Vail Valley Voices: Owner puts Cordillera Club on road to ruin
August 24, 2010
Cordillera is a fantastic place to live and play. As homeowners, we have enjoyed our life in the mountains. As members of the Cordillera Club since 2005, we have taken full advantage of one of the most scenic and entertaining golf facilities in all of America.
But all of that is about to dramatically change because the new ownership of the Cordillera Club has little to no regard for the membership or the community.
I am an individual. I do not represent the membership of the club and do not have and never have had any “official” standing in the club. I am just a person who is affected by the decisions that have been made by the Wilhelm family, and I feel that a healthy discussion of the facts and perceptions needs to be shared.
The Vail Daily recently ran a puff piece put out by Wilhelm and his lawyer that did not represent a complete review of the situation. I do not know all the facts, but what I do know can aptly illustrate
why I think the club membership is outraged.
First, the membership tried to purchase the club for about $24 million. As a matter of full disclosure, I was not in favor of that acquisition, but there was enough support to generate the required funding to make the offer. That generous offer was rejected because of a lawsuit between Posen and Wilhelm, who were partners. According to Wilhelm, he received the club as a settlement of the lawsuit. He said he did not have to put any cash into the deal.
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This looked like a great opportunity to build onto his “golf empire vision” with clubs in various exotic locations. By the time the Cordillera deal was done, the value of country clubs had drastically plummeted. I think the membership would have been interested in buying the club but not at an inflated rate.
The point is the Wilhelm family “acquired” the club for its own business reasons. It looked like a good value for them and settled some old financial issues. They did not buy it to help out the membership. They were not needed or invited into the membership plan for the club.
The Wilhelms then made a series of financial decisions. According to them, at closing they found that $4.5 million of dues money was “missing.” Did they really practice “due diligence”? They decided to accept the terms and close the deal. Whose fault is it for that bad decision? All of this was just recently made known to the membership.
Another irritation factor is that they are now developing a five-year plan. If the family did their due diligence, they should have had that plan at the time of acquisition. Then they would have had a good decision process in place.
The Wilhelms sold a series of premier memberships at $30,000. They raised about $5 million – the general members have never been given the exact number. In fact, the membership has not received any concrete financial information, which is an underlying cause of the discontent.
Again according to the Wilhelms, this money was used to pay off the 2009 bills. Hmmm, they used good new funds to cover their own bad business decisions instead of holding them for a reserve against hard times. Is that the membership’s problem?
Second, they brought in some high-priced talent, including salting the club with family employees. We have asked for financials and for complete transparency to no avail. How much overhead was added?
The owners want financial help but are not prepared to disclose the financials. It sounds like they either have something to hide or just do not know. Either reason is equally disturbing.
Oh yes, they did say that they would let us know at the “appropriate time,” as if we were schoolchildren who would be told when recess would be coming. Some partnership attitude!
Third, a decision was made to open a retail sales facility in Vail under the Cordillera banner. The Cordillera staff operated that facility. Who paid for it? Was the money diverted from the club? Did it generate a profit or a loss? If it was a private enterprise, shouldn’t a license fee be paid to “borrow” the name and staff? Again, this is a question that was never answered.
Fourth, the membership was told that it was at fault for the current financial mess. We did not bring in members.
Interesting! The plan to get 500 members to recommend people was a pipe dream. To get 40 plus members in this economy was ludicrous. The person who thought of that plan must have spent a little too much time at the medicinal marijuana clinic.
The membership was exposed to several financial alternatives. Each required the members to put up more money or to see the club significantly change.
In reality, the Wilhelm family is looking to operate on other people’s money. As they said, and I paraphrase, they do not intent to invest their money in Cordillera.
Rather they want to buy other clubs and not protect the mother ship. And we should be happy about that attitude as our club and home values are put at risk?
Next, in my opinion, the members were treated with complete disrespect.
The public relations were a disaster. They made BP look smart. They could not have approached the membership in a more callous and inconsiderate way while hoping to engender sympathy and support.
Every action, including the surly manner and tone Wilhelm exhibited at the meetings, pushed the membership farther away.
Finally, the Wilhelms seem disingenuous. They have issued oblique threats and implied that they will right size the club, whatever they think that means. We all thought it was the right size when we spent our six figures to join. That is also why we spent around $1,000 a month in dues. I think the dues are among the highest in the valley.
They threaten to close courses, shut facilities, cut food, cut staff and God knows what. I suspect that if you want to lose member support you could not design a better strategy. I could be wrong. It could get worse if we ever see a final and complete plan.
In conclusion, there is a rift that is as wide as the Grand Canyon. The membership is pissed off. It feels like it has been pissed on and it is still “raining.”
If the Wilhelms want to earn the trust and respect of the Cordillera community, they will have to take extraordinary measures to repair the damage. This will require a lot of their money and an end to the idea of a Wall Street bailout from the membership.
According to Pearl S. Buck, “One faces the future with one’s past.”
Louis M. Schultz is a part-time resident of Cordillera.