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FAQ

Here are some answers to frequently asked questions about the South Golf Course renovation:
Q: Why renovate the South Golf Course?
A: In its current state, the South Golf Course presents a continuing challenge to achieving consistent and desirable playing conditions. At Town Hall meetings held in January and March 2018, Rees Jones & Bryce Swanson of the internationally recognized golf course design firm of Rees Jones, Inc. highlighted many of the significant issues facing the course. The current course condition represents what you might find at a public course or lesser quality private course, and most certainly not complimentary to the BallenIsles brand. Below are some of the significant issues that we face:
  • 50+ year-old irrigation system suffers frequent line breaks and provides poor to inadequate coverage
  • Drainage issues throughout the course
  • Greens reduced by 30% as the fringe has encroached and the grass became contaminated with mutations
  • Bunkers plagued with poor drainage, seashells as well as stones and the sand has compacted beyond simple maintenance
  • Tees crowned and poorly oriented
  • Fairways and rough have contaminated turf
  • Cart paths are broken and require replacement
  • Bulkheads require extensive repairs, replacement or elimination
In the opinion of our staff, the Board and most importantly, outside professionals, only a total golf course renovation can adequately address and resolve the scope of these challenges. In addition, a piecemeal approach will not only cost more over time, but will have the course completely closed for several months each year while the different infrastructure needs are worked on.
Q: Is it possible to just re-grass, repair bunkers and fix the serious irrigation and
drainage issues and not have a total renovation?

A: Unfortunately, the problems facing the South Golf Course are too plentiful to just repair in a patch-work fashion. As noted above, all the professionals conclude that a piecemeal approach is not a correct course of action and not financially prudent. Addressing just the so-called ‘infrastructure’ would incur roughly 85% of the cost of a comprehensive renovation. The remaining expense is directed toward ‘tweaking’ the basic design to make it more playable for all levels of golfers. Harder for the low handicappers and easier for the rest of us.
Q: Why do we ‘overseed’ the South Golf Course each fall?
A: During the winter, the grass on the South Golf Course simply cannot withstand the amount of play in the height of our golf season.  Over the years, the South Golf Course is no longer a monostand of Bermuda grass and it is now comprised of many contaminated varieties that do not provide a quality playing surface.  Therefore, for the past several years, we have resorted to overseeding the Bermuda grass with a Rye variety. Unfortunately, due to this process we lose the golf course for nearly six weeks of the year with two weeks in the fall for the overseeding process and the entire month of May for the transition back to Bermuda grass.  Most clubs that do this try to transition to installation of a new variety of Bermuda grass such as “Celebration” like we have on the East and North Courses for cost and availability reasons.
Q: I love the South Golf Course the way it is. Why do we have to change it?
A: Rees Jones, Inc.’s course design envisions enhanced playability of the course for all levels of players. Rees is known for his ability to challenge the good golfers while giving those who wish for a less stressful way around the course another option. What you love today is truly only going to get better. In choosing an architect, we had three criteria: someone that would fit our budget, someone who could improve an already good course and a ‘name’ to promote the improvements the club is making. Via a competitive process, and with the help of Troon, we got all three with Rees Jones.
Q: Why should the Club place such a high priority on the consistency and quality of
all three golf courses?  

A: There are three main points:
 
  1. Quality: BallenIsles is a premier community and all amenities should be equal to that ‘brand’. We cannot allow our reputation to be damaged. It could eventually affect the prices of our homes. The South Golf Course currently simply falls short.
  2. Usage: You’d think the South Golf Course would be played as often as the others. But reality tells a different story. The South Golf Course is selected for play less than 28% of the time. Those members playing with guests at BallenIsles selected the South Golf Course even less often. This demonstrates a clear lack of confidence in the course as well as puts additional pressure/compaction on the other two courses.
  3. Balance: The South Golf Course has not hosted a major club event in more than 15 years. Deep down, we know it is not up to the same level of playability as our other courses.

Q: After renovation of the South Golf Course wouldn't our maintenance costs go down?
A: This is not a cost savings exercise, this is a quality issue. Members would not lose use of the course for six weeks each year due to overseeding. And with the planned reduction in overall bunkers by 60%, and no contamination with rocks and seashells, they clearly would require less attention. Costs to repair of cart paths and bulkheads would be reduced--as would the need to constantly fight weeds on the greens and fairways. But it is hard to quantify the cost savings in some cases. Rather than spending money on fixing broken pipes, that manpower and expense can be spent on maintaining a quality golf course. We would expect annual operating budgets to be consistent to what we see with the other golf courses.
​Q: I am not a Golf or Sport member. How will the South Golf Course renovation
benefit me?

A: The courses are an integral part of the brand identity and compliment the overall appeal and quality of the community. The South Golf Course, in its current condition, lessens the overall appeal of the Club. Having three truly top notch golf courses is a key distinction of BallenIsles. In addition, having a world famous architect, Rees Jones, the South Golf Course will complement the other courses and help to build the brand identity of BallenIsles. By maintaining an appropriate level of integrity and quality, we provide the best opportunity to maintain, if not improve, the image of our community and the desirability of all homes in BallenIsles.
Q: How much will the renovation cost?
A: In our initial plan, the total cost is estimated to be $6,865,625. That cost though included replacing only about 50% of the cart paths. We are now recommending to add $600K to do all of the carts paths and bring the total project cost to roughly $7.5M.
Q: How will we pay for the renovation of the course?
A: Whatever we do, we will have to borrow money to redo the course. As a general principle, the quicker we repay the loan, the better off we will be. In simple terms, we considered different options to repay the loan. They ranged from continuing to rely upon only home sales to repay the loan to solely assessments on Golf and Sports members (like the North Golf Course) or some blend between the two approaches. We have to note that we are currently committed to using membership/home sales to repay all of the loan for the clubhouse through 2030. Using solely those sales for the South Golf Course would extend reliance beyond that date.
Q: In 2014, golf members gave up equity in the expectation that the South Golf Course
would be built without any assessment. What changed?

A: The cost of the clubhouse increased materially based upon members’ wants and needs. The original cost projection for the clubhouse in 2014 was simply not based upon a real design nor was it adequate for all of the club’s future needs. And while the sales of homes have been robust, we must be cognizant of long-term trends. We have to exercise a balance between what we want as a club and the prudence to pay for it without over-committing ourselves and being subject to the whims of the housing market. The bank reminds us of this all the time.
In 2014, when all members gave up equity to help fund future projects, golf members did give up more than other member classes. But Tennis and Social members gave up a bigger percentage (almost double) of their equity. Since 2014, each year Boards have operated on the premise that debt for the clubhouse renovation would be re-paid solely from revenue generated by home sales. While, in hindsight, the wisdom of this could be questioned, this was what members were asked to vote upon. And they did indeed elect to do so. Having three top-notch golf courses will make the re-sale of homes with golf memberships more attractive than if the courses were not all in great shape.
Q: When will we see the proposed course?
A: Member focus group workshops were hosted in January and March of 2018. Video of each workshop is available on the South Golf Course renovation website. Each workshop included a narrative of the project along with Rees Jones’ hole-by-hole vision for the course. Member questions and comments were answered by the Rees Jones’ team along with insight from our professionals. This was followed by a member Q & A session.
Q: When will the project begin and end?
A: When approved, construction will begin in April 2019, be completed in September 2019 and be ready for play in December 2019. When play begins, it will be cart path only for a period of time, as it was for the North course.
Q: What are we voting on and when will we vote?
A: There will be two votes, on the same ballot, in December 2018.
  1. Golf and sports membership categories will vote on doing the project.
  2. All membership categories will vote on the financing for the project. This vote is unweighted—one member one vote.
Both votes must have a majority for the project to move forward.


Q: How are you proposing to repay the loan for the golf course?
A: We believe the best approach is to rely upon both membership proceeds from house sales as well as assessing golf and sports members. With the benefit of the additional $10K initiation fees that started in June 2018, we would have to borrow only $5M. In this way, the $7.5M renovation would be paid off in only four years with golfers paying $100/month and sports members $66/month.
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Q: How am I supposed to support this project when we have a clubhouse under construction and we don’t yet know if that will finish on time or on budget, and I don’t know yet how much more it is going to cost me?
A: You are right. Our plan, today, is to have the vote for the South Golf Course in December 2018. By this time we will know how much we are paying with the new clubhouse and will also know if we are even in the new clubhouse. December 2018 is the absolute latest we can push the vote in order to get a vote passed in time to start the project in April 2019.
Q: The Club has a lot of debt. And much of it is being repaid by the sales of homes.
Isn’t that risky?
A: That is a view and why we are proposing assessments to repay a portion of the bank debt. And repay the debt as quickly as possible. We do have the ability to borrow the money without assessments to do the South Golf Course, as originally described. But, we must be prudent and can’t continue to avoid assessments to get the things we want. We leave it to the members to decide.

Q: What does $7.5M get us in a renovated golf course?
A: The $7.5M spend is outlined in the budget included in the SGC website. It includes a fully renovated golf course from tee to green. It includes all new cart paths, bulkheads where needed, and the like. It includes golf course signage, ball washers and accessories. It does not include new restrooms or bridges or other such infrastructure. It also includes about $200K in soft costs that will be incurred to get us to a vote. It does not include interest on the loan. Interest is shown on the financing model on the Financing tab on the SGC website. If it is not shown on the budget, then is it not assumed to be included. If you aren’t certain, please ask.

FAQ II
 Q: In 2014, when members gave up equity for the clubhouse and golf course, the estimated cost of the South Course renovation was $6M. What happened?​
A: THAT WAS SIMPLY AN ESTIMATE MADE NEARLY FIVE YEARS AGO. SINCE THEN, WE RETAINED AN ARCHITECT AND INVOLVED RON DESPAIN OF TROON, WHO WAS THE PROJECT MANAGER FOR THE NORTH COURSE RENOVATION. COLLECTIVELY, THEY NOW ESTIMATE THE COST OF A FULL RENOVATION TO BE APPROXIMATELY $7.4M. THE RESALE OF HOMES/MEMBERSHIPS IS STILL PAYING FOR ALMOST 40% OF THE COST OF THE COURSE.  ​
Q: I know the South Golf Course is old but each winter with overseeding it looks great and plays well. Why can't we continue to do that? 
 A: The process is just a band-aid. It is done to mask how poor the course really is. Other clubs have moved away from overseeding and we need to do that also. It is an extra cost and we lose use of the course for at least two months each year during the overseeding period. And it does not address the underlying problems of irrigation, drainage, contaminated bunkers, broken cart paths, etc.  
 Q: The South Course Is Considered to be our most beautiful and popular course. Why change it? 
​A: Most members agree that the 'bones' are still great but the infrastructure is 'shot'! The proposed renovation would not change the fundamental structure but rather make it easier to maintain and more fun to play. Some holes are artificially challenging to many golfers-especially those with higher handicaps. At the same time we are repairing the huge, contaminated bunkers, we can make them smaller, easier to maintain and fairer to players. The greens are needlessly, abnormally elevated. These too would be modified for variety and ease of play. These are but two of the 'tweaks' in the design while maintaining the fundamental structure.  
Q: WHY NOT WAIT ON HAVING THE VOTE? 
​A: Waiting and  doing nothing is not a very appealing alternative. Having two good courses and one not so good is hardly a positive factor in maintaining the value of homes and club memberships. We will have been in the new clubhouse for six months before the course renovation would even start. If we delay a year or two, the course will continue to degrade, maintenance costs will go up, our basic financial posture will not have changed and the eventual renovation will very likely cost more with interest rates higher. We haven't had a catastrophic failure (like a bulkhead collapse) but it could happen. The bank is willing to lend us the funds to get the renovation done now. We have a reasonable financing plan and we have the team in place to do it.  
FAQ III
Q: ​Why do Social and Tennis members vote on a golf course project? 
​A: As outlined in the By-Laws, there are three votes required: 
 
1. ALL members must vote on capital projects of more than $250K not included in the Annual Capital Budget, i.e., approving the project. Weighted vote.

2. ALL members vote on borrowing of more than $4M and more than 2 years. Unweighted vote. 
 
3. Only Full and Sport members will vote to approve any assessment.  
 
This is the first time that we can find where three votes are necessary.  
Q: ​Can we pay the monthly assessment up front?  
​A: Yes, we will offer an upfront payment that will have a small discount, dependent upon rates at that time, similar to how the assessment payment for the East Course and Sports Complex was offered. This will be outlined in more detail as we get closer to the vote. 
Q: What happened to the loan of $7M that we were supposed to have from the bank?   
​A: That offer, or availability of funds, is still there. The final determination though, by our South Course Financing Committee, Finance Committee, Board and outside professionals, was that borrowing a full $7M, when we have cash available, was not the prudent or responsible thing to do for our members. Our cash forecasting tells us that we have the funds available, without putting the Club or our cash reserves at risk, to fund a portion of the project through available cash and home sales, while borrowing only $5M. 
Q: Why are we only financing the loan over 4 years, why not a longer period?  
​a. It pays off the loan in a shorter period of time to clear the way for additional future projects that will be on our horizon, i.e. Sports Complex; 
b. It is consistent to the timeline of payments we experienced with our successful North Course renovation;  
c. It saves hundreds of thousands of dollars in finance charges and reduces payment risk; 
d. The majority of members we have heard from preferred a shorter payback period; 
e. It limits long term debt burden and assessments, which is more amenable to future home buyers

FAQ IV

Q: why do we need a "big named" architect like rees jones to do the south course?
Most people wouldn't build or renovate a house without an architect. The very same applies to a golf course. Getting a 'name' designer (like Jack Nicklaus) is appealing from a PR perspective but more costly. When the club renovated our East Course ten years ago we had a recognized architect, Keith Foster. The design and costs remain controversial to this day. For the North Course, we then had the expertise of Ron Despain of Troon to assist with the budget and serve as our project manager. With a little known architect, the North Course was designed and built on schedule and at far less cost than the East Course. 
​
It may be difficult to remember but the conditions of our East and North Courses were really not much different from where the South Course is now. Irrigation and drainage shot. Bunkers contaminated with rocks and seashells. Weeds. Bulkheads near collapse. As we considered what to do now, we searched for an architect to lead the way for the South Course. With Ron Despain, we sought proposals from the 'big names' as well as those who worked on our East and North Courses. Many of the highly recognized names were still beyond our means ($750,000-$1,000,000). The lesser known became a lot pricier over the six years since we did the North Course. Quite fortunately, because of Troon, we were able to get the services of Rees Jones, a big name architect at a lesser name fee when compared to others.   

Having done over a hundred courses, Rees is not only a 'name' but he has a reputation particularly suited for the players at BallenIsles. At the very same time, Rees can make a course more challenging for lower handicap golfers, and make it easier for those of us who need the extra stroke (or two) to reach the green. Take a look at some of the re-design and you'll see simple 'tweaks' like shifts of greenside bunkers and re-orientation of greens. Rees' design would also shrink or remove the massive fairway bunkers that serve little purpose and cost a lot to maintain. Moreover, those who like to play the North course, will now have another course that will compete for their affection.

For those of you who enjoyed Tiger's comeback this past week, the setting provided by the East Lake Golf Club was just as "major". A truly world-class golf course, played regularly by members and juniors, yet provided a test for the ages to the best in the world. That is the work of Rees Jones, who reconstructed the Donald Ross design and oldest club in Atlanta. Rees was not only called on once to renovate the Home of Bobby Jones, but twice. What was on display was the subtlety of great golf design. It was what Rees brought to the East Lake and why he is known as the "Open Doctor". 

Similar to what Rees started with at East Lake, the proposed design would leave much of the 'bones' of what we have and like, but make it more fun to play. It would put the luster back to the South Course that it once had, and implementing these shifts costs little when redoing the basic infrastructure-no more than a 15% premium.  

The choice is quite stark. If we do nothing, we soon may not have a playable course at all. But in going forward, we have a team (Rees Jones and Ron Despain) that have a proven track record of reliably and economically renovating courses like ours. The choice will be yours. 

FAQ V

Equity Reduction FAQ  ​
In our South Course workshops and discussions, one item that always comes up is the history of the equity reduction and what our membership got for it.  
   
 Let's go back to February 2014 when a plan was outlined by the Board to identify future spending needs of the Club. The membership voted and agreed to an equity restructuring which would help fund a portion of approximately $28M of projects over the coming years. The projects, at that time, were projected in cost and scope to include $17M for a Clubhouse refresh, $6M for a South Golf Course renovation and approximately $4.4M for other efforts. That equity reduction included all members by reducing the equity return on their membership by different amounts and percentages based upon the membership type.   
   
 The equity reduction was to enhance the capital that was raised from the sale and resale of memberships as houses turn over. That is partially how the Sports Complex and the East Course renovation were paid for, in addition to the member assessment. The equity reduction simply added to the amounts generated by membership sales, to help meet the future needs of the Club.   
   
 Over time, planning evolved. Member workshops and focus groups elicited what members wanted in a new clubhouse. Based on that, in November 2015 members were asked to approve a $30M Clubhouse renovation but it did not pass as there were no detailed plans or cost analysis. Then after development of architectural and engineering plans as well as a Guaranteed Maximum Price proposal from a builder of approximately $35M in 2016, the members approved the project without any assessment. Even though this was double the initial Clubhouse projection and substantially greater than the total of the original equity reduction plan, the financing strategy didn't change.  
   
 The equity restructuring voted on and approved in 2014 when coupled with home resales is how the Clubhouse was funded without an assessment. What changed was the fact that all the funding went to pay for one project, the Clubhouse, rather than three separate ones as originally discussed back in 2014. But again, all of this was approved by the membership along the way. The initial equity restructuring plan outlined in 2014 more than worked since we were able to fund $35M in projects.  
   
 The remaining projects still have to be done and will have to be funded in some manner. Four years ago, members already knew that the South Golf Course required renovation. It is long overdue and its time has come. Continuing to patch its fairways, bunkers and greens is throwing good money after bad. It is our firm belief that a comprehensive renovation is the right approach. Relying on a proven architect (Rees Jones) and project manager (Ron Despain who managed the redo of the North Golf Course), we have proposed $7.5 million project. This would be financed by borrowing $5 million (plus $400K in interest expense) and using $2.5M from proceeds from the sale of homes/memberships. We will repay principal on the loan over 4 years by an assessment to Full and Sport members equal to $100/ month and $66/ month, respectively. Tennis and Social members pay nothing toward the renovation. At the end of 2022, both the borrowing for the East Course and Sports Complex (which we continue to pay down by $2M per year) as well as the South course will be paid off. The only loan outstanding will be for the Clubhouse ($22 Million) and that will be paid off in 2030.  
   
 While some may wish to debate the merits of the equity restructuring they voted on to include a golf course, it didn't turn out as presented. The timing and scope of projects changed to reflect member preferences which they approved. Although what actually occurred is remembered in different ways, all members gave up a portion of their equity return. While some gave up a larger dollar amount, others gave up a larger percentage.   
   
 We now face a South Course renovation. Delay will only increase our operating costs but also the eventual cost to redo it. Its continued deterioration will eventually affect the value of our homes and memberships. We believe we have proposed the best approach with a proven leadership team and sound financing. Going back and revisiting the equity restructuring is simply not practical or reasonable, nor do we believe it is in the best interests of the members. And, while we respect individual views, these are the facts as they stand today. 
BallenIsles Country Club
100 BallenIsles Circle
Palm Beach Gardens, FL 33418
Phone: 561.622.0220
Fax: 561.626.3941
[email protected] | ballenisles.org
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