The recent sale of the Cary, N.C., property has produced a new formula for success: Owners invest, professional managers operate, and members enjoy the club.
Through it all, the serenity provided by the 40-acre lake that distinguishes the property in Cary, N.C., where MacGregor Downs Country Club is located has never been disturbed. The lake was there when the property was first developed in the 1960s by J. Gregory Poole, Sr., back when Cary was its own small town of just over 5,000 people, and not thought of as either a suburb of nearby Raleigh or as connected in any way with the Research Triangle (which had not even begun to take shape).
The lake then became a signature feature of MacGregor Downs CC, which opened as part of the community in 1967 and quickly put itself on the national golf map, with Jack Nicklaus competing on its Willard Byrd-designed course when the PGA Professional Match Play Championship was held at the club in 1973.
At A Glance: MacGregor Downs Country ClubLocation: Cary, N.C. |
The club became member-owned in 1980, and the lake’s tranquility served as a fitting complement to how MacGregor Downs CC was prospering along with the surrounding area. By the time of the club’s 25th anniversary in 1992, Cary had swelled to 65,000 people and everything tied to the region was riding the wave created in what Steve Parascandola, an attorney who relocated from New York to North Carolina and became a MacGregor Downs member in 1998, describes as “an idiot-proof place for growth.”
Twenty years later, Cary’s population exceeded 100,000, and MacGregor Downs turned 40 and was basking in the completion of a major club enhancement project and adding those who inquired about membership to a waiting list. But beneath the lake’s ever-calm surface (only non-motorized boating is permitted), some disturbing ripples were beginning to form that would soon create a serious undertow.
In the case of MacGregor Downs, however, the developing turbulence wasn’t as much due to the challenges that hit every club at this time from the recession and cratering of the real-estate market. The Research Triangle area would fare better than most regions during the economic downturn (Cary’s population continued to grow, and now exceeds 150,000). But no matter where they were located, private clubs that hadn’t heeded, and responded to, the significantly changing nature of the club business, or taken steps to position themselves properly for the next generations of membership, were about to get sucked into a life-threatening whirlpool.
And MacGregor Downs was guilty of being asleep at the switch in both of those areas. As a member-owned organization with a constantly revolving door of “leadership,” the club had failed to develop any long-term plans or strategies, and continued to operate in a way that was primarily designed to keep its aging membership comfortable. Even as the clear trend emerged toward the need to offer more casual dining opportunities and create venues that can take full advantage of all that a property has to offer, MacGregor Downs hadn’t even made any serious moves to create an outdoor clubhouse deck or start other projects that could enhance the special experiences its unique lake setting could provide.
Too Much to Handle
As the millennium’s second decade began, MacGregor Downs did try to take some steps to catch up on its own. In 2011, a search for a new General Manager brought Russ Curtis, CCM, CCE, to the club from Eagle’s Landing CC in Georgia. With an MBA from Wake Forest University’s Babcock Graduate School of Management and a total of 15 years of experience with ClubCorp properties before leaving Eagle’s Landing, Curtis was certainly tuned in to the importance of staying relevant, and he immediately set out to update the club’s offers—most notably with the creation of new amenities and services designed to appeal to families.
A seldom-used private dining space was converted into a youth room where kids were not only allowed, but encouraged, to draw on the chalkboard walls. That room (and other spaces within the clubhouse) were also promoted as staffed Kids’ Clubs for Thursday and Friday evenings, to give parents the opportunity to enjoy dining at the club on their own.
In that same year, Parascandola joined MacGregor Downs’ Board—and he then quickly found himself in the President’s role a year later. From that vantage point, he saw the immediate need for the club to get serious about long-range strategic planning. But once he and others who were then part of the club’s governance started to take a closer look at where the club needed to go and how it would have to get there, they had to fight the urge to run for the life rafts.
“Operations were stable and pointed in the right direction after Russ came in to help right the ship,” Parascandola said. “But there was a long list of capital needs for the next 10 to 15 years that we would have to find a way to address, so he and his staff would be able to continue to keep us competitive. And it was hard to see how we were going to be able to take on any of [those capital projects].”
That was because MacGregor Downs, in addition to struggling like many clubs in an economic climate that made it difficult to attract new members and their initiation fees that could fund capital projects, had also reached the limit of what it could tap from either its membership or outside sources.
“We had $1.5 million in bank debt, and we also had indebtedness to members,” says Dan Hartnett, a club member since 1993 and a retired CFO who served on the MacGregor Downs Board and its Finance Committee. “There had been some pretty steep assessments in the previous decades, and it had led to a slow-bleed situation where we’d have an assessment, lose members, and have to lower membership prices to mount a campaign to get members back in. It got to a point where we hanging on by our fingernails, year after year.”
Weighing the Options
With the club’s competitive grip getting more and more tenuous, Parascandola—now in his third year as President, which in itself reflected the growing membership malaise—concluded, along with Curtis and the rest of the Board, that other possible courses of actions needed to be explored. The golf course and other facilities were in dire need of improvements, and even the lake, as the club’s water source, was showing alarming signs under its calm surface that its pipes and pumps were crumbling. A new source of funding had to be found if MacGregor Downs was to stay afloat.
“We decided to look at a whole variety of options,” Parascandola reports. “Condo units, naming rights, bond issues, outside partners. But it kept coming back to wanting to stay a private club, and not wanting to disrupt the traditions that we had. Even though there was just a 45-or-so-year history, it’s a place where it seems like 1,000, with the Scottish motif that was established from the start and then carried on through the years.”
The decision was then made to narrow down the search to discussions with a half-dozen or so potential buyers from among management firms who were familiar with the club business, ranging from the largest companies in the industry to boutique regional operators. Of these, Concert Golf Partners, the Newport Beach, Calif.-based firm that has acquired and operated more than 40 club properties since 1990, and currently has a portfolio of 12 clubs in eight states, soon emerged as the favored choice to present to the membership as a potential buyer.
“It was very important to recommend a buyer to the membership that would be committed to maintaining the culture of the club,” says Hartnett. “This is not a huge club; we’re part of a neighborhood community. Everyone knows everyone else and gets along. So our big question—and it was really more of a demand—was ‘Can you maintain the culture [as] a third party owning the club?’”
After receiving assurance from Peter Nanula, the former Arnold Palmer Golf Management CEO who founded Concert Golf, that his firm was interested in acquiring the club precisely because of its history and traditions, and that Concert would only seek to maximize those attributes as it tried to help the existing members, as well as new ones, get full value from the club’s special property, MacGregor Downs’ buyer-search committee voted to recommend to the Board that the club be sold to Concert Golf. After additional presentations from Concert where the full Board was satisfied by similar answers, the choice was endorsed for presentation to the full membership. After a series of town-hall meetings where everyone was given ample opportunity to probe into the details of what their club life would be like under outside ownership, a vote was held. And so it came to be that in the spring of 2014, MacGregor Downs CC was no longer member-owned.
Delivering on Promises
Nearly two years later, a honeymoon glow can still be felt throughout MacGregor Downs CC. The property itself certainly has a new look, with the golf course showing off new greens and tee boxes after being closed for that project last summer. Superintendent David Apple also directed the removal of 2,000 trees, after a shade analysis showed that would also be critical to preserving the improvements that were being made.
The lake itself has a new substructure that is now tied to a fertigation system that will also help to maintain optimal course conditions. The tennis courts have new lights that provide much better nighttime-play conditions for the club’s active program. And just this past March, approval for a new clubhouse deck overlooking the lake was finally secured, after a prolonged permitting process (which no doubt would have been easier to achieve back when Cary had 5,000 people).
The MacGregor Downs management team has remained intact under Curtis’ direction and some department heads, such as Food & Beverage Director Gil Cote, have actually seen new opportunities open up for them as they’ve been given additional responsibilities within the Concert network. Even those who have remained in the same roles enthusiastically endorse how they’re now able to operate in an environment free of ever-changing committees—not to mention that there are now resources available for both their short- and long-term needs, and that they can obtain immediate decisions for the requests that they make.
Curtis has also been able to expand his staff in key new areas. Youth & Communications Coordinator Gabby McCalister now focuses on expanding the programming, including a babysitting certification course that is administered by an approved outside vendor, that can now be offered to a population of members’ children that was significantly swelled by the wave of 177 new members who have joined MacGregor Downs since May 2014.
And Cricket Russell, who became the club’s Membership Director last year, reports that the momentum to bring in more families shows no sign of subsiding, now that she has plenty of clear proof on hand to dispel what had been prospective members’ two biggest misconceptions about MacGregor Downs: 1) that it was an “old folks’ home,” and 2) as a member-owned club, it was a place where “you got assessed every day.”
The biggest evidence of the youth movement at MacGregor Downs can be seen within the golf department, where Curtis has forged an innovative partnership with iGrowGolf, which seeks to help clubs establish junior programs that have staying power, by combining academy-style curriculums with increased recognition and rewards for completion of instructional steps. Matt Reagan, PGA, one of the partners in iGrowGolf, is on-site at MacGregor Downs as its dedicated youth golf professional.
Program enrollment, Reagan reports, has grown from 19 for the 2015 spring semester to 62 for last year’s fall semester and nearly 100 for 2016. That’s produced a 21% increase in golf revenue, he says; in addition, two family memberships were generated because of parents’ specific satisfaction with the program and their recommendation of it to others.
Sit Back and Enjoy
Many MacGregor Downs members, meanwhile, have looked around and decided there’s really nothing for them to do anymore but enjoy all that the club has to offer, now that the issues of how to operate it, and how to take care of providing for its short- and long-term needs, have been left in others’ capable hands.
“Having our greens and tee boxes replaced never would have happened in the [member-owned] context,” Hartnett says. “Forget the funding aspect—it would have been very difficult to first get that through even if we had the money, and then to manage it as a process.
“It’s also important to see that the management team and staff is still here and that nothing has changed from that perspective,” Hartnett adds.
As is its practice for all of its properties, Concert has established an advisory board from a representative cross-section of eight MacGregor members. But Curtis Scott, a member since 1999 who served on the Board for four years while it was member-owned, and who is now on the advisory board, says there is very little similarity to the roles.
“We’re just a voice, not an influence,” Scott says of his advisory-board duties. “It’s not insignificant or honorary, and we take our role seriously as a liaison. But we’re really just meant to serve as a sounding board to the management team and ownership, so they can test out their major decisions and determine how they are likely to be received by the full membership. We’re also encouraged to voice any concerns we might have or hear about from other members.”
MacGregor Downs’ sales agreement with Concert included contractual commitments for the types of improvements that have been made to date during the first five years after the sale, along with other covenants. So it will still be a few years before the ultimate results of the transition can really start to be judged. “But if we’re still in a honeymoon period, we’re still getting the benefits of investments we never would have seen otherwise,” Scott notes.
Even better, Hartnett adds, real accountability now exists that was never present before. “As someone who has been involved in all sorts of club governance,” he says, “it’s frankly a relief to have someone truly minding the store.”
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