(Pictured: Ballantyne CC)
After news organizations forced the Small Business Administration’s release on June 6th of the list of all organizations that received Paycheck Protection Program funding of more than $150,000, many club GMs and Presidents were contacted for public confirmation that the loan was being used as intended, to avoid layoffs and furloughs. More than 400 clubs have received the funding, but some have declined to accept it on “moral and legal” grounds, and because of the scrutiny it could bring.
The release by the Small Business Administration (SBA) on June 6th of the list of companies and organizations that applied for, and received, Paycheck Protection Program (PPP) loans of more than $150,000, as part of relief efforts during the coronavirus pandemic, led many publications to highlight country and golf clubs that were included among the applicants and recipients, along with those that qualified but decided to not use the funds for various reasons.
The release of the lists came after the SBA had been sued by a number of newspaper organizations over the identity of the loan recipients. When the applicants applied, they were told the loans would be public record, but the SBA had resisted releasing the information. The SBA finally agreed to identify all recipients of loans in excess of $150,000, but only by providing ranges of funds received and not exact amounts.
The PPP loans are low-interest and can be used for payroll costs, interest on mortgages, rent and utilities. They are fully forgiven if at least 60% of the forgiven amount has been used for payroll, according to the SBA.
The deadline for applying for the loans was recently extended to August 8th, after it was reported in mid-June that over $130 billion allocated for the program had still not been extended.
Many of the reports published after the release of the SBA lists took on an investigative tone and included references to “plush” clubs, the affluence of their membership, their “resort settings” and amenities, and included questioning of the club’s general managers or Board members about their need for the assistance. A report in The Palm Beach Post was headlined, “Are the Million-Dollar PPP Loans Many Palm Beach County Golf communities Collected Justified?”
A report in the Charlotte (N.C.) Observer was headlined “Some [North Carolina] Country Clubs Got PPP Small Business Loans for Over $1 Million During COVID,” and began, “Country clubs in the Charlotte area were among more than a dozen clubs in North Carolina that received Paycheck Protection Program loans, according to data released [on June 6th].”
“For instance,” the Observer’s report continued, “The Peninsula Club in Cornelius [N.C.], which sits on Lake Norman’s shoreline, was one of a handful of N.C. country clubs receiving between $1 million to $2 million in loans, data show.
“And Ballantyne Country Club in Charlotte, which includes a golf course, nine tennis courts and four pools, received a PPP loan for between $350,000 to $1 million, records show.”
(The SBA lists grouped recipients in categories ranging from $150,000-$350,000; $350,000-$1 million; $1 million-$2 million; and $2 million-$5 million.)
The Observer’s report noted that “At The Peninsula Club, members enjoy a resort setting and can use a golf course designed by Rees Jones, club house and dining venues, tennis courts and a swimming pool, according to its website.”
The Observer reported that Christophe Hermine, The Peninsula Club’s General Manager Christophe Hermine, said on June 8th that the club was still waiting to hear from the SBA if its application will be accepted.
“We have not touched the money until we know if it will go through,” Hermine told the Observer.
While The Peninsula Club’s restaurants, golf course, tennis courts and pool are now open, Hermine added, like other businesses, the shutdowns in March affected the club with decreased revenue and worker furloughs, the Observer reported.
The Observer reported that a Ballantyne CC spokesperson did not respond to its questions about the PPP loan that the SBA records showed that it received.
Across North Carolina, the Observer reported, other clubs receiving $1 million to $2 million in PPP loans included Grandfather Golf and Country Club in Linville, The Country Club of North Carolina in Pinehurst, and Mountain Top Golf and Lake Club in Cashiers.
In an e-mail, Don Hunter, Chief Operating Officer of The Country Club of North Carolina, told the Observer that the loan was the only way the facility could justify keeping all of its employees, after its gym, pool, restaurant and catering business were shut down by Gov. Roy Cooper as a result of COVID-19 orders.
“The restrictions have caused major interruptions in revenues this year,” Hunter said.
Although North Ridge Country Club in Raleigh, N.C. was also listed in the SBA database, General Manager Jeff Earley told the Observer that club did not receive a PPP loan or “employee assistance, outside of the generosity of our membership.”
North Ridge did make a PPP application, Earley added, but “as the process played out, we learned that we would not be eligible for a loan, so we stopped the process,” the Observer reported.
In addition to country clubs, at least one North Carolina yacht club received a PPP loan, according to the SBA records, the Observer reported.
Figure Eight Island Yacht Club in Wilmington received $150,000 and $350,000, according to the SBA records, the Observer reported.
A club spokeswoman declined to comment when contacted by the newspaper, the Observer reported.
The Observer included in its report that “[the] yacht club is on a private island, with many prominent, wealthy individuals. Former U.S. senator and presidential candidate John Edwards, as well as banking and other corporate executives, have called the island home.”
The Observer’s report also listed these Charlotte-area golf and country clubs that received loans, and the categories in which they were shown, according to the SBA data:
▪ NorthStone Country Club in Huntersville, N.C. ($350,000-$1 million).
▪ River Run Golf & Country Club in Davidson, N.C. ($350,000-$1 million).
▪ Timberlake Golf Club in Charlotte ($150,000-$350,000).
Efforts to reach officials with those clubs were unsuccessful, the Observer reported.
Other North Carolina clubs and golf courses shown in the SBA data, as reported by the Observer, included:
▪ ($150,000-$350,000 category): Pinewood Country Club in Asheboro, Bentwinds Golf and Country Club in Fuquay Varina, Walnut Creek Country Club in Goldsboro, Moorehead City Country Club, Wilson Country Club, Old Edwards Club in Highland and The Club at Balsam Mountain in Sylva.
▪ ($350,000-$1 million category): Country Club of Greenville, Lake Toxaway Country Club, Governor’s Club in Chapel Hill and Champion Hills Club in Hendersonville.
In its report after the release of the SBA lists, the Minneapolis (Minn.) Star Tribune reported that “even some of the Twin Cities’ most prestigious country clubs [have] received six-figure help from the program.”
Hazeltine National Golf Club in Chaska, Minn. received $350,000 to $1 million through the PPP, according to the SBA, the Star Tribune reported. The private country club charges new members a $12,500 application fee, the Star Tribuneadded.
“This is not so much about our members,” General Manager Eric Rule told the Star Tribune. “Our revenues are way down. We had no banquet revenue in March, April, May and June.”
Without the loan, Rule added, Hazeltine probably would have furloughed 125 employees. “We used all of the funds to keep our employees paid,” he said.
Altogether, the Star Tribune reported, a dozen private country clubs in the region each received at least $350,000 through the program, including Bearpath Golf and Country Club, Golden Valley Golf and Country Club, Mendakota Country Club and the Town and Country Club of St. Paul, according to the SBA records.
A CNBC report on the release of the SBA lists lumped country clubs in with “billionaires, private jet companies and Kanye West” in describing recipients shown on the government records.
“Soho House, the exclusive membership club controlled by billionaire Ron Burkle, received loans totaling $9 million to $23 million by applying for seven loans through its New York, Miami Beach, Chicago and West Hollywood locations,” CNBC reported, adding that “Last month, Soho House raised $100 million from private investors, including Burkle, that gave the company a valuation of $2 billion—equal to its pre-pandemic valuation.”
All together, CNBC reported, more than 400 country clubs and golf resorts received PPP funding, according to the records released by the SBA.
CNBC reported that “The Greenbrier Hotel, which operates the famed luxury resort in West Virginia and is owned by billionaire West Virginia Gov. Jim Justice, received $5 million to $10 million [and] The Greenbrier Sporting Club, part of the residential development next to the hotel, also received $1 million to $2 million.” As part of illustrating its report, CNBC included a photo of Justice shaking hands with President Donald Trump and a caption that noted that Justice had switched his party affiliation from Democratic to Republican at a rally that Trump attended in 2017.
The Palm Beach Post’s report said that seven golf country clubs in Palm Beach County, Fla. may have received as much as $18 million in PPP loans, according to what the records released by the SBA showed. The Post added that some of the golf course communities that had accepted the loans had recently spent upward of $10 million on massive improvements to their clubhouses and golf courses.
The Post’s report listed these clubs receiving the loans and the categories in which they were listed by the SBA:
– Hunters Run Country Club ($2-$5 million) in Boynton Beach.
– Quail Ridge Country Club ($1-$2 million) in Boynton Beach.
– Wycliffe Golf & Country Club ($2-$5 million) in Wellington.
– Old Palm Golf Club ($1-$2 million) in Palm Beach Gardens.
– Banyan Cay Resort Club ($700,000-$2 million) in West Palm Beach.
– Boca West ($350,000 to $1 million) in Boca Raton.
– The Loxahatchee Club Homeowners Association ($150,000 to $300,000) in Jupiter.
In all, The Post reported, 57 country clubs in Florida accepted the PPP funds, while “scores of other Palm Beach country clubs applied.”
But some clubs in the region that were approved “decided to refuse to accept the funds on both moral grounds and legal grounds after reading the fine print,” The Post added.
“Government auditors are expected to review how the money was spent and can ask for the money to be returned and penalties to be imposed if they find misrepresentations,” The Post noted.
“At the end of the day, we decided we just did not need it,” said Stephen Wolk, President of Gleneagles Country Club west of Delray Beach, Fla., told The Post. “We could see the government looking very closely at how well-to-do country clubs were using these funds. How do you justify giving it to country clubs?”
Joshua Gerstin, a Boca Raton, Fla. lawyer who specializes in homeowner and condominium association law, told The Post that he expects one factor the SBA will consider is how much revenue a country club gets from its assessments.
“If it is mostly assessment-driven, the country club might have a problem,” Gerstin said. “If members continued to pay their assessments, there was no real loss of revenue. But if much of it comes from dining and other sources that members pay outside of their assessments, they could be eligible.”
According to the SBA, businesses must certify that the loan is needed “to support ongoing” operations and that they are unable to access “other sources of liquidity” to support their ongoing operations, The Post noted.
Michael McCarthy, General Manager of Addison Reserve Country Club in Delray Beach, told The Post that once he and the club’s board saw those revised requirements, they decided that it would be wrong to participate in the PPP program.
“There was no way I could certify that we needed it stay in business or that we didn’t have other sources of liquidity,” McCarthy noted.
“Also, there is a real issue as to whether this money was designed for country clubs when so many small businesses are struggling to stay afloat,” McCarthy added. “Some of our members asked us why we would return the loan. We then asked them if they would sign the certifications. They all said no.”
Michael Soroka, President of Hunters Run CC, declined to comment on the issue, The Post reported. According to the SBA, both Hunters Run and Banyan CC failed to provide data to indicate how many jobs were saved by the loans.
Wycliffe G&CC was chastised on CNBC for accepting its loan after the SBA lists were released, The Post reported. The Wycliffe loan was for $2 million, The Post reported, and was used to preserve 281 jobs.
In a statement to The Post, Wycliffe’s General Manager/COO, Rob Martin, said:
“At Wycliffe, we are thankful to all of our employees for their hard work and dedication through these challenging times. We took PPP money because we care deeply about our team and wanted to make sure that we had the ability to provide them a regular paycheck.
“Following the legal parameters, we only requested and received enough to cover our payroll needs and did not use our loan in any way to disadvantage other companies,” Martin’s statement added. “We are thankful that we qualified to receive money so that our employees and their families could make ends meet during these challenging times.”
William Langley, COO/General Manager of Quail Ridge Country Club, told The Post that the PPP loan received by that club was used as intended. Quail Ridge would have had to have laid off many of its 300 employees without the loan, Langley noted. “We are not a club with deep pockets,” he said.
The Club at Admiral’s Cove in Jupiter was one of those that returned the funds— $3.1 million in its case, The Post reported. “We saw too many issues, both moral and legal,” said Brett Morris, the club’s General Manager/COO. “We did not want to take the risks.”
Admiral’s Cove was able to keep its 500 employees working, Morris added, noting: “We found other things for them to do.”