Did you ever notice that politicians always want to tell us how great things are? We’re all way too familiar with the current Coronavirus issues yet some of our political leaders seek to make us believe everything’s just fine.
Country clubs have the same issue. Those in club leadership consistently seek to tell us what great shape the club is in until it’s not. We’ve all heard the term “kick the can down the road” and many clubs have failed because of leadership’s inability or unwillingness to confront controversial problems, often created by neglect.
Assessments and dues increases are greeted with the same enthusiasm as tax increases. Members often have alternative options. Is the club prepared for large capital requirements?
The American Society of Golf Course Architects (ASGCA) says in its Life Cycle Chart that irrigation systems last from between 10 and 30 years. Just looking at the properties we’ve observed this year, the age of irrigation systems ranged from 10 years to 50 years and many are in the 20-30 year range.
If the club hasn’t planned for replacement of the system, it’s not likely that an assessment can be avoided unless the club has the cash to pay for the new system.
As shown in the ASGCA publication, there are quite a few golf course components that simply wear out and require planning for replacement. Just like our homes, the buildings wear out as well (roof, HVAC, plumbing, etc.) thus clubs need to establish adequate reserves for replacement. If they don’t, even before the capital investment is needed, EVERYTHING IS NOT GREAT.
Deferred maintenance is present in most golf & club properties, especially those that have experienced distress and are the most likely to be marketed for sale. While establishing reserves to address these items is recommended, it’s not often done and it can impact value in a significant way. Even simply identifying and analyzing a club’s deferred maintenance is strongly recommended, if just to know where the problems are and for the benefit of potentially contesting the club’s real estate tax assessment.
Most of us see our clubs as a recreational escape from the many problems we face elsewhere in our lives. For members at member-owned clubs, especially those who choose to become club leaders the responsibility is now theirs. The often “rose colored” emails distributed by leadership and management to members don’t always tell the whole story. There are clubs where leadership only wants to escape their term with no assessments or dues increases. Transparency about all club business, especially the real condition of the property can avoid resistance when it’s time to reinvest and preparation allows projects to be done in a timely and efficient manner.
As a part of regular club planning, we recommend periodic facilities and equipment analysis to ensure that clubs know where they stand and hopefully prepare for capital needs. It’s good business and provides the club with long-term stability in offering members a quality experience.