Following a period of expansion several years ago at the Valley Club in Hailey, a new board of directors is scaling back its expectations.
Late last year about 100 members forfeited equity in their memberships and left the private golf club, rather than face uncertain financial obligations associated with club membership, according to club Treasurer Jeff Lubeck.
The Valley Club opened on the east side of Buttercup Road in Hailey in 1996 with 18 holes. Many area residents bought into membership for as little as $16,000. When members took over ownership of the club in 1999, market pricing and ambitious development plans eventually sent the cost of memberships soaring.
A few years ago full golf memberships sold for $125,000. Today a floor of $20,000 has been placed on their diminishing value by a board of directors that is trying to regain the original vision for the club—a place where a diverse group of golfers can afford to play.
More than half the people who quit the club in December were locals. Seventy percent of the club's current members are from out of state.
"I think the board we have now more accurately reflects the constituency of the members of the club," said Lubeck.
Lubeck said that under board Directors Al Shumaker and Doug Rhymes, the club made plans to become one of the premier golf clubs in the Rocky Mountains.
"Achieving this was much more difficult than they imagined," he said.
In 2003 the club expanded its 18-hole course to 27 with nine holes designed by premier course designer Tom Fazio. It built a recreation center and launched a $6 million, 13,000-square-foot expansion of its clubhouse.
"We needed more holes because of the number of members we had," said General Manager Barry Bevers.
That expansion phase has cost Valley Club members from $10,000 to $15,000 in assessments, while membership dues increased about 8 percent per year.
When the clubhouse expansion ran $3 million over budget, a disgruntled group of members pressured the board to be released from their memberships.
"Once we saw the overruns, we could have stopped construction," said Valley Club General Manager Barry Bevers. "But what kind of message would that have sent to the community?"
Lubeck, who joined the board last year, said only initial plans and estimates for the clubhouse expansion were completed when club members voted on it.
"When construction began, final plans had not been completed," he said.
Lubeck said that under new policies and procedures established at the club, "this would not be allowed."
The board decided to move ahead with the clubhouse construction, causing an exodus of about 100 of the club's 670 members, who abandoned their memberships rather than face uncertain financial obligations in the future.
Equity in the abandoned memberships has gone back into the treasury at the Valley Club.
Lubeck, a business management consultant who lives at the club, said that since the 100 members fled, the board's finance committee has succeeded in cutting $1 million in cost overruns associated with the clubhouse expansion, and about $600,000 in the club's operating expenses.
"We are going to operate in the black this year, despite the state of the economy," Lubeck said. "Our goal is to have no dues increases for next year. We have made changes that reflect our view that we should live in our own house and be able to afford it."
Valley Club plans include expanding the course to 36 holes by adding another nine holes across Buttercup Road on Peregrine Ranch property belonging to Harry Rinker. Bevers said Rinker has agreed to donate enough property for the additional nine holes, where he has plans to build 72 homes, if the club agrees to build and maintain the course.
Lubeck said an extension onto Peregrine Ranch would have to go to a vote by club members. He said he hopes that some of the changes at the club may lure back members it lost last year.
"If they come back it will have to be on their own terms," he said. "But if they see that it is a comfortable place once more, we hope that they do. The Valley Club is a social club where you want to feel good about spending time together with other members."
Tony Evans: firstname.lastname@example.org