Minnehaha CC and Westward Ho CC, both in Sioux Falls, were cited for investing in their facilities and honing programming to appeal to a broader demographic.
A feature article in the Sioux Falls (S.D.) Argus Leader highlighted how two private clubs in the state’s largest city have positioned themselves to counter national trends of declining memberships by investing in their facilities and honing their programming to appeal to a broader demographic.
The article began by relating that when Dana Dykhouse, Chief Executive Officer of First Premier Bank, was asked to attend a golf invitational 25 years ago at Minnehaha Country Club in Sioux Falls, he and his guest were asked to go home and change clothes before dinner.
But today, Dykhouse told the Argus Leader, “there would be very few people with coat and ties on for the championship dinner”—and in fact, a recent party at the club encouraged members to dress as characters from the movie “Caddyshack.”
“Twenty-five years ago, that would be unheard of at Minnehaha,” said Dykhouse, who is a member of Minnehaha and also Westward Ho Country Club in Sioux Falls.
“Country clubs in general have become much more casual in the approach to dress and other things,” Dykhouse told the Argus Leader.
This spring, the Argus Leader noted, Westward Ho CC will start a multiyear, $12 million project to construct a larger clubhouse to replace its 60-year-old facility. At nearly 40,000 square feet, the new clubhouse will include a banquet room to seat 350, with an adjoining outdoor area for special events.
“It will be perfect for weddings, family reunions, concerts, just a great space, which is something we don’t have today,” General Manager Tim Walton told the Argus Leader. “It may exist somewhere in town, but I don’t know where with these amenities.”
The two-story clubhouse also will include a main dining room that can seat about 120 people, a sports-themed lounge for people 21 and older, and a wine room that will be a multipurpose area that can seat up to 50 people.
“You could do wine dinners, play cards, there are many things you can do there,” Walton said. “And what I really love is we have a western-facing patio that seats 60 with a fire pit. And we’re building up, so you will be able to have a view of the long course.”
The clubhouse also will include a pro shop, golf simulator and fitness center that will overlook a new swimming pool. The pool will be 4,500 square feet and include a 15-foot bench area in 3 inches of water, as well as a kids’ activity pool, the Argus Leader reported.
Those amenities will be completed by the start of the 2015 golf season, and more improvements to the golf experience at Westward Ho are scheduled to be completed in the following years.
“We have a lot of land, and we’re going to improve our practice facility to take it from more of a place to warm up to a place that allows you to work on your game,” Walton told the Argus Leader. “And we will redo the 13 remaining greens that haven’t been improved. I see all this being completed in the next 3 1/2 years.”
Walton came to Westward Ho almost two years ago from a management firm in Florida, the Argus Leader reported, where he worked with distressed private clubs.
“I was the turnaround expert guy,” he said. “You could tell by looking at revenues, without being in the facility, if it had the potential to survive.”
When he was approached about running Westward Ho, the Argus Leader reported, Walton felt that the club had “super potential … and just needed to be managed from an operating-expense standpoint.”
“We run efficient. We don’t run thin,” he said. “That’s the real key. The membership base is strong. Any club in the country would accept the membership base we have.
“There’s no question with what we’re doing that we will stand out as the best private club available,” Walton said. “That’s a bold statement, but I believe that with all my heart.”
The Argus Leader article also included comments from William P. McMahon, Sr., Chief Executive Officer of the McMahon Group Inc., St. Louis, Mo., about the steps that clubs are successfully taking to turn around the trend that has seen the total number of private clubs decrease 10 percent nationwide between 2000 and 2010, following a 6 percent decline in the prior decade.
“The big issue is the next generation, 55 and younger, is not playing golf like their father and grandfather did, and that’s where the original clubs were targeted,” said McMahon, whose firm specializes in private club consulting. “Younger men don’t have time to play. They have responsibilities now like I as a father never had. They’re expected to watch the children because [the mother] works, too.”
For private clubs to survive, they need to focus on providing value to members’ families, McMahon told the Argus Leader. His firm’s studies have found that the most important factors are the swimming pool, fitness facility and bar lounge.
“Those are the three areas that drive social interaction, which is what the club is supposed to be about,” he said.
Sioux Falls attorney Tom Welk, who has been a member of Westward Ho for more than 10 years, told the Argus Leader that the club has been completely changed by Walton’s management. The planned improvements are designed to position the club for growth in the next 50 years, Welk told the Argus Leader.
“Strategically, our mission has been family-centered, and we hope this facility will for the next 50 years be attractive to all our members and attract more families where they will want to spend their time,” he said. “The key is to have a mix of old members and new members and try to attract them and keep them as we all change our lifestyles.”
Welk has been a member of both clubs in Sioux Falls and is part of a committee helping design the Westward Ho improvements, the Argus Leader reported.
“We’re going to have two strong country clubs that will be attractive, and when new people come to town, they will have choices,” he said.
When Susie Patrick joined the Board of Directors at Minnehaha Country Club, she became the first female board member, and then president, in the club’s century-long history, the Argus Leader reported.
“It was great,” said Patrick, who grew up going to the club with her parents and grandparents. “I think at the time I sat on the Board they were very ready for a female perspective on what was happening at the club, and I think it helped shape the next 10-year plan.”
The Board restructured the balance sheet and added membership options designed for young families, Patrick told the Argus Leader.
“And as you recruited those young families, it was listening to them and finding out what they wanted,” she said. “It’s really transitioned to a membership-driven club.
“I have to give the staff out there a ton of credit,” Patrick added. “And we really try to make it a good value. That’s a question we ask when we’re making decisions: ‘Is this a good value? Will we get a good return on our investment?’ ”
Minnehaha CC has made substantial improvements to its 1960s clubhouse, Dykhouse said, including new locker rooms and a renovated pool area, playground, dining and snack bar. In conjunction with city improvements to the levee system that adjoins the club, Minnehaha also updated its golf course.
“We kept the traditions of Minnehaha and the design of a club that’s over 100 years old, and yet updated the golf to some of the modern conditions,” he said.
The changes have paid off, the Argus Leader reported, with the club now at capacity for full-service memberships.
Dykhouse, who said his children grew up as some of the few using the club’s swimming pool, now sees it packed when his grandchildren visit.
“When my kids were young, there wasn’t much for them to do at all, and now it’s a more fun atmosphere for kids,” he said. “Even Sunday brunch includes a kids’ buffet. There’s a two-for-one burger night. To think of Minnehaha holding a two-for-one burger night … and it’s probably one of the most popular events they have. So they’ve broadened their range.”
The club also is considering how to add outdoor dining, Dykhouse said, which fits a national trend.
“Clubs are focusing on family, they’re focusing on fitness, they’re focusing on how do you speed up the pace of play and make their food and beverage a unique experience,” Kevin Reilly, a partner in PBMares LLP, told the Argus Leader. “They’ll have outdoor fireplaces. Outside dining is one of the most popular things you can find at a club, so they’re really trying to do things to become your go-to place.
“It just takes so long to play a round of golf,” Reilly added. “It used to be you could do all your deals on the golf course. But if you don’t have four hours to spend on the golf course, it does have some issues. It’s not as common.”
McMahon agreed, adding that 20 years ago major accounting firms would mandate that their partners join clubs to do business.
“That’s not the case anymore,” he said. “Business isn’t done at that level. There’s some of it there because you’re associating there, but it’s nothing like it was. It’s mostly a social and family type of environment.”
Many companies also have cut club memberships from executive compensation, and in the 1980s, it stopped being tax-deductible, McMahon added.
“Business has tried to get away from that because it looks like luxury,” he told the Argus Leader. “Especially if you’re a publicly held company, any club memberships have to be listed in the annual report, and even the chairman doesn’t want that listed.”
Country clubs, however, still have a place in the Sioux Falls business community, the Argus Leader noted. Dykhouse said he invites clients or potential clients to his clubs multiple times weekly, and also uses them for employee recognition and special events.
“It’s just a nice setting either one-on-one where I will take a client or potential client to lunch or dinner, or a group setting because they have individual rooms and the flexibility of different-size rooms,” he said.
Welk, a partner in the Sioux Falls law firm of Boyce, Greenfield, Pashby & Welk LLP, said he mostly uses his club membership socially and for golf, although he takes clients to lunch and has used the clubhouse for private meetings.
“I think people do use it, some more than others; it depends on the nature of the business,” he said. “But in the legal world, most people belonging to the country club already have a lawyer, so you use it to entertain clients. But for my wife and I, it’s mostly personal use.”
Clubs also are a good venue for networking and brainstorming with other businesspeople, said Patrick, who owns the Breadsmith franchise in Sioux Falls.
“You can be dining out there and have a casual conversation with a colleague or contact, and it’s a no-pressure deal,” she said. “You’re just having a conversation, but it can lead to great things.”
The new GreatLife Malaska Golf & Fitness Club also has a role to play in sustaining the local country clubs as it offers unlimited golf and fitness at partner facilities, President Tom Walsh told the Argus Leader.
“Golf is expensive. It’s time-consuming and it’s growing older and it’s dying,” he said. “With this concept, you take the barrier off financially, and you don’t have to play 18 holes and you do things together outside.”
As more people become fans of the game, they will become potential country club members, said Mike Malaska, a GreatLife partner and nationally known golf instructor.
“If this doesn’t happen and we don’t engage people that wouldn’t normally play and kids coming into the game and get them emotionally involved in golf, 10 years from now those country clubs will be in trouble,” he said.
Opinions are mixed on whether Sioux Falls could support an additional country club, the Argus Leader noted. Some studies suggest the population base (162,300) is large enough, while other industry experts say two might be an ideal fit for the market.
“What the economy has done is forced clubs to rethink their missions, who they serve and what they provide,” McMahon said. “And it was probably good for the industry.”