNewSeaburyCountryClubliesagolfersutopia,withstirringocean
viewsandospreyracingoverhead.Insidetheclubhouselurksrebellion.
MembersaresuingtheCarlIcahnownedresortonCapeCod,accusingmanagersofschemingtoraisefees
andcallahalttorefundsonmillionsininitiationpayments.Theplaintiffsarealsoangryaboutwhatthey
describeasstrongarmtacticsandcoldindifferencetoattemptstobrokercompromise.
BruceLehman
Photographer:TomMoroney/Bloomberg
Itistheunprincipledbullyingweobjectto,saidBruceLehman,aretiredadvertisingexecutivewhoison
theMembersRightsCommittee.Ifwewerejusttocave,whatstostopthemfromdoingitagainand
again?
Well,theyredoingitaroundthecountry.Inclubslargeandsmall,therulesofbelongingareinupheaval
forthedimpledballset.ThepopularityoftheMastersandothertourneysnotwithstanding,coursesare
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closingattherateof150ayear.Thenumberofduffersisdownto25millionfrom30millionadecadeago.
Golfisjustnothot,especiallysincetheapparentendoftheTigerWoodsglorydays,andtheoldclubmodel
doesntworksowellanymore.
Withallrespect,everyonewhofeelsthedealischangingonthem,that,infact,istherealityandits
basedingoodbusinesssense,saidHenryDeLozier,partnerwithGlobalGolfAdvisorsinPhoenix.
SuingTrump
PresumptiveRepublicanpresidentialnomineeDonaldTrump,hedgefundmanagerJohnPaulsonand
Chinesedevelopersareamongthosewhovebeenbuyingupailingorabandonedclubs,inmanycases
changingfeestructurestolurenewmembers.Theireffortshavelandedthemintheroughonmorethana
fewoccasionswithadisgruntledoldguard.AtTrumpNationalGolfClubinJupiter,Florida,forexample,
golfershavesued,sayingmembershipswerecanceledanddepositsnotreturnedasrequiredwhenfeerules
wereadjusted.
DeLoziersaidtherecessionarycyclethatbeganin2008exposedtwoflaws:refundabilityofinitiationfees
andcapsonthenumberofmembers.Bothusedtobesellingpoints,whentherewasastreamofnewcomers
eagertotaketheplacesofthedeparted.Todaythatsoftennotthecase.
IcahnboughtNewSeabury,whichisinthetownofMashpee,in1998afteritsownerswentbankrupt.
HunterGary,aseniorvicepresidentatIcahnEnterprises,declinedtocomment.Phonemessagesleftfor
Icahnwerentreturned.
GolfersBruceLehman,left,andDonMonackwatchasDave
TacelliputtsattheOceancourse.
SecondaryHomes
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Inacourtfiling,hiscompany,NewSeaburyProperties,calledthelawsuitfrivolousandsaidmany
membershaveexpressednoconcernwithmanagementsplans,andinfacthaveadvisedtheclubthey
prefertheproposedchanges.
ThebillionairesNewSeaburyholdingsincludetwocourses,DunesandOcean,a42,000squarefoot
clubhouse,thePopponessetInn,abeachclub,afitnesscenterandatennisfacility.Theamenitiesare
surroundedby2,000privatelyownedtownhousesandsinglefamilyhomes,theoldestdatingtothe1960s.
Whenthesecondaryhomemarketbegantoheatupafterthefinancialcrisis,moreresidencesbeganto
appear,andconstructionisnowunderwayonseveralnearthecourses.Someoftheprotestinggolfersare
convincedthemembershipshakeupisconnectedtothebuildingboom.Theyfigurethecompanywantsto
squeezemoreprofitsoutofthegolfbusinessandselltheresortwithapricereflectinghigherrevenue.
FitnessCenterLeverage?
Thisisnotaboutrunningacountryclub,saidDaveTacelli,whoisinthesemiconductorbusinessandhas
beenamembersince2013.Thisisarealestateplay.
Icahnsrepresentativesrejectedthetheoryinalettertomembers,sayingtheresortisntontheblock.Club
managershavesaidtheyrecommittedtoprovidinganextraordinaryexperienceandincredibleamenities.
Plansareunderwayforasnazzynewfitnesscenterwithexecutivelockerrooms,asaunaandmassage
therapists.Opposinggolfersclaimtheclubisusingthatasleverageforthenewfeestructurebecause
memberswhodontacceptitwouldbebarredfromthefacility.
Theproposedchangesincludereducingthenumberofmembershipcategoriestosixfrom33.InaMarch17
letterannouncingthenewsystem,managerssaidthecaponthenumberofgolfmemberswouldriseto900
from690,butinanothermissiveonApril15theysaiditwillremainatthelowerlevel.
NoRefunds
ForCassCosta,arealestateagentandagolfmemberfor45years,thesocalledstreamliningwouldbe
costly.Ifshestayedinhercurrentcategory,herannualdueswouldgoupto$8,266from$6,681.(Thejudge
inthelawsuitruledTuesdaythatNewSeaburycantimposetheneworderuntilafterahearinginthecase
thatssetforMay27.)
Costasaidshewasoffendedbythewayshewastoldofwhatwascomingbyletter.Shesaidsheand
manyothersleftameetingwithclubmanagersaboutaweeklaterperplexed.Nobodywouldanswerour
questions,shesaid.TheattitudesurprisedhersinceIcahntookgreatpainstoreviveNewSeabury,which
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wasindisrepair.Hesavedtheplacefromgoingdownthedrain.
RalphLepore,anattorney,paid$75,000in2008foraplatinummembership,thenthetopofthescale.His
yearlyduesare$14,100.Underthenewscheme,Leporesaidheandotherslikehimwouldfacetough
choices:Movingtoacategorycalleddiamondwouldmeanlosingtheirinitiationfeesrefundability,
somethingnowguaranteedataproratedsumfor20years.Tokeeptherefundperk,Leporewouldhaveto
pay$2,500moreannuallyandgiveupaccesstothenewfitnessfacilityapropositionheslamsas
coercion.
ThelawsuitfiledonApril8isarequesttoreopenthebankruptcyagreementthatmadetheIcahnsale
possible.Therearejustfourplaintiffs,buttheangrygolferssaidthat270peopleattendedameetingabout
thesuitatChristtheKingChurchinMashpeelastweekend.
Tacelli,agolfmemberforthreeyears,saidhebelievesIcahnknowsnothingaboutthecontroversy,whichis
whyhewouldlikeameeting.
Idsay,Telluswhatyouretryingtodo.Wereallbusinessguys,wecanworkthisout.
Beforeit'shere,it'sontheBloombergTerminal.
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