This article appeared on AZCentral today. There may be some lessons to be drawn with regard to our two lawsuits against taxpayer-funded bond subsidies to McDowell Mountain Golf Club and the TPC Scottsdale.
GoDaddy founder Bob Parsons shakes up Scottsdale golf club
By Peter Corbett, The Republic | azcentral.com
GoDaddy founder Bob Parsons is shaking up the buttoned-down golf world with a go-for-it plan to remake his exclusive Scottsdale country club and limit member play to 30 times per year.
Parsons, who bought Golf Club Scottsdale in September for $600,000, sent a sharply worded letter last month to members outlining additional fees and a $35 million redevelopment plan to realign the finishing holes, build a new clubhouse and add a 9-hole executive course.
The billionaire entrepreneur, who made it clear some members were not spending enough at the club, also offered to buy out those golfers who do not want to stick around.
“I understand that many of our members will not like the above policy (particularly those who play the course the most and spent the least),” Parsons wrote.
He explained that departing members could get a full refund of $25,000 or $110,000, whichever initial membership fee they paid upon joining what is now being called Scottsdale National Golf Club.
“It is within my rights to simply let members resign and receive a refund for 50 percent of the amount they paid to join the club,” Parsons wrote. “But that’s not my style.”
Parsons, 63, is a brash figure who became fabulously wealthy developing GoDaddy into a $1 billion company over the past 15 years. This past September, Forbes magazine listed Parsons’ net worth at $1.9 billion, No. 296 on the Forbes 400 list.
GoDaddy, a website-services company, and Parsons gained notoriety with a series of racy Super Bowl ads starting in 2005.
He sold a majority interest in GoDaddy in 2011 and has since turned his attention to motorcycle dealerships, real estate and philanthropy, giving away $34 million in less than two years.
He stepped into the Valley’s golf scene five months ago when he bought Golf Club Scottsdale, northeast of Pinnacle Peak on Dynamite Boulevard and 122nd Street. The sale price of $600,000 does not include tens of millions of dollars members paid as part of their equity memberships, a liability assumed by Parsons.
The 15-year-old course, like many other clubs around the country, struggled financially, particularly after the recession when six-figure country club memberships were hard to sell and members bailed out.
Parsons got the attention of the golf industry with his letter, which lays out an aggressive strategy for Scottsdale National Golf Club and without apology sets up a new business model as a higher echelon club.
Al Andersen, co-owner of Golf Realty Network, praised Parsons for trying a new business approach and said it’s his right to create the kind of country club he wants and associate with like-minded golfers.
“It’s like Bob Parsons is Rodney Dangerfield and he doesn’t want to play golf with Ted Knight,” said Andersen, a reference to “Caddyshack,” a 1980 golf comedy set at the fictional Bushwood Country Club.
In the film, actor Knight plays Judge Smails, a by-the-book club member incensed by Dangerfield’s ribald character, Al Czervik.
Parsons’ new rules for Scottsdale National Golf Club, starting in December, will limit member play to 30 rounds annually. Members could play additional rounds if they brought a paying guest with them.
Golf clubs generally offer unlimited play, based on availability, with some members playing more than once a week. The course will be closed in the summer.
Instead of cart and other fees, members will pay a $100 service fee each time they play. The greens fee for guests will increase to $200.
Initially, members paid $110,000 to join the club plus an $850 in monthly dues. In 2011, the membership fee was cut to $25,000.
In a sit-down interview Friday, Parsons said Golf Club Scottsdale was “within a whisker of going broke and being auctioned off.”
“If that had happened, the new owner might not have been Santa Claus,” he said.
There were just not enough members and some existing members were playing a lot of rounds of golf but were not supporting the organization, Parsons said from his Scottsdale Airpark office, surrounded by his motorcycle dealerships.
“No one was asked to leave,” he said, noting that the members had the option of staying on with the new rules.
If members are ruffled they are not saying so publicly.
One former member, Mark Isakson, who is in litigation with the previous owner, CGP-Granite Golf LLC, said there are mixed feelings among the nearly 20 members he has talked to about the changes.
Some are miffed they will not be able to continue playing regular rounds of golf and will quit, and about a quarter of them will remain as members, Isakson said.
“Some guys will be ecstatic to get their $110,000 back,” he said. “They thought they would never get it back.”
Isakson, who was one of the developers and founding members of Golf Club Scottsdale, said Parsons is simply telling some of the members that they don’t make enough to stay in his highly exclusive club.
“This was a nicer way to do it,” Isakson said. “It’s less in your face.”
Parsons said Friday that he wants to redesign holes 15 to 18 and build a nine-hole par-3 course in a mountainous area of the course. A new, larger clubhouse with “breathtaking views” and underground parking are in the plans, along with a guard house and entry feature.
“I’d like it to be one of the premier golf courses in the world,” he said.
So far Parson has added new carts and Toro maintenance tractors, brought in a new chef and increased staff pay.
Parsons said he is searching for a course designer and a clubhouse architect. Improvements are likely to begin in the late spring of 2015.
Members had until Friday to decide whether to resign or continue as members.
About 109 members chose to stay and 65 will leave the club, Parsons said.