The legal wrangling over the direction of the Killearn Country Club has taken another turn. Barton Tuck, the current owner, sent a letter to members today that says he has “elected to trigger the right to purchase given to the Club Members in the restrictive covenants encumbering the golf course.”
The letter can be viewed here.
Does this mean Mr. Tuck has given up on owning the club?
No. Mr. Tuck says that he does not want to sell the club, but he “must tender the purchase right to you to ultimately cease litigation and to implement the revitalization plan.”
A minority group of members have stated that they want to buy the club, rather than approve Mr. Tuck’s redevelopment plan that includes closing the nine holes of the golf course known as the “North” or “Narrows.”
Sources tell TR that debate will now center around who has the right to buy the course and the process that will facilitate such a transaction.
I inquired about joining just yesterday. I tried calling for 3 months and not one of my messages were returned. I had to actually walk into the building to get someone to talk to me. When I asked about the true future of the club I was told the following. We HOPE to sell the north couse so that we can CHANGE the club house.. really. Going with hope and change.. heard that before.. how did that would out for the people involved??
Overall, I have worked or been a member at some of the best clubs in the nation. This course has tons of potential. The only problem is the skimming of revenues to pay off investors. I asked which building has been most recently built? Response we have been in the remodel and paint business not in the building business. The course needs a new vision. It needs the members to become owners. Even if only 25 or 50 members want to become owners that is fine. Pool the money. Make equity shares. And then they run the club and the boards. The other non equity members pay a few dollars more and are non voting. It works and works well. The golf professionals seem to be caught in the middle but seem to be good guys that want the best. But the management team needs to be let go of.
Members should buy the club and take an ownership view of its future. It can and will work. New club house and golf shop attached. New pool and new tennis courts that draw in wives and children. When the wife is happy the husbands can play golf and join the family afterwards around the pool. Tuck wants the homeowners to fund his capital campaign buy closing and selling off a course. His poor management for almost 30 years has been his issue. I HOPE THE HOME OWNERS ON THE NORTH COURSE DO NOT HAND HIM A BAIL OUT AT THEIR PROPERTY VALUE EXPENSE. Sounds like another goal of that hope and change.. bailouts.
Wouldn’t it be possible to bring in a professional golf management organization who wouldn’t siphon off all the money like Tuck seems to have done for so many years? The loyalty of the members is exemplary, and they deserve a top-notch course with facilities. A professional management organization, which is accountable to the member owners who hired them, would certainly be a HUGE improvement over the current situation. I also believe the Covenants require an IMPARTIAL 3-person panel of members to handle the proposed sale. A roster of 3 individuals, HIGHLY sympathetic to Mr. Tuck’s agenda was posted, asking for signatures to approve them as the panel. Mr. Tuck continues to skew the facts and try to control the members to benefit his wants and desires with disregard for ALL the members as well as the other residents of Killearn.
The members are entitled to purchase the golf course at fair market value. Tuck’s offer is based on his appraisal, obtained from an appraiser he selected, and is not the final number.
If you look at the comps used in Tuck’s appraisal (it is hyperlinked in the letter), it is obvious the number is laughably overstated.
The golf course, as sold, does not include the pool or any food and beverage facilities. A club with amenities and a golf course is not an apples to apples comparison.
On average, golf clubs have been selling between 1-1.5x annual gross revenue. Even Tuck’s appraiser acknowledges this in his appraisal, although he includes a club that sold at a 3.15 multiplier to inflate the multiplier. The food and beverage revenue from the 19th hole is roughly 400k a year. That brings the fair market value down to 800k. Considering that golf club sales at 1x gross revenue include amenities which are being excluded, considering that the purchase of the golf cart shed doesn’t include the golf carts (which are leased) and considering the 20 year deed restriction which would prevent any other use other than a golf course, the actual fair market value of the golf course is probably significantly lower than 800k.
Tuck’s appraisal assumes significant growth in revenue for the course (if purchased by the members without any amenities) despite the fact that under his management, the club’s net revenue is down around 300k from 2012-2013 levels.
Right now, it seems like the thing to do is to find out what the actually purchase price of the golf course is. That price isn’t set by Mr. Tuck (or his appraiser). The members have the right to get their own appraiser, who, together with Mr. Tuck’s appraiser, will select a third appraiser and who will collectively determine the fair market value.
Then and only then can the members decide what is in the best interests of their club, or at least use that process to get some BINDING commitments as to the planned redevelopment, to ensure that what is being promised actually materializes.
According to the financials set forth in the appraisal, Barton Tuck went from break-even operations to losing $200,000 in the last year. Most of his other clubs have shuttered or been sold… why the blind allegiance to his plan (not binding or on paper) to save the club when he hasn’t invested any in capital improvements since he purchased it 28 years ago (not a single new building).
If closing the narrows allows for the improvement of the facilities and remaining 18, then it should be viewed that way with heavy consideration. Of the ‘members’ who are interested in buying it, I’m hoping they consider the grand scope of things. Members have bought and taken over courses before and to great success (and failures) as with any acquisition.
As a long time patron, me and my buddy Richard love the place and will be here until the bitter end… which there hopefully won’t be.
Yes the golf coarse is very important. But the truth is that the club will not survive if it does not update its total facilities ( lodging, dinning and pool side) Customer service improvements are a must before you waste money on anything else. Just a suggestion from a long time patron.
Barton has great vision for the revitalization of Killearn Country Club. Several of the members who want to purchase the club must have forgotten about equipment costs, operation costs and not to mention knowing about the golf industry. We are talking millions of dollars for a few members to purchase and “figure out” how to run Killearn into the ground. Tallahassee doesn’t need another Summerbrooke. Tallahassee should let Barton do what he does, that is manage golf clubs. Although the club has been neglected in updates, Barton has a good vision and it’s better than the current situation of the club. The members might find the money, but they can’t run the club to its current marks and or have the money to do any sort of revitalization as Barton is proposing.
The Killearn golf course, with some fairway and facilities overhaul, could very well be a challenging 18 holes again and is worth saving. I sincerely hope the member group can buy the club and put an end to this matter.