Jamestown investors purchase Valley Country Club in Warwick
In today’s new economy, the old model of the nonprofit country club appears to be at risk.
After the nonprofit club filed for Chapter 11 bankruptcy in March 2010, a group of members and business partners put their heads together in order to save the club and take it in a new direction.
According to Markarian, the result was an innovative memberowned for-profit business model that puts business professionals in critical decision-making positions and ultimately results in a private club that is far more affordable than its exclusive counter parts.
Joining the three Jamestowners in giving life to the for-profit concept was Bob Mantier of Narragansett.
Convinced early in the process that the idea was sound, the four investors added a fifth, David Crocker. In the end the five investors supplied $2 million for the purchase of the club and the payment of back taxes. In order to satisfy the note with Centerville Bank, 50 additional investors, all members of the club, were encouraged to purchase “incremental shares,” Markarian said.
Markarian, who said that the strength of his golf game hinges on “accuracy,” started playing golf 27 years ago. He added that Siwicki began as a 12-year-old, but that “you wouldn’t know it” by his play. Siwicki said with a laugh that his strong suit on the course is “finding balls in the woods,” a point confirmed by Markarian.
Both partners described the club as a long-term investment with the goal of both growing the membership and to make the club a “go-to destination for golf in the state.”
Markarian explained that prior to the purchase, the club was carrying a $5 million debt, which in turn generated a $35,000-a-month mortgage payment. He explained that the state of the club was not atypical and that the debt was incurred over a 10-year period and funded two major projects: renovating the clubhouse, which cost $3 million, and renovating the golf course, which cost $2 million.
Declining membership made it impossible for dues to pay the bills and the entity sought protection in bankruptcy court. Centerville Bank, which held the note, was preparing to foreclose on the property when the plan was hatched and the investors began to take steps to save the club.
Negotiations with Centerville Bank, based on independent appraisals, reduced the bank debt to $3.3 million. That savings, coupled with a new mortgage from Washington Trust and the money from the 50 additional investor-owners, resulted in a far more manageable debt service, Markarian said.
Where the previous monthly nut was $35,000, the new-look club pays only $7,500 a month in mortgage payments.
Motivated by more than the deal itself, Markarian loves the game and plays three times a week in the summer, while his partner and colleagues are more often weekly golfers.
“Now that we have this home base I am going to be golfing more,” Siwicki said. “Try to straighten my slice out.”
“As members of the club,” Markarian said, “we all enjoy playing golf. We play here in Rhode Island and in Florida as a group.” He added that the group’s camaraderie centers around golf and in the case of the first four investors, a business relationship which until recently included Dominion Diagnostics, a medical laboratory in North Kingstown that employs 220 people. The lab project began in 1997 and majority ownership was sold at the end of last year to a private equity firm.
Siwicki explained that Markarian spent countless hours in the four months between conception and purchase in seeing to the details of the purchase of Valley.
Markarian said that there are currently 196 members. Membership opportunities include individuals, families and what is called the Young Executives Program.
The program makes membership more affordable for those under 35 years old and it builds the membership base generationally. The club is also preparing to launch a grandparents and young children’s program to foster the inclusion of the grandchildren of members in the golf experience.
Lessons are offered to nonmembers as well as members. Currently no schools make Valley its home course.
Dues cost nearly 25 percent less than clubs managed by a member-only board of directors in the area, Markarian said. The $4,500 membership fee is $1,700 less than the $6,200 comparable fees of other courses.
Valley does not charge an initiation fee. Applications are made to the club for membership but new members are not required to gain sponsorship of current members.
A more reasonable pricing structure is the goal of the club, as a way to promote both the club and the game of golf in general.
Rhode Island Golf Association will host several tournaments at Valley throughout the spring and summer. Valley will host a major tournament — the Senior Four- Ball — on June 14 and 15.
Seventy people are employed at the club and the facilities are open for rental.
The overriding goal, however, is to provide a club with reasonable rates, where a prompt round of golf is the rule and where the members don’t face regular assessments for maintenance projects. Markarian said that assessments are the demise of private clubs, because they chip away at their members to maintain their membership.
He explained that a for-profit business model puts good business practices at the center of the institution, which in turn promotes sound spending policies and helps to mitigate costs.
Promoting golf from one generation to another, the investors of Valley are in it for the long haul, Markarian said, and Siwicki added that his club seeks to create a “desirable club at the affordable end of the scale.”
Around the Horn
• Senior Mike Marshall (North Kingstown High School) of Connecticut College helped the Camels finish sixth out of 18 teams at the Thompson Trophy Regatta on April 23. Marshall, along with classmate Irasz Korezlioglu, posted a fourthplace finish in the B division, scoring 87 points in the regatta.
• Senior Katrina Salk (Providence Country Day School) of Connecticut College was named to the All-New England second team crew.
• For the Hobart and William Smith Colleges sailing team, senior Holly Huffine (Prout School), along with senior Kelly Crane, earned a victory in the B division. Huffine and her teammate finished in the top two in their first nine races, posting six wins. They placed in the top five in all but one race.
• United States Coast Guard Academy junior Peter Imbriale (North Kingstown High School) was named to the New England Women’s and Men’s Athletic Conference
Men’s Track and Field All-Academic team. Imbriale participates in the pole vault and is studying operations research and computer analysis.
• Freshman Megan Greene (North Kingstown High School) was named to the 2010 Gladiator by SGI/NFHCA Division III National Academic Squad. Greene plays forward for the Manhattanville College women’s field hockey team.
• Sophomore midfielder Maeghan Farrelly (North Kingstown High School) was named Most Improved Player for the Daniel Webster College women’s field hockey team during the school’s annual athletics night ceremony on May 5.
• Fifth-year senior Allie Dolce (North Kingstown High School) was honored for her accomplishments and dedication to the Boston University field hockey program during its annual banquet last month.
• Ali’s Run of the Newport Babe Ruth League began the season by winning three of its first four games. On April 28, Graham Jamison took a no-hitter into the fourth inning and Jared Ford came in in relief to solidify its 12-2 win over Horan Construction. Offensive stars included Alex Burke, Drew MacIntyre and Logan Bradley. On May 3, Ali’s easily defeated O’Brien’s Pub, 17-3, behind the pitching efforts of Bradley. Eric Stroud, Burke, Matt Rafanelli, Dan Irwin and Rob Haberland contributed on offense. On May 8, Ali’s defeated Horan’s again, 4-3, behind the pitching performances of Jamison and Burke.