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How to Improve Club Facilities: Insight on Project Financing

Maintaining and continuing to improve club facilities is a continual challenge for every club. Falling behind in the reinvestment in the key aspects of a private club can seriously affect membership retention and usage. Also, it will have a dampening influence on a club’s ability to attract new members. With clubs having to face major improvement programs every seven to ten years, it is important to understand the planning process and financing options that achieve the best results. The recommendations and examples explained herein are based on actual experience with more than 800 club planning projects for clubhouses, golf courses, city clubs, country clubs, golf clubs and tennis clubs,

In reviewing how and why club projects are done, there is never a perfect time. Most clubs renovate and improve facilities when the need arises. While the overall economy can influence a decision to renovate the clubhouse or golf course, it is usually never the deciding factor. Each club must understand its own situation and its membership’s financial ability as it strives to maintain the best possible facilities. Because project financing and members’ willingness to pay for high priority improvements is critical to facility project success, heavy emphasis is placed on this aspect of facility planning. 

The Process for Planning

Developing a successful improvement program for a club can be distilled to seven basic steps to achieve the best results.

  1. Obtaining good input from the membership on satisfaction with all aspects of the club inclusive of facilities, dining, golf, etc. This is usually accomplished with focus groups and surveys to members. In this step, it is critical to test the relative importance of various improvement projects and the willingness of members to pay for an improved club.
  2. Understanding the existing conditions of facilities is an important step before necessary improvements can be proposed. Actual conditions should be investigated, defined and priced. By presenting good, factual information on the current condition and proposed improvements/upgrades members will understand better the need for facility improvements.
  3. Developing the best, value-added, facility planning solutions with easily understood drawings, illustrations and computer generated visuals so members clearly understand what is being proposed, how it will affect them and that it is feasible both architecturally and financially.
  4. Creating a project funding plan with financing methods that members feel is fair to all membership categories and that is achievable without great risks.
  5. Properly communicating the proposed project so members feel informed enough to make a decision.
  6. Achieving project approval by securing strong membership support in the voting process.
  7. Implementing the design and construction of the approved project on time, on budget and at the quality level as promised.

Membership Input

While a club’s leadership and management may have a good sense for facility deficiencies, it is absolutely essential to know how the membership-at-large feels about the issues. It is infinitely easier to get a membership to approve a facility project that it wants; versus trying to force an unpopular, unsupported project on them. Thus, the initial step in successfully directing a facility project is to conduct focus groups and a specially crafted membership survey. Survey results should indicate what improvements are needed and how much members are willing to spend to make them happen.

Facility Conditions

Achieving members’ support for improvements is best accomplished within the context of understanding the actual existing facility conditions. All deficient facilities should be investigated by engineering and architectural experts as to actual conditions, the best ways to fix problems, and the various options including capital and operating cost impact. This analysis of existing conditions should be explained to members and used to justify a recommended improvement program.

Developing the Plan

With membership input and existing facility conditions available, a club is ready to develop the best, most value-oriented plan and program. This facility planning is best accomplished by a specially appointed committee of club members representing all age and use groups within the club. Contrary to the natural instinct, the planning committee should not be composed of members who are architects, interior designers and contractors. These construction-oriented members will be needed later, during the final design and construction phase of a project. But in the early planning and approval phase of a project, the planning committee’s role is both political and user-oriented. The committee should bring credibility to the planning process as they know how the club’s facilities are used, and they should represent the various membership factions, i.e., men, women, different age groups, golfers, young family adults, more senior adults, etc.  The club planner who works with the committee should be the workhorse for the committee in developing space programs, floor plans, costs and financing options.

The planning committee works with the club planner to develop the right plans architecturally, financially and politically. Only after a facility plan is approved by the members should a club hire its final architectural and construction implementation team. The rationale is that until a club actually knows what improvements are needed (new clubhouse, renovation, major work or minor work) can the right, final architect be selected for the project. For a golf course project, this planning is usually done by an expanded greens committee and the golf course architect. Often times it is advisable to combine a clubhouse and golf course project in one program so everyone has a reason to support it.

Financing the Program

Everything proposed in a facility improvement program costs money, and for the most part the improvements will not provide a “return on investment” to fund the project costs. High-quality private clubs by their nature are service-oriented, not profit-oriented. So most improvement programs require funding sources and financing plans beyond a club’s operating income. Raising funds for facility projects can be accomplished in many ways. Each club will have its own opportunities that must be studied when trying to identify all possible funding sources. It is always the ability to raise funds and at what amount that ultimately determines the scope of any facility project. For a review of some of the most frequently used funding sources, see the sidebar on page xx.

The Approval Process

Most clubs require a membership vote to approve a major project. Even clubs with bylaws silent on the voting issue should have a membership vote, especially if there’s an assessment. The presentation and voting process achieves membership buy-in and support for what can sometimes include controversial issues. Project approval should include town hall meetings, mail-out brochures, follow-up meetings, telephone-get-out-the-vote calling, and if at all possible, absentee voting options.

Final Design & Construction

Upon achieving membership approval, a newly appointed implementation committee should take over the project. It selects the final architect, interior designer, contractors and project manager. The financing aspects for the project should be set into motion with negotiating bank loans and member payments for any assessment need to start immediately.

Clubhouse and golf course improvement projects are an ongoing necessity that clubs must face in order to stay viable. A club should be doing a major upgrade project every seven to 10 years just to properly maintain first-class, quality facilities. Clubs that fall behind with facility conditions can be seriously impacted with declining membership numbers and usage. 

It is each board’s and general manager’s responsibility to lead their club with a good vision to the future and a commitment to maintain a first-class club with first-class facilities.

William P. McMahon, Sr., AIA, OAA, is chairman of McMahon Group, Inc., a full-service consulting firm dedicated to serving private clubs in all aspects of their facility planning and strategic planning.