Two news items from last week about the state of private golf clubs on Long Island:
First, Newsday reported that developer Don Zucker purchased North Shore Country Club in Glen Head for $12.5 million. The winning bid was coupled with a proposal to renovate the facility, include the construction of a ‘world-class’ spa. The club fell into troubles due to the economy and member’s losses related to the Bernie Madoff ponzi scheme.
Next, Newsday took a look at Woodcrest Club in Syosset. Woodcrest lost 50% due to some questionable management decisions. Heavy debt and a worsening economy (surprise, surprise) forced some short-term gimmicks to boost membership revenue. New members changed the feel for long time members – who also paid more to join. Financial issue still plagued the club; the board recently announced that they were considering selling.
Newsday followed up this news with a deeper look into LI’s private country club membership woes…
One country club has been sold, another fights to stay open and others have lowered dues and scrapped fees to entice new members.
The economy and imprisoned financier Bernard Madoff’s $21-billion Ponzi scheme have knocked out some good times at Long Island’s swanky clubs, owned by members who pay five-figure fees each year.
Some of the Island’s 75 clubs have lost scores of members in one year — and as much as $500,000 in dues per club in one stroke — and trimmed staff or let go of seasonal workers early. A few have charged the membership “deficit assessments,” including $2.5 million in one year at one of the clubs.
Certain damage-control strategies have backfired, and others could be just short-term breathers to talk of club mergers, sales and closings.
Decline over the years
“The industry has been under pressure for a number of years now,” said David Shaw, head of the Greenvale-based Country Club Advisor, which filed an employment lawsuit against the metro-area club managers’ trade group.
“When the Madoff situation hit, it caused such a rupture in membership losses. . . . I have heard of a handful of clubs that were affected by between $600,000 and $1.1 million in 2008,” Shaw said. “That is occurring again right now, so the cumulative effect is really getting tough to absorb.”
Last week, after several years of revenue shortfalls, the North Shore Country Club in Glen Head was sold to Manhattan developer Don Zucker, who plans to continue it as a club.
A year ago, the September economic meltdown was just starting to hurt the clubs, but Madoff was not arrested until December, after most members had paid their dues for 2009.
To foil Madoff’s delayed impact, clubs sent mailings this fall to potential members. Others dropped onetime joining fees for people who would leave their current clubs. Certain clubs even ditched some rules, such as minimum amounts members must spend each year dining.
The result? While some clubs still fell short, others say they have wait lists to join.
The Pine Hollow Country Club in East Norwich was eager to attract newcomers 44 and younger, who might pay to book events there. Dues for them fell from $22,000 to $16,000. In all, 66 families joined, making up for the 20 lost last year.
“The whole idea is to bring in young families,” said Shawn Elliott, who is on the club’s membership committee. “They have their bar mitzvahs there, they have their weddings there.”
‘Cannibalizing each other’
Still, the country clubs are uneasy. Have membership drives shriveled up demand? Will newcomers be loyal or shop for the best deal next fall?
“They’re cannibalizing each other’s members,” said Michael Pascucci, owner of the Sebonack Golf Club along the Peconic Bay in Southampton.
Clubs used to spend big, booking famous rock bands and laying out feasts, but no more. In a sense, they’ve loosened their ties, allowing jeans sometimes, putting out self-serve buffets and shifting focus to families.
“In the old days, you wouldn’t think twice about putting out Beluga caviar,” said Joseph Guerra, interim club manager at Cold Spring Country Club in Cold Spring Harbor. “Now, is it really a necessity?”
Even spending on the heart of the clubs — the velvety grass — has gotten the chop at Sebonack, where the 2013 U.S. Women’s Open will be played.
“It doesn’t have to be bright green to be healthy,” said Sebonack owner Pascucci, who also owns Long Island’s WLNY television station. He’s going organic on the grass.
But changing spending habits has not been easy.
After the Sept. 11, 2001, attacks and the depressed economy that followed, the rolls at Tam O’Shanter Club in Brookville fell from 245 to 190, board president Larry Holzberg said. Dues were cut to retain members and short-term debt consolidated into long term, but that started five years after the attacks.
“For the first couple of years after 9/11, we kidded ourselves and said, ‘Everything will be fine,’ ” said Holzberg, an insurance industry executive. “Somehow, no matter what club you go to, really successful people sometimes turn their business heads off when they come to the club.”