Pro by Isobel Kleinman
I believe that passing the proposal is the best thing members can do. Let me explain what I learned that helped influence my thinking.
Should this deal go through, we will have the money to pay off our debts and will be in the black going forward without using any of it for continuing operations.
We can pay off our loan and what we owe the Gardens which would save us $18,000 per month/$ 216,000 per year.
We can anticipate eliminating about $67,000 in taxes once the 2.3 acres that Stadium sits on is no longer in our possession. (We pay a total of $337,000 in property tax. The stadium sits on about 20% of our land. This figure is accurate if we are not reassessed.)
The clam shell (without the solar roof that the builder can build for us) would lower our energy costs by 20-30%. With the solar roof (which they priced almost $300,000 lower than the bid we got from someone else last year without a solar roof) our energy costs for the clam shell will disappear and the cost savings will be greater than previous estimates.
After paying down what we owe:
We would have 6 to 61/2 million to build the pool house, upgrade the kitchen and locker rooms, re-grade the courts.
While we don’t need to new members to operate in the black.
After making our capital improvements, the club will look and operate like a place new member would expect. I believe updating the facilities could go a long way to bringing in young blood.
Conjecture...we could probably eliminate the need to collect for the Century Fund and the fuel surcharge.
We would not have to assess anyone, since we would be operating in the black for the first time in decades.
We do not really own the assets to the club should the club dissolve.
Years ago, the Board applied to become a Not-For-Profit Organization. At the time, there was anticipation of a stadium sale and it was thought that the change would protect the profits so that the club would not be taxed on the capital gains. Since then, club members have been taxed for everything we do but the club itself will not be taxed for the sale unless the monies we receive are NOT used within three years of the sale. If the club does not use the funds by then, whatever money remains will be taxed at a 45% tax rate.
I don’t think there has been a suggestion that can do all that for us:
If we become partners with the builder, we will have to take another loan. After that, it would take years to realize a profit from our investment.
By necessity, we would have to delay, even further, the capital improvements that need to be done to the club.
Con by Douglas Wigdor
This letter is in response to the above letter.
I am confident that none of us would sell our backyard to pay for the renovation of our kitchen.
If the Club is going to prosper in the long term members need to pay dues that are sufficient to cover operating expenses. Similarly, if the Club is to make capital improvements and/or pay existing debt (existing debt that was used either to keep dues down ans/or for prior capital expenses), members need to be assessed.
If the Club membership wants to pay off the $1.7 million in debt – the members should pay for that. Assuming 300 “equity” members that would be about $5,500 per member. If we think it is so important to build a clam shell and/or a pool house, we as members should foot the bill. As I started this e-mail, none of us would contemplate selling our backyard to pay for the renovation of our kitchen. We would save our money or take out a loan if we had equity in our home.
In my view, it makes absolutely no sense to sell the stadium and encumber a large percentage of the land around it so that we can pay for things that may not be necessary, or that can be paid by the existing membership. Yes, it may mean taking one less vacation or not purchasing the flat screen television or the sports car that makes us feel good when we enter the Club, but we as members have an obligation to reach into our own pockets rather than selling off parcels of the land – which will ultimately place us in the same position 5 or 10 years down the road – and then, with no other options but to sell more land (at a greatly reduced value) to the only entity that would have rights to build on it – namely, Cord Meyer.
While you seem to suggest that the clam shell, pool house upgrade of lockers, etc.. will bring in “young new blood,” I am not so confident. I really do not believe that we are either losing members or not attracting members because we do not have these items. While a clam shell would be nice, I have not heard anyone say nor would I believe that anyone would make a decision about joining the Club based on whether or not we had a clam shell or, for that matter, a pool house. I would be happy to talk to you about what I think would attract new members, but that is not the purpose of my responding to your email.
It is time for the members to step up and put some of our own money into the Club. People who are voting for the sale of the stadium and the encumbering of a large percentage of the property in order to avoid paying increased dues and/or facing an assessment are acting irresponsibly to the long-term financial well being of the Club and are looking for a free ride.
We all need to make personal sacrifices and pay our share to run the Club and make the necessary capital improvements and avoid selling valuable and historical assets for short term goals.