James A. (Bob) Husband meets club members following Monday night's session.
Nearly 500 people attended three days of Country Club meetings about a proposed deal to sell the club to a Southern California company that promises to build a pool and fitness center and invest substantially in general improvements.
The meetings, on Saturday, Sunday and Monday, were as close to identical as the club could make them. Presentations followed the same speaking points, and each meeting wrapped up with audience questions. (You can see the presentation here and answers to 65 member questions here.)
Club leaders called the meetings to explain the deal, which will go to members for a vote.
The prospective buyer is James A. (Bob) Husband, who has built four respected golf ownership companies. He has assembled a group that would advance the Country Club the needed funds to buy out its lease. The club’s landlord is the Murieta North developers, who purchased the club land – but not the operation or buildings – in 2013.
Husband was present for the meetings, though airline problems caused him to be more than an hour late for the first session. He was joined for the first two meetings by his partner, Gary Dee. Their company is called Bellagio Road.
Under the proposed deal, Bellagio Road would:
- Provide a minimum of $2.5 million for a pool/fitness center and for general improvements. (If the club purchase price comes in lower than planned, the savings would be added to the improvements fund.)
- Promise there would be no special assessments, no dues increase for one year, and no dues increase of more than 5 percent until completion of the improvements.
- No change in privileges, no out-of-pocket cost to members.
- Retain the club as private.
- End the current member assessment and pledge members will never see another assessment.
Vince Lepera, club president, told the audiences the club’s board is unanimous in its support for the deal. Some of his reasons:
- “This facility is not getting any younger,” he said. “For instance, you walk into like the ladies restroom upstairs. It looks like you’re walking back to the ‘Brady Bunch’ era. And there’s nothing we can do about it right now.” Other costly pending issues: the cart paths, the bunkers, getting into compliance with accessibility laws.
- The need for rainy-day funds. He pointed to the 19th Hole plumbing issue last year, which quickly grew from a $14,000 repair into a $120,000 budget-straining expense. “We believe we have to put in $6 million over a period of time to really bring this club back,” he said.
- A decade ago, the average age of club members was 54. Now it’s 62. Today, 43 percent of Rancho Murieta’s households are associated with the club. A decade ago, that number topped 60 percent.
Lepera said companies he checked to vet Husband consistently rated him “A-1.” He said the club has been approached a few times over the years about selling, but there was never a match that made the board feel as good as the one presented by Husband.
Husband has an impressive resume.
His most recent company was the widely recognized Heritage Golf Group, which he left last year. Prior to Heritage, he served as founder, president and CEO of Cobblestone Golf Group. Before forming Cobblestone in 1992, Husband served as co-founder, chairman and CEO of a company that ultimately became CCA/GolfCorp, the public golf operations subsidiary of Club Corporation of America. Under his direction, GolfCorp grew to more than 40 facilities in 1991, making it the second-largest public golf facility operator in the country.
Husband said he left Heritage because he was tired of spending three weeks a month on the East Coast, where Heritage has many properties. Coming to Rancho Murieta, and running one golf operation, would be “a very personal thing for me,” he said.
Husband said his operating philosophy is “We want to listen more than talk,” meaning the needs of the members have to be heard and understood before they can be addressed.
There should be no need to go beyond the gates of Rancho Murieta to find enough members to make the club a success, he said, adding that the addition of a pool and fitness center, with dues lower than golf dues, should draw younger families.
He pointed to “Moments of Truth,” a 1987 book by Jan Carlzon, former CEO of Scandinavian Airlines, to explain his belief that customers take dozens or hundreds of small measures of a business as they decide how they feel about it.
“By the time they get to the first tee ... they’ve made a hundred judgments,” Husband said. “And their perception of this facility ... is based upon all the collective things they touch and feel. So we want to make as many ‘moments of truth’ as we can here positive. And I think we know what they are. You certainly know what they are. It just takes a meticulous attitude.”
In Sunday’s session, he drew applause for three comments:
- He said the club would remain private. “It makes no sense as anything but a private club,” he said, “so I want to allay anyone’s fears that somehow it makes more sense to run as a public course. It does not.”
- Sometimes over the top is good, he said. “I’m a big believer that on things like the member-guest, you go way overboard to try and showcase the property ... so that when guests leave here they go, ‘Wow, that was unbelievable.’” Making money on these special tournaments is not the primary issue, he said.
- The courses need a grassing plan. Husband said he had played nine holes that morning. “We need to decide what grass we’re going to grow instead of the five or six that are out there,” he said, drawing laughs and applause.
The club operates under a 55-year lease that expires in 2028. The present North developers purchased the club land in 2013, when they bought out the Pension Trust Fund of Operating Engineers’ Rancho Murieta holdings.
The developers paid $12.7 million for all of the Rancho Murieta land, Lepera said, quoting contacts at Operating Engineers Local 3, whose pension fund sold the land to the developers.
Lepera complained that after buying the land, the developers did the club “a favor” – he used air quotes to emphasize the term – and went to the county to get the tax appraisal lowered on their new purchase. The club property had been appraised at $12 million, Lepera said, and when the county was done the new appraisal for the club was $8.5 million – out of a total purchase price of $12.7 million.
“That is still double what it should be,” he said. Instead of $88,000 a year, which the club pays under the new appraisal, it should be half that, Lepera said.
“So if you really think about it, on the purchase price ... who’s actually paying a majority of the property taxes for the developers? The Country Club or the developers?” Lepera asked.
He also denied the developers’ claim that they’ve met with the club about club needs and asked for a multi-year business plan. “I must have missed all those meetings,” Lepera said. “We were never asked that.”
“You also don’t need a P.T. Barnum,” he told the crowd. “You don’t need a resort to be built. You don’t need all the outside play here. You can make this club more and more successful staying inside the community.”