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May 2018

Second Chances

second.jpgBy Kyle Darbyson

Club at Wynstone Survived Survival Mode

You might not guess it by the packed dining room or robust tee sheet of today, but only a few years ago the Club at Wynstone (then known as the Wynstone Country Club) was plainly in survival mode.

Like many facilities in the early 2000s, this Illinois-based private equity club had financed major beautification projects through debt. Then, the tsunami of changing demographics and global recession decimated the club’s membership roll.

Long-time board member Dan Murphy remembers the dark days: “There was an impending sense of doom at the club, you could really feel it.”

Increasing attrition meant fewer members servicing the debt. It also left those remaining members exposed to potentially punishing year-end assessments. Thus began a spiral that put Wynstone at real risk of bankruptcy.

“We were net negative in our growth,” Murphy says. “There was a cloud over us, and we just couldn’t attract anyone.”

Desperate, the board engaged a broker to find a buyer. “We received two bona fide offers,” remembers Murphy. Unfortunately, both would have kept the debt on the books and members on the hook for all of it. That was a business model all stakeholders at Wynstone considered unsustainable.

Most members had a lot to lose, including Murphy. He and his wife had moved into the gated community that surrounded the golf course. “There is an obvious correlation between the success of a golf course and the value of a house on that golf course.”
So, nine families belonging to the club got together and put forth a proposal of their own; one that crucially retired all $6 million in debt. Membership voted 87-0 to accept their bid. 

Aside from removing the debt obligation, Murphy et al also articulated an ambitious vision — nothing short of establishing the Club at Wynstone as the most sought-after, full-service club in Illinois. “All the pieces were there, we just needed to put them together in the right way.”

Their first move was an important one. “We all do something well in our professional lives, but it’s not running a private golf club,” Murphy admits. So, they tasked Arnold Palmer Golf Management with overseeing the day-to-day operation.
They worked together to achieve their next goal — growing membership.

“Call it audacious if you will, but we wanted to grow to the point we need a waiting list,” he said. To this end, initiation fees were eliminated and dues restructured. “As they stood, both were roadblocks to us getting back on track.”

Cognizant of the investments made by existing members, the plan also called for equity redemption tied to the club’s performance.
The new investor group poured considerable resources into modernizing the club. Deferred maintenance was addressed, dining areas expanded and enhanced, and a renewed focus placed on the social aspect of the Wynstone experience.

“Our geographic area says we only get about five months of golf a year,” Murphy explains. “If that’s the case, you’d better have a lot to do the other seven months.”

Their efforts have paid off. In only a few months, dozens of new members have signed on and that “pie-in-the-sky” waiting list is already in place. “We achieved it a lot sooner than anyone thought.”

With more stable financial footing, the Club at Wynstone is finally free to focus on the future.

“It’s like that cloud has been lifted,” says Murphy. “Instead of worrying about where the next payment is coming from, we can look five, or 10 years down the road and start planning for what’s next.”  

Kyle Darbyson is a Vancouver-based freelance writer. 

 

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