If there are any inaccuracies in this post, let us know at ForTheMeadows@SarasotaMeadows.com and we’ll fix it.
Where would we like to be
MCA Homeowners want to minimize what they pay to keep their greenspace. Ideally this is keeping all the courses open and we should continue to work towards that outcome until all reasonable options have been exhausted.
It would also be preferable to not have to bear the financial burden of the debt we carry and the associated interest costs. We’ll leave this part to another blog.
Keep in mind that there will be large capital improvement bills coming in the future for the recreational assets. Florida golf courses have to be re-sodded periodically (one was done since we acquired the assets for $1.6 million), tennis courts have to be resurfaced, buildings need work.
How do we get there?
This is literally the million dollar (a year) question. And no one knows the answer for sure.
But we can tell you what ISN’T the answer. Continuing with the private club model that has perpetually lost an average of $1 million/year (before MCA subsidies). In the last 4 years, golf has been BOOMING. Tee sheets are packed at most courses but not here.
Based on recent membership data, TMCC has less than 150 year-round full golf members. This figure does not include seasonal members who pay for 1-4 months or family members who only pay 25% of a full golf member. Doing some math, we estimated the number of full year-round golf member equivalents and it works out to around 300 members. Only the most expensive and exclusive golf clubs can survive with these few members (the kind where there aren’t dues, there is just an assessment for your portion of the total cost at the end of the year).
Why can’t the private club model work here?
- In Meadoword articles from 2015 – 2017 TMCC’s General Manager repeatedly referenced the decline in private club memberships in the preceding 20 years. TMCC membership was in decline almost since it first became a private club in 1990.
- Maybe The Meadows golf course and facilities just aren’t good enough for a private club.
At this point that question doesn’t matter much. The fact is that it hasn’t worked here for a very, very long time. It is way past time for the MCA Board to face up to this fact and try a different approach.
TMCC has never fully faced this fact. They did make 2 courses public and continued to have huge losses, but have held tight to the private club model for the Meadows/Members course and dining facilities. TMCC would probably have had to go semi-private (have memberships + public access) in 2018 as part of a sale to any buyer, but the MCA continues to bail them out. Other local private clubs such as University Park and Rosedale made the transition to “semi-private” long ago. TMCC made a partial transition in opening Highlands and Groves. It is time for the MCA Board to finish the job.
MCA owns all the assets and holds all the cards
TMCC “owns” its membership list and some governance infrastructure (a board and committees). It has a small amount of fixed assets. But it doesn’t own any golf courses, tennis facilities or dining facilities.
MCA owns all the recreational assets.
The hard truth is that:
- MCA’s golf courses, tennis facilities and buildings can, and do, exist without TMCC.
- TMCC would not exist without the MCA leasing its recreational assets to TMCC.
Are the golf courses better off with having some members? Probably. But it doesn’t have to be a private club to have members. Current TMCC members could continue to be members and have most of the benefits of membership except one: exclusive use of the golf course and other facilities.
The MCA should be utilizing the recreational assets to the optimum benefit of MCA Homeowners. That doesn’t mean giving them free use (it of course wouldn’t be “free” at assessment time). But it does mean minimizing the cost to MCA Homeowners. So far, all MCA Board actions have maximized the benefits of TMCC members. There may be opportunities to improve profitability for the tennis, fitness and dining facilities as well if they weren’t private.
What are the barriers to getting there?
There will always be unknowns in change and the MCA Board would be wise to seek professional advice. The good news is that it is actually a great time to be in the golf course business with the golfing boom that started in 2020 because of covid.
There are probably things that have to be addressed in terms of MCA’s corporate “form”. Let’s figure it out and address them.
There are significant barriers to TMCC making changes in how they run their operation. TMCC’s goal is to benefit its members, period. Their year-round members who are the voting decision-makers. They are primarily long-term members and change is difficult. On top of that, TMCC by-laws have some barriers including locking in that single memberships are priced at 80% of family memberships (forcing single memberships to be unnecessarily high or family memberships to be unnecessarily low). The by-laws can only be changed by 2/3 of the year-round members. TMCC is also limited in how much public revenue they can have as a tax-exempt entity (IRS rules).
On the plus side, TMCC has already outsourced the management of the facilities to ICON. And I’ll bet that ICON would be at least as happy to work for the MCA as they are for TMCC (MCA would not require the current money-losing private club model). We know that not everyone is a fan of ICON but keeping them would make for an easy transition and who knows what they could do without the current handcuffs.
Also on the plus side, the MCA Board anticipated the possibility of moving to semi-private when they created paragraph 29 of The Meadows’ Maintenance Covenants and Restrictions in Dec 2017:
- they specifically provided for the possibility of operating the recreational facilities as a public facility.
- they also updated it in October 2021 to protect the golf courses and Butterfly Lake area which may not be sold or developed without ¾ of MCA membership approval (will never happen).
So what should the MCA Board be doing NOW?
- Accept and embrace their responsibility to maximize the use of the recreational assets for MCA Homeowners, which means minimizing the cost. This is a commitment to keeping the golf courses and making them as successful as they can be for MCA Homeowners.
- Start figuring out a transition to a semi-private model (memberships + public access). It would be great to work with TMCC members to retain their memberships and we should work towards that. BUT we can’t cater to them to emulate their experience over the last 2 decades. Those days are gone. TMCC likely can’t be the operator as a tax-exempt organization. Instead it could mean leasing the facilities at a profitable amount to another company (rather than paying TMCC $600,000 to use them).
- The recreational asset lease is up for renewal on June 30, 2024. DO NOT RENEW THE LEASE FOR 3 YEARS. Probably need to renew it for ONE year at this point while things are figured out, but no longer. If the lease is not renewed, it would be on a month-to-month basis, with the consent of the MCA (per section 22 of the lease).
- Carefully monitor course conditions. TMCC has not done a great job of maintaining the public courses in the past and will be even less inclined to do so under a 1-year lease.
- Seek out MCA Homeowners who have experience working for or with golf clubs at the management, Board and Committee levels. Get them on MCA committees and the Board as soon as possible.
We do need to acknowledge that this would be a HUGE change in the MCA Board and Management’s accountability. Up to mid-2018 they oversaw a budget of $1.8 million to maintain the common roads and greenspace, and had a history of experience in that area. The sporting and dining facilities generate $7 million of revenues (and $7 million of expenses) and is a complex business.
Discuss
Contact us at ForTheMeadows@SarasotaMeadows.com
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