The deal to save LuLu Country Club is done.
The 100-year-old club, which had been facing
the prospect of financial collapse, on Thursday agreed to a long-term lease
deal with RAM Golf
Management, a Florida company that also been managing Yardley Country Club since March.
LuLu and Yardley will become, in effect, sister clubs, with members holding
joint memberships in both clubs.
"It is a big step forward for the club," LuLu president Paul Muller said Friday afternoon.
the oldest Donald Ross-designed course (1912) in Philadelphia, the deal did not
come a moment too soon. Down to 72
equity members, and saddled with $2.2 million in debt and a clubhouse badly in
need of renovation, Muller conceded in
January that the club, closed for winter, might not reopen in the spring, if no
buyer came to the rescue.
Instead of a buyer, LuLu found a financial lifeline in RAM, which Muller
described as a "boutique" firm owned and run by a small partnership of golf
Background stories here, here and here. Earlier interview with Muller here.
Following is a Q & A I had with Muller late Friday afternoon:
MyPhillyGolf: It sounds like congratulations are in order. The deal is finally done, signed and in
Paul Muller: Yeah, it is big step forward for the
club. It gives a lot of certainty
to our future. We are looking
forward to it.
MyPhillyGolf: What can
you tell me about the terms of the deal?
Muller: The terms call for basically a long-term
lease in excess of 20 years. There
are three components to it, each seven years in length. Each one has an option on both parties
on whether to continue forward.
essence of the business deal is that we will be leasing the club to RAM for a fee that will cover our
debt. They will, in turn, do what they do to make the
club successful; obviously recruiting members, outings, family events of all
kinds are Job One and will be commenced immediately.
probably safe to say it is similar to the lease they have in place at Yardley and that’s a big component of
this thing, because the multi-club solution deserves a real good test. So far, there are other situations like
it in the area but I don’t think any that have the geographics and demographics
that support a LuLu-Yardley
MyPhillyGolf: In a
long-term lease like this, they are not actually buying the club, but they
effectively have control of it, correct?
Muller: Well, the board remains in control. It is by definition a partnership.
happens if two or three or five years down the road a dispute arises between
what RAM would like to do and what the existing members, who are still the
owners, and the board, wants to do?
Muller: I guess it’s different based
on who raised the dispute.
Certainly if RAM did that
would have to be dealt with at the board level. If an individual member did, it would be
channeled through the board. For
right now, I think we are best focused on the elements of the deal that matter
and on working in tandem to make them successful.
MyPhillyGolf: Th future of the golf course is ensured at least for
the first seven years. Correct?
Muller: Yes, absolutely.
MyPhillyGolf: At the end of seven
years, if one side wants out, is that enough to trip the agreement?
Muller: Yeah, there is an evaluation
period that is built into those renewals; that’s why they are there. Either party could decide to terminate
with the right kind of notice.
MyPhillyGolf: It will remain a private club, right?
MyPhillyGolf: Will any outside play be allowed? Will it be semi-private?
Muller: Non-members will be allowed to play the
course only in connection with our membership goals. We will invite members of the public to
come and kick the tires, play the course, etc., to be a member of a day, so to
MyPhillyGolf: So it’s up to RAM to bring in new members?
Muller: It’s their marketing machine
that we are looking forward to most.
They’ve got 15 new members at Yardley
so far this year, which is not bad.
We are looking for similar results at LuLu.
combining the two courses, you open up the geography to a lot more people. If
you look at the corridor between North Hills and Yardley, that becomes new territory
to focus on. Full members have full
access to both clubs. We are very
much joined at the hip.
MyPhillyGolf: What is the timetable for reopening the course, and
will LuLu participate GAP events?
Muller: Yes, we will certainly participate in
GAP. We will probably open the
clubhouse on a limited February schedule beginning next week. As to when the pro shop will be open and
carts running, more than likely March 1, weather permitting.
MyPhillyGolf: You said to me in an earlier email that this
agreement could serve as something of a
model for other private clubs struggling like you are. How so?
Muller: What RAM or any company like them brings to the table is
investment. At a time when clubs
are struggling financially, money is a solution for an awful lot of things.
Through their significant investment and long-term lease of the property, it
takes a lot of pressure off the commercial side of our business and it gets
professionals involved promoting the club and growing the club.
MyPhillyGolf: Speaking of RAM, their website doesn’t reveal much
about the company. What can you
tell me about RAM?
Muller: They are a boutique company
– self-described that way.
They are not comparable to a lot of larger firms with larger profiles,
but the partners we have met are Danny Mays, who based
in Jupiter, Fla., and is well known in the South Florida golf business. He
actually ran Doral
for a number of years and holds the record on the Silver Course.
And Allen DePuy been
in the golf business his entire life.
He is based in Pennsylvania and is right now acting GM at Yardley.
Yardley, are there other courses around here they own or manage?
Muller: No, none locally, but they are in
discussions with a few.
MyPhillyGolf: What is the
scope and timetable for improvements to the LuLu clubhouse?
Muller: I would say you will see
evidence of a facelift probably within 30 to 60 days; there is a two- to
three-year strategy for the total work to be done.
MyPhillyGolf: These people saw potential where others did not. What do you think made them think they
could make a go of this?
Muller: I can tell you that their association
with Yardley was key. To have two clubs in the area and to
give life to the multi-club goal is huge.
Obviously, they have the financial wherewithal and the business plan to
make it work. They were in
love with our golf course, in love with our clubhouse and in love with our
MyPhillyGolf: How are the members feeling about this?
Muller: We just had the most positive meeting in
recent history. It was very well-attended. From the comments we received and
continue to receive, there is a sense of relief and enthusiasm that there will
be a future backed by some smart and solid people.