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February 2017

Reading Between the Lines

readingbetweenthelines.jpgBy Kyle Darbyson

To stop redevelopment of Pennsylvania’s Reading Country Club, local officials used eminent domain to take over the property. A decade later, they’re working to fix a decision that ended up haunting the facility

While most never play there, the citizens of Exeter Township outside Philadelphia are proud to have Reading Country Club in their community. So when the owner announced in 2006 that he was going to raze the 50-year-old club to make way for a vast residential development, locals were predictably upset. They signed petitions, flooded politicians’ phone lines and made their opposition abundantly clear. Officials had no choice but to act, seizing the course through eminent domain.

Township manager John Granger says that, at the time, it seemed like a significant win for the area. “Homeowners around the property, golfers, members—nearly everyone was happy.”

Now, 10 years later, it’s clear the transaction was far from the universal triumph. The costs associated with the eminent domain seizure had saddled Exeter Township with crippling debt, and with significant tax revenues being diverted to service that debt, citizens have started to ask hard questions about Reading’s place in their community.

Granger and other club administrators knew they needed to act to save their troubled asset. The math was daunting—Exeter Township had paid close to $18.5 million to secure Reading Country Club, which sent the price tag soaring because of costs associated with the eminent domain seizure. The township was forced to pay out the contractor originally slated to build the residential units on the site on top of other court fees and upgrades to the course itself. The township decided to take out a 40-year loan, with payments of approximately $850,000 per year until 2025, when they escalate to $1.1 million until 2045 when the loan is satisfied.

“The course returns between $50,000 and $100,00 in profit each year,” Granger notes. The club also leases its clubhouse to an outside F&B vendor, bringing in another $250,000. The gap is made up by local taxpayers.

The solution sounded simple enough: “We had to increase the number of rounds played,” Granger says. Township officials know the club will never be self sufficient, but also realize it has to pull more of its own weight. “We can lessen the tax burden on residents if we fully utilize the course and control costs.”

Reading currently hosts less than 20,000 rounds a year, but officials have set a plan in motion to increase that to 25,000. Granger says part of that plan involves him taking a step back. “I’m the city manager, so I can’t really give the operation the attention it needs.” He led the search for a full-time general manager, eventually tapping Dave Speece, a local with strong ties to the course.

“I grew up at Reading Country Club,” Speece says. “My mom would drop me off in the morning and my father would meet me after work to play my final 18. Sometimes 72 holes a day.” After leaving for Fordham University on a golf scholarship, Speece built a successful career in the chemical industry, including a decade based out of Shanghai. “As I was planning retirement, my wife and I found a lot for sale on the 13th hole of Reading and decided to build a house.”

Speece had been following the club’s troubles with interest from afar. When he heard officials were looking for help tackling the debt issues at his beloved course, he decided to forgo retirement and apply. “I like to find ways to solve difficult problems.”

According to Speece, the first order of business was to start changing preconceived notions that permeated the community. “I heard the greens are too fast, the fairways are too narrow, and the trees are too large and overgrown,” he explains. Cutting back trees, adding tee boxes and widening fairways are all on slate as Reading tries to shed its difficult reputation and attract more casual players.

In a similar vein, Speece, Granger and the board at Reading sat down to redefine their membership offering. The club was originally only offering two membership tiers: a five- or seven-day package. “You can’t just offer one product and expect to satisfy the broader market needs,” Speece notes. They studied other local courses that were succeeding in the saturated market and determined several categories Reading needed to address. “We added young professional, non-resident, weekend only, off-peak only, corporate, student and multi-round packages of 10, 20 and 40 rounds.”

Even as cost cutting and efforts to attract new members are taking effect, impatient locals have started to circulate other ideas. “There’s been talk about holding festivals here, maybe even turning it into a park,” says Granger. But he and Speece are both confident the club will remain a golf facility. “It’s a really terrific asset for us to market Exeter Township to new people and businesses,” says Granger.

Speece is certain the changes being implemented have Reading on the path to sustainability. “If we are able to contribute more to servicing the debt, everyone in the community will be proud to keep Reading as a cherished part of the community.”

Kyle Darbyson is a Vancouver-based freelance writer.

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