FAQ
People moving to Florida at the time of retirement, in anticipation of retirement, or for any number of reasons, are interested in selecting a country club life-style that will satisfy their particular needs. Clearly, this is an important decision, not only because of financial factors but also because of the potential to develop new relationships, participate in recreational activities and enjoy all the club services. For many, the Club becomes the focus of their social life for years to come.
There is a great deal of variety in the quality, size and scope of country clubs in the Naples area. Selecting a club is a complex matter that deserves a great deal of careful consideration about club control, present and future costs, and with legal considerations. With that in mind, we have tried to answer below some of the most frequently asked questions. If you still have questions, do not hesitate to call the club at (239) 597-2831.
GENERAL FACTORS
Q. What type of club is Quail Creek Country Club?
A. Full-service country club with outstanding golf, tennis, fitness and dining facilities plus active and diversified social programs.
Q. Does full service mean more members and crowded conditions?
A. The key ratio here is the number of members per hole of golf. If a 36-hole club has 580 golf members (16 per hole) and an 18-hole club has 340 (19 per hole) the smaller club will have the greater density. A larger membership also provides a better base for bearing the cost of top quality facilities and services as well as providing highly qualified management. It is important to note that in a club controlled by the members, the number of members may only be changed with the approval of the membership.
Q. What is the average age of members?
A. Quail Creek has a diverse mix.
Q. How else can I learn about the members and their activities?
A. You can ask for information on where members have come from, e.g. by state. But one of the best inside looks at any club lies in its newsletters and you should ask for several issues to scan at your leisure. Obviously, if you have friends who are members, talk to them in depth - especially about the Club's overall reputation in the community.
Q. What about the location of the club?
A. Only you can answer this one. If you want to live within a country club development, you certainly can do so. If you prefer to choose a home or condominium near the Gulf or elsewhere, you must select a club where on-site residency is not a requirement and you will probably want to be no more than a thirty-minute drive away. In either case you have a wide range of opportunity because there are more golf courses per capita in Collier County than almost any other place in the country.
Another point about location: how close is the club to the airport, to I-75 and other major thoroughfares? Noise from these sources can be an annoying distraction - especially in the busy season.
CLUBS OWNED BY DEVELOPERS
Q. How long do developers retain control?
A. Sometimes only a few years. Sometimes much longer, particularly if lot sales lag behind hoped-for timetables. Generally the developer sets a target number of memberships that must be sold before turnover of ownership to members. Until that time, it is important to remember that the club is in bottom-line control of the developer, including the terms of the transfer of ownership.
Q. What happens upon transfer of ownership from the developer to the members?
A. First of all, the members accept financial and legal responsibility of the entire club according to the developer's terms (unless modified in negotiations before the transfer). Many clubs have a difficult time managing this transition successfully, because the strategies that served the developer's purposes are probably not appropriate for the long-term benefit of the club and its members. Significant changes in club financial management, bylaws, dues, rules, etc., are almost always necessary.
Q. Is it more desirable to join a "mature" club?
A. Clearly a club whose members have weathered this challenging transition process and have established effective member control offers a more stable and predictable situation. Even though change is as much a part of club operations as in life in general, those considering membership should be able to concentrate on enjoyment of club facilities and programs and not on financial uncertainty.
MEMBERSHIP ARRANGEMENTS
Q. What are the types of memberships offered in the Naples area?
A. There are five types:
1. Equity - Members own a share of the club.
2. Non-equity - Members do not own a share of the club.
3. Interim - Members have use of the club under limited conditions; no ownership.
4. Annual - Members have use of the club for one year at a time; no ownership.
5. Daily fees - Nonmembers are allowed to use club on a onetime basis.
* Quail Creek Country Club only offers Equity
Q. Tell me more about "equity".
A. Generally speaking, equity refers to that portion of the initiation fee returnable to you when you resign. Here are several examples of variations currently offered:
1. 100% Equity - Full refund of the exact amount paid in.
2. 50% Prevailing - 50% of the fee in effect when the membership is sold to a successor member. This can be more or less than the resigning member paid in.
3. 50% Frozen - 50% of the amount paid in; fixed.
4. $10,000 Frozen - Amount of payout arbitrarily fixed, regardless of any changes in initiation fees since the resigned members joined.
Currently no member-controlled quality club in the Naples area offers 100% equity. It is not viable in the long term.
Quail Creek Country Club offers 50% prevailing.
Q. Why is there so much difference in initiation fee and equity approaches?
A. Established, member-controlled clubs generally use conservative formulas that are accurate reflections of their actual ongoing needs. Developers tend to use various forms of membership fees and nominally high equity formulas to enhance cash flow while they strive to sell out their projects; However, high equity means very little if there is no assurance as to when it will be paid out. It is also a fact that such special arrangements are generally discontinued as soon as lot sales and full membership sales will allow.
Q. What should I know about reserves for capital replacements?
A. For member-owned clubs across the USA, the income from membership turnover is vital for funding reserves for long-term capital replacements (such as roofs, parking lots, air conditioning, etc). Developers leave the scene when the club is turned over to the members, so they are not concerned about creating and maintaining such reserves.
Q. In either case, how soon could I expect to be paid out if I resigned?
A. For all clubs, equity is paid back by the club, but only as the transfer agent, with cash provided by a new member. In a mature, member-owned club with full membership, the transfer is simply a matter of processing the turnover. However, in a developer club, the general practice is to require sale of any unsold developer memberships before resales are processed. This could be months, years or never, if the development should fail.
Q. Is membership turnover an asset?
A. Particularly in retirement areas like Naples, age alone makes membership turnover a fact of life. A mature, member-controlled club learns how to cope with this situation and how to maintain a waiting list. Since most clubs require that resigning members pay dues for up to six months, expeditious handling of turnover has distinct financial advantages in this respect as well as in equity payout.
MEMBERSHIP SATISFACTION
Q. The satisfaction level of the membership is an excellent method of separating advertising "hype" from reality. How do I find out what the membership thinks about a club?
A. Ask to see the results of recent membership surveys - preferably one that has been conducted by an outside professional organization, which has no bias in determining the results.
SUMMARY
Member-owned clubs operate with a Board of Directors elected by the members and dedicated to serving the long-term interests of the membership.
Developer-controlled clubs have two objectives: (1) to sell out the development at a profit and (2) turn it over to members and move on to another project.
Until turnover, the developer has unilateral control over all matters concerning initiation fees, dues, bylaws, etc.
While most developers are ethical business people, their projects generally require years to sell out and no absolute assurance of success can be guaranteed.
Tempting promotional concepts offered by developers should be weighed against the stability of mature, member-owned and controlled clubs.
Insist on being able to review the entire membership agreement, bylaws and other related documents at your leisure. Read them carefully before you make your choice.
