Jim McWethy has sunk $15 million into Mistwood Golf Club in suburban Chicago and now has revenues projecting to $7 million for 2016, largely on the strength of strong F&B and wedding business. But that would still fall short of the $10 million in annual revenues the owner wants to achieve for sustained profitability.

 

Jim McWethy, 72, is the exceedingly rare golfing entrepreneur who sees a future in the sport, Crain’s Chicago Business reported. In the past five years, McWethy has sunk more than $15 million into Mistwood Golf Club, in southwest suburban Chicago, to rehab the golf course and erect a state-of-the-art practice center and 28,000-sq. ft. clubhouse.

Budget-strapped rivals, struggling to fill empty tee times, are scratching their heads, reported. “So many golf courses are suffering economically right now, and nobody wants to invest much in the sport,” said Chris Charnas, President of Links Capital Advisors, an Evanston, Ill.-based golf property brokerage. “[McWethy is] one of the few owners I encounter anywhere willing to spend money to improve his facility.”

(C&RB has reported extensively on improvements and developments at Mistwood in recent years: http://clubandresortbusiness.com/?s=Mistwood+Golf+Club)

It’s still unclear when—or maybe even if—McWethy’s investments will pay off, Crain’s Chicago Business reported. The Chicago District Golf Association, which oversees 400 courses in the region, reports that play is down by at least 10 percent in the past seven years, to 1.8 million rounds last year. Amid a glut of promotions, revenue probably has fallen more. The Chicago Highlands Club in Westchester, Ill., which opened in 2009, has been the only new course to come into ithe market in years.

Course renovations, meanwhile, have happened mostly at deep-pocketed, high-end private clubs in the area—such as Medinah (Ill.) Country Club, Flossmoor (Ill.) Country Club and Olympia Fields (Ill.) Country Club—and municipally owned facilities such as Arrowhead Golf Club in Wheaton, Ill. and Mt. Prospect (Ill.) Golf Club, Crain’s Chicago Business reported.

Fox Valley Country Club in North Aurora, Ill. didn’t open for play at all this spring, Crain’s Chicago Business noted, and the owners of Indian Lakes Resort in Bloomingdale, Ill. announced recently that they will close their course at the end of the current season.

Charnas’s brokerage currently has two Chicago-area courses for sale, Crain’s Chicago Business reported—Turnberry Country Club in Lakewood, Ill. and Balmoral Woods Estate Country Club in Crete, Ill. The asking price for each is around $1.5 million. Most courses in Charnas’ portfolio today are being sold at 25 percent or less of their replacement cost.

Mistwood Golf Club opened in 1998 on 210 acres that once were a rock quarry and farmland, Crain’s Chicago Business reported. McWethy owned 7 percent then, while a dozen other partners made most of the decisions.

In short order, the club ran into trouble and by 2003, McWethy, who was once the Chief Financial Officer of family-owned Berry Bearings in Lyons, Ill. stepped in and bought the whole course for an undisclosed sum.

Play was sporadic at that time, Crain’s Chicago Business reported. and to fix that, McWethy set out to improve the club instead of cutting costs. “The golf pie is getting smaller,” he explained. “I decided we have to figure out how to get a bigger slice of that shrinking pie.”

Food and beverage have emerged as a key at Mistwood, which employs around 150 full- and part-time workers, Crain’s Chicago Business reported. The club, which has a 150-seat pub, is likely to host three dozen weddings this year in its 250-seat ballroom, and McWethy hopes to do 60 next year.

On the golf side, McWethy has been brave enough to raise green fees by 10 percent in the past year, to $110 in prime time, and has resisted the discounting that has become the lifeblood of rival clubs, Crain’s Chicago Business reported.

“The fish in the stream of golf are swimming one way these days, and Jim McWethy is swimming the other way,” said Ray Hearn, a golf course architect who redesigned Mistwood’s course for McWethy. “He’s one guy who really cares about his golf club standing out.”

Simply standing out, however, may not be enough, Crain’s Chicago Business reported. Mistwood’s revenue will come to around $7 million in 2016, which is still not enough to make the place profitable. McWethy’s goal is to get it to $10 million, which would be enough. He doesn’t have the wealth, he admitted to Crain’s, to subsidize his golf club forever.