After the Tucson, Ariz., club defaulted on its $3.5 million loan last year, it hired Arnold Palmer Golf Management to turn things around, but the company required the financial support of homeowners in the community as a precondition. An estimated 45 percent of homeowners are club members, and the proposal to raise homeowners association annual fees for the next 25 years has been approved.
Facing declining membership and the threat of foreclosure, Skyline Country Club in Tucson, Ariz., recently turned to homeowners in the surrounding gated community—Skyline Country Club Estates—to save the private club, the Tucson-based Arizona Daily Star reported.
The club defaulted on its $3.5 million loan with Northern Trust bank last year, after losing more than one-quarter of its members since 2006. The club has hired a third-party manager, Arnold Palmer Golf Management, to turn things around, the Daily Star reported.
But the management company required the financial support of homeowners in the gated community as a precondition of its contract. Last year, club leaders organized a series of town-hall meetings, and a door-to-door and email information campaign, to persuade all homeowners to help them pay for the contract. An estimated 45 percent of homeowners are club members, the Daily Star reported.
In December, homeowners approved the proposal to raise homeowners association annual fees for the next 25 years and to use the revenue to hire Arnold Palmer Golf Management, the Daily Star reported.
“We wanted to bring in world-class management,” said club board member and Estates homeowner Joan Sweeney. “A country club is a very complicated business. You have a golf course, you have fitness, you have dining—there are so many moving parts. It’s very, very difficult for clubs to be self-managed in this modern world.”
A separate voluntary fundraising campaign raised enough money to reach a settlement agreement with Northern Trust. The settlement was finalized February 14, Sweeney said, but she declined to provide details on the settlement amount, the Daily Star reported.
General Manager Lonnie Lister, who has been in that position since late 2012, declined to comment on the situation, the Daily Star reported.
Skyline Country Club likely would have been foreclosed on without the approval of the proposal to increase homeowners association fees, according to emails from supporters of the proposal. The emails warned homeowners that Estates property values would take a big hit if the country club closed, the Daily Star reported.
About 80 percent of homeowners voted on the proposal, and 86 percent of those voted in favor, said Pam Bass, immediate past president of the Skyline Country Club Estates homeowners association.
In exchange for the higher fees, homeowners who aren’t country club members get access to some of the country club’s perks, like monthly dinners, one day a month of free tennis, and one free round of golf each month after time requirements are met, the Daily Star reported.
“It does appear to be a little unfair,” said club member and homeowner Ralph Richard, 83, who has lived in Skyline Country Club Estates for 10 years and voted against the proposal. “There’s a significant number of people out there that are not members of the club, and they’re really not interested in the involvement it takes to get the club back upright again.”
But longtime resident and club member Robert Morken said the proposal benefits both members and homeowners. “Most people that live here realize the importance of having a healthy golf club.”
Around 2007, the club refinanced its debt with Northern Trust and then went on to expand its banquet facilities, renovate and update its fitness facilities and make other improvements. When the recession hit, membership began to decline, cutting into revenues, Sweeney said.
Skyline Country Club had 575 members in early 2013, compared with 787 in 2006, according to a PowerPoint that was shown to more than 200 Skyline Country Club Estates homeowners during a town-hall meeting. Golf memberships are down from 462 in 2006 to 290 in 2013, the Daily Star reported.
Country club leaders declined to provide the latest membership or revenue figures, or comment on the figures in the PowerPoint.
Under the agreement with Arnold Palmer Golf Management, the club will lease its assets and operations to APGM, which will have full control of the club, Sweeney said. “They have a stellar track record of turning clubs around.”
Doug Howe, partner with Arnold Palmer Golf Management, said a campaign to boost membership, plus create more family-centered offerings, will be crucial to improving the club. Tucsonans have more than 40 options to play golf in the area, so the country club has to offer more than that, he said.
“More people are into fitness, they’re into eating healthier, they’re into swimming. You have to provide more than just golf to attract the whole family, and that’s really our goal,” Howe said. “The future is extremely bright for Skyline Country Club, and we’re excited to be a part of it.”
The 25-year contract—which pays APGM $164,731 in the first year, rising to nearly $600,000 in the third year—required that homeowners’ annual fees increase by 20 percent each year for three years and remain at the heightened level for the following 22 years, the Daily Star reported.
For a homeowner with a single-family home, annual homeowners association fees will increase from $1,792 to $3,097 by year three, according to the ballot, the Daily Star reported.
Estates homeowner and club member Terry Evers, 63, said the fee increase could burden some residents who are no longer working. Evers, who voted against the proposal, said it would have been a better investment to turn the ailing club and golf course into an open green space, the Daily Star reported.
“I just don’t see that golf courses are making it anywhere around the country,” she said. “If they don’t turn golf membership around, what happens then? Are they going to come back for more money?”
Estimates showed a park conversion would have been cost-prohibitive, Sweeney said. “We own 80 acres. It would have cost the residents more than what it would cost to keep the club open and operating,” she said.
Club board members asked a local realtor from outside the community to email residents with her take on Estates property values, the Daily Star reported.
“Do not let your beautiful green neighborhood perish,” wrote Robin Sue Kaiserman, vice president with Long Realty in Tucson, in an email to homeowners. “I advise you from a business standpoint to vote yes on all ballot items. Save Skyline Country Club, save Skyline Country Club Estates and save your own property values.”
Evers, who voted against the proposal, said she doubts property values would have been permanently hurt. Golf isn’t the main reason people buy homes in Skyline, she told the Daily Star. “They come to Skyline because of the location, the 24-hour guard gate, the natural setting and beauty of the place, and its proximity to town is wonderful,” she said.
Estates homeowner Pamela Barr, who is not a club member, said she voted in favor of the proposal. “They’re trying to give the neighborhood access to the country club, so we can see how it would benefit us even more.”
The campaign wasn’t meant to pressure homeowners but to fully disclose the effects of closure, Sweeney said. “I don’t call that high-pressure—I call that good information. When you’re going to vote on something that impacts a community, you need to have all the facts on the table.”
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