Clubs struggling nationwide, Cordillera attorney says
August 16, 2010
EDWARDS, Colorado – Like every business, private clubs all over the country are struggling, says the attorney who put together the original Cordillera club deal.
Dennis Hillier was in town last to help the Club at Cordillera’s owners come up with a five-year business plan, then try to convince contentious members to sign on.
Club owner David Wilhelm of the Wilhelm Family Partnership told members that they’re $6 million short of being able to make the bills through the end of the year. The announcement caught more members off guard and a series of contentious meetings with members followed last week.
“They don’t like this guy, but they don’t like anyone they’ve had,” Hillier said. “In any club there are always 10-15 percent always unhappy, 10-15 percent happy, the rest just want to be treated fairly. They don’t say much.”
Hillier said the club business is struggling across the country. Some clubs are finding ways to make themselves financially sustainable; others are not, he said.
“What’s happening in the Vail Valley is not unique,” he said. “It’s happening everywhere.”
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Golf numbers have been falling nationwide since 2001, along with the demand for second homes,
“Everyone is seeing reduced demand,” Hillier said.
For now, 650 of the 1,100 Cordillera property owners are members of the Club at Cordillera. Membership is something many have decided they can live without.
“Clubs have large sell lists of people wanting to get out because of the economy,” Hillier said.
Cordillera is no different. Members say more than 300 of them are lined up to leave the club.
“Prices are being adjusted,” Hillier said. “Clubs are trying reduced prices and aggressive marketing to get enough dues payers. The key is to have enough dues payers to pay the bills.”
Cordillera’s 650 members and their $7 million in total annual dues won’t pay the freight, Hillier said.
Cordillera needs 950-1,000 members to cash flow the golf courses, club houses, restaurants and fitness and children’s facilities, he said.
The good news
The Vail and Aspen real estate markets are recovering faster than other markets around the state, and that could help, Hillier said.
The club industry won’t improve until the second-home market improves. However, demand will eventually catch up with the restricted supply, Hillier said.
“The good news is that in the next 10 years there will be no more of these communities built because banks will not advance the money,” Hillier said. “But you have to keep the quality of your facilities at a high level for it to be attractive when the market returns.”
In his letter to Club at Cordillera homeowners, Wilhelm asked Cordillera members to loan him $35,000 each to help get through the end of the year.
They’ve been asked for money before. Two years ago, Club at Cordillera members were trying to buy the club from former owner Felix Posen and asked for $30,000 each from members to help fund their proposed $24 million purchase, according to documents obtained by the Daily.
Wilhelm acquired it before they could finish a deal with Posen.
The Wilhelm family is paying Hillier’s firm, Greenberg and Traurig in Boca Raton, Fla., to help restructure Cordillera’s club operation, Hillier said.
Hillier said he has spent much of his career helping create private clubs. These days he’s spending much of his time helping them handle the ravages the recession has handed them, he said.
Staff Writer Randy Wyrick can be reached at 970-748-2935 or firstname.lastname@example.org.