The Kenwood Press|
Oakmont Golf Club to be put up for sale
Members to vote on assessment to help balance its books
The Oakmont Golf Club (OGC) has been experiencing financial difficulties over the years, and an accumulation of operating losses has driven the club to seek a buyer.
The OGC is a separate corporation from the Oakmont Village Association (OVA), which represents all Oakmont residents. The OGC owns the two 18-hole golf courses, clubhouse, and restaurant and banquet facilities, about 250 acres of property altogether. All the facilities are open to the public.
OGC membership is at 270, about 60 of whom do not live in Oakmont. According to the OGC board of directors, membership has steadily declined in each of the past 11 years, though the actual number of rounds played per year over the last three years has been steady at around 60,000.
Monthly dues for the most popular singles or couples membership levels range from $270 to $456, depending on whether a membership allows limited or unlimited play.
Fiscal times have been tough for the OGC the last two years, with large losses in 2017 and 2018, whole quarters of a fiscal year lost to wildfires and associated smoke, and long periods of rain. An accounting issue didn’t help either.
OGA president Gary Smith said its management company made mistakes by not entering all the accounts payable, thus causing the board to make financial decisions based on erroneous data.
“That dug a hole,” said Smith, who said the club is making headway on paying its vendors.
To help with that effort, the OGC board is asking its members to approve by vote a one-time assessment of $750 for a single membership, and $1,500 for couples.
In order to pass, OGC bylaws require 70 percent approval. Voting ends March 8.
If approved, about $225,000 would be raised which, according to Smith, “would cover the 2018 operating deficit and return our accounts payable to its usual and customary levels.”
OGC revenue for 2018 was about $4.3 million.
“Obviously, we are in a much better position if the measure passes,” said Smith. “Overdue balances would be paid and, more importantly, the staff can really focus on service, marketing and the revenue generation plans developed for 2019. Without approval, those efforts are hamstrung by the amount of effort that goes into juggling vendor relationships. Critical cash needs will continue to be met but that is small consolation to other suppliers who deserve to be paid now.”
Whether the assessment is approved or not won’t affect the decision to sell the OGC, said Smith, pointing out any total debt the club has (over $3 million at the moment) would affect interest from potential buyers.
The OGC has retained Marcus & Millichap to handle the marketing and potential sale of the club, a nationwide commercial brokerage firm that has a specialty in selling leisure properties, including golf courses. The OGC board anticipates that the club will be listed in the $4.5 to $5 million range.
Sixty percent of all voting OGC members must approve any sale. The OGC board has maintained that any preferred buyer should be committed to retaining both golf courses.
Putting the OGC up for sale comes after over a year of discussion between the OGC and OVA board of directors over possible OVA financial assistance of some fashion, such as raising OVA members’ monthly dues to help. But major pushback from Oakmont residents scuttled any chance of that happening, at least for the moment. Many argued that OVA members shouldn’t have to pay for the golf club’s financial woes.
“The fact that OGC is for sale should in no way indicate that the two organizations are not communicating about the situation facing OGC and what might be done about it,” said OVA president Steve Spanier. “It’s simply a sign that OGC’s board understands it must take independent steps to help ensure its survival. The OVA board believes OGC’s financial situation should be concerning to all Oakmont residents. Losing control of OGC land to an outside entity interested only in profit could ultimately result in an unmaintained landscape, or homes where fairways and greens now exist. Whatever OGC’s future, Oakmont must remain a desirable place to live. OVA and OGC will continue to work together toward that end.”
Oakmont resident and OGC member Chuck Wood said he and his wife, Sallie, voted to approve the OGC assessment, is supportive of putting the OGC on the market, and optimistic a qualified buyer will emerge.
“I am hopeful that by the members demonstrating the significant financial commitment to the OGC, the OVA board will, in turn, appreciate that they too need to commit to the OGC’s ultimate survival in a meaningful manner, such as financially assisting with storm water channel maintenance. For all of us, the time to just wring our hands and worry is past.”