Later today, the Board of Directors of the Gateway Golf & Country Club are expected to announce that they’ve received an offer to purchase the club that they feel should be accepted.
As we detailed a few days ago, the offer will be from a group headed by the club’s former GM from 2010 to 2013, Jimmy Lynn.
If that offer is accepted, Lynn’s group will assume control of the club, pay off or restructure all of the club’s debts and make a 7-figure cash payment that would be split among the club’s equity members. One source told us that each golf member would receive a check from between $5,000 to $8,000.
At that point, we’re told, Lynn would transform the GGCC from a private to a semi-private or public golf course.
But Lynn’s offer wasn’t the only one that was received.
The Gateway Sun has obtained the details behind a rival bid from Concert Golf Partners, who operate 17 other golf clubs across the United States.
Concert operates five clubs in Florida, including: Carrollwood Country Club in Tampa, Indian Spring Country Club in Boynton Beach, Golf Club of Amelia Island on Amelia Island, as well as Legacy Club and Heathrow Country Club in Orlando. (EDITOR’S NOTE: A previous version of this story omitted the Amelia Island club. On the company’s map, the dot representing that club looks as if it’s in Georgia.)
Acquiring the Gateway Golf & Country Club would give Concert a presence in Fort Myers which they presently do not have.
Like Lynn’s group, Concert would assume all existing debt in the club, and take over most of the club’s contracts, leases and other financial obligations. Concert listed those expenses at $3.35 million, which is relatively close to the $3.5 million we reported from Lynn’s group.
The two key differences between the offers are that 1) with Concert, there will be no money paid out to the members; and that’s because 2) Concert would keep the GGCC operating as a private golf club.
Instead of Concert paying the existing equity members a total of $1-3 million in cash, Concert’s offer includes $2.5 million in capital improvements to the golf course and other amenities within 5 years of the purchase – with $1.5 million of it coming in the first two years.
In addition to addressing all of the GGCC’s deferred maintenance issues, Concert would renovate the golf course’s bunkers, along with the pool area, bring in new furniture, improve the landscaping and lighting, as well as upgrade the outdoor furnishings.
According to the information obtained by the Sun, Concert agrees to maintain a capital reserve of at least 3% of revenues to fund future improvements, as well as to prohibit (and eliminate) member assessments (which would immediately save current members approximately 10% of their membership costs). Membership dues themselves would be frozen at today’s rates for at least this year.
Additionally, all members of a Concert-owned Gateway Golf & Country Club would also enjoy free playing privileges at any of Concert’s other clubs across the country. Basically a membership to one of their clubs is a membership to all of them.
So the question comes down to this for the members: Do you want to be a member of a golf and country club or not?
Do you want to quit the Gateway Golf & Country Club, leave all your membership obligations behind, and receive a nice little check for doing so?
Or do you want to stay as part of GGCC, and in the process become part of a nationwide golf club?
Either way, this is a one-time decision.
The members will lose all control over the club whether it’s sold to Lynn’s group or to Concert Golf Partners. Regardless of which buyer the members choose, the Gateway Golf & Country Club that was a member-owned and operated club will be no more.
There is a full club meeting today which we believe will be broadcast somehow so that out-of-town members can listen. During the meeting, Lynn’s offer will be presented and recommended for acceptance by the Board of Directors. It may take weeks (or even a month) before the board knows whether the members want to sell to Lynn.
If they accept Lynn’s offer, the process is over. While if they reject Lynn’s offer, it’s almost certain that the members would vote on Concert’s offer.
We’ll see what happens.
Now that this offer from Concert Golf Partners has been revealed, it tells us a couple of things.
1) A majority of the Board of Directors don’t want to be part of their private country club any more for some reason. I’m not going to sit here and judge any other person’s motivations for wanting out, but the fact is that the Concert offer allows the directors to remain part of a private country club if they want to be.
2) The Board of Directors trusts Jimmy Lynn far more than some of the members do. And for all the negative things we’ve heard about Lynn these past few days, our research has indicated that when given the opportunity at other clubs, Lynn has performed. Our research also very strongly suggests that Lynn’s time as GM of GGCC was hampered by interference from the board. Would Lynn be able to do a far better job without being handcuffed by a Board of Directors? Yes, he would. The question is: would he be able to do a good enough job to save the club?
3) The board members know they’ll be stripped of all their power and control over the club, and so they’re definitely choosing “the devil they know” over the one they don’t. They’ve no doubt had more contact with Lynn than Concert, because they know Lynn personally. The members should listen very closely to what the board has to say today.
4) Based on media reports of Concert’s acquisitions of other clubs, Concert has deep pockets and a very long-term outlook for their business. The money behind Lynn’s group wasn’t as easy to find information about, but based on what a trusted source has told us, the money is definitely there to do a good job at GGCC. And similarly, this is a long-term proposition for Lynn. I would have to believe (and hope) the board has done their due diligence on the financials of Lynn’s group or they would never be making the recommendation they are. That said, it’s easy to see Concert has the resources, but not overtly evident that Lynn’s group has them.
What the members decide to do about Lynn’s offer is up to them, obviously.
But one last time, this isn’t about which group will do the better job… because they’ll both be an improvement over the current board and management.
This is about whether the members want to remain part of a private country club or not.
If they want out, they should take Lynn’s offer. If they want to stay, they should decline Lynn’s offer and take the offer from Concert Golf Partners.
EDITOR’S NOTE: We did not receive the bid information from Concert themselves. But obviously somebody wanted us to have it for the specific purpose of sharing it with the club’s members.