TERRAVITA GOLF CLUB & TROON GOLF MANAGEMENT … ASKED QUESTIONS.pdf · TERRAVITA GOLF CLUB & TROON GOLF MANAGEMENT ... MEMBER EXPERIENCE 1. Will the transition to Troon affect the

TERRAVITA GOLF CLUB & TROON GOLF MANAGEMENT

FREQUENTLY ASKED QUESTIONS

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MEMBER EXPERIENCE

1. Will the transition to Troon affect the services, events or activities of TGC?

No. There will be no reduction in services, events or activities. In fact, we expect to leverage

Troon’s knowledge and experience to better our events and activities. And, through a

commitment to training and employee development, we expect the quality and consistency of

services to improve.

2. What will be the impact of our financial performance?

By leveraging the Troon management services model, there is the potential to increase our

annual Operating Profit. That impact will depend on the actual implementation of any of the

various strategies.

3. What is the impact on our Course Maintenance and Agronomy?

David Dube will continue to be our Greens superintendent; in addition, Troon brings a wealth of

experience in course maintenance and agronomy practices that will help us improve course

conditions. We expect our course to be maintained at a very high level and expect continuous

improvement through the Troon agronomic team. Troon is intimately familiar with North Valley

courses (Troon Country Club and Desert Forest are under the Troon umbrella) and understand

the challenges we face with weather, soil conditions, effluent water, etc.

The association with Troon will provide new resources for our Superintendent that includes a

large network of golf clubs to share best practices and compare key metrics. We are very

excited about the procurement side of the business where Troon has significant leverage with

national vendors. We expect to see significant reduction in our commodity purchases such as

seed, chemicals, fertilizer, rock, etc. as well as the price of course maintenance equipment.

These best practice programs along with the significant procurement gains will drive cost

savings and efficiencies which can be put back into the course. Finally, the association with

Troon will provide a clear career path for some of our Course Maintenance staff.

4. How will members experience the changes?

Members can expect to see improvements in the consistency and quality of services as a result

of increased commitment to standardized procedures and employee training, not just in course

maintenance but across all operations of the Club. Additionally, reinvestment of cost savings

can go toward improved course maintenance and conditions.



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TROON AND THE MANAGEMENT SERVICES

1. Who is Troon? How long have they been around and what do we know about them?

Troon is the largest independent management services company in the world for country club,

golf club and resort management. They manage over 150 facilities in 32 states and 27 countries.

Troon managed clubs generate $460 million in annual revenues. Nearly half of that revenue is

from 48 member owned clubs. Troon was founded in 1990 and employs over 9,000 people. Its

headquarters is in Scottsdale with additional offices in Switzerland, Dubai, Australia and Hong

Kong.

2. Why did we decide to use a management services company?

The fundamental challenge for premium private clubs is ‘How can we deliver a consistent high-

quality club experience for our members while reducing or constraining costs? By leveraging

the collective size and number of many private clubs, a management services company can

reduce cost through increased buying power and can improve service-levels by sharing best

practices, training programs and specialized knowledge. Additionally, the use of a management

services company allows the Golf Board to focus on policy and direction rather than on the day-

to-day management of the Golf Club.

3. I heard that management companies are better for public golf courses. Why use them for

a private club?

We felt that Troon’s ‘Prive’ Division (their premium private club division) was the ideal fit for

premium private clubs such as ours. Troon has 48 private clubs under management across the

world with 22 private clubs in the USA, including Troon Country Club, Desert Forest and

Firerock locally.

4. What are the risks of using a management services provider?

Through due diligence and our contract negotiations, we have minimized the risks related to

cost, control of strategy and direction, personnel change, financial performance, member

satisfaction and termination. There is a small remaining risk related to the ability of our Board

and members to articulate the services, culture and facilities that we desire so that Troon can

manage towards our vision. We have the option to continue or not continue the contract after

2 and ½ years.



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5. Will Troon be able to help with Membership sales?

Absolutely! New memberships are critical for the success of TGC. This challenge is typical in the

Private Golf Club industry. And, most clubs cannot afford to hire full time marketing experts or

marketing agencies. With the shared knowledge model that Troon brings, we will have access

to experts in membership marketing that can help supplement our TGC marketing programs.

6. This was a significant decision. Was there any investigation and due diligence?

The decision to sign with Troon was the culmination of a year-long effort by the Board of

Directors. The process included the definition of what was needed to best serve the members

of our Club along with available options. There was then validation and due diligence of those

options.

7. What is the term of our agreement with Troon?

As answered above, we have an initial term of 2 ½ years that is renewable at the Club’s option.

8. Can we afford the fees for Troon? Will our dues increase because of this?

Yes, we can afford this and no, we do not expect our dues will increase because of this. Due to

Troon confidentiality requirements, we cannot disclose the exact dollar amounts. However,

there will be substantial administrative and payroll savings that along with procurement gains

that will offset the fees for Troon. Looking ahead, we anticipate continued efficiencies via Troon

that will help us minimize any dues increases.

The most important item affecting our dues increase is membership, as you have heard many

times at our membership meetings and just last month from Mark Deardorff and the Marketing

Team. It is important for us to maintain an aggressive marketing and pricing program to help

drive new members.

9. Why was the Troon decision made by the Board and not the entire membership?

First, this is the responsibility of the Board. Second, this decision required extensive review and

analysis of all aspects of the operational areas of the Club. This involved confidential

information in a number of areas for us and Troon including that of current and former

employees. It would have been inappropriate to share that information with members.



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10. Did all the Board members agree that this was the right decision for Terravita?

Yes. The decision to move forward with Troon along with the decisions required to affect the

transition were approved unanimously by the Board. Additionally, all of the former Board

Presidents were involved in the process and were in full agreement.

11. How did we select the new Director of Golf?

The first decision in this process was the question of whether to utilize a management services

company or continue with our historical organizational structure of having members of the Golf

Board supervise the Management Team. Our analyses showed there were major financial gains

but more importantly significant management and expertise gains to be made by using a

management services company.

So, once the decision was made to utilize a management service company and specifically

Troon’s services, we asked them to help us select a new Director of Golf as their first priority.

Troon has perhaps +100 golf pros in their management inventory. They have a developed

succession program within their organization that includes a Leadership School. Troon

recommended their number one candidate for us, Jeff Brinegar, as someone who would not

only complement Terravita but also move us forward in the Scottsdale golf community. Their

candidate exceeds our requirements in every area. After an extensive interview process, the

Board was unanimous in moving forward with Jeff for very specific reasons – solid professional

background, a customer service orientation, good people manager, retail shop experience and

someone with an incredible attention to detail whether it is on the golf course, the pro shop or

in outside services. You will have the opportunity to meet Jeff shortly.

CURRENT EMPLOYEES

1. What will happen with the current employees?

All current employees are invited to remain with our Club. As an administrative requirement, all

employees will be transitioned from being employed by TGC to being employed by Troon. This

transition will take place during the November-December 2013 period. Roles, responsibilities,

job descriptions and reporting structures as well as compensation will not change as a result of

the agreement of transition. As part of the Troon transition, employees will move to Troon’s

benefit programs, which are more aligned with a large group plan vs. the small business plan

held by Terravita.



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2. Will any employees be terminated as a result of our agreement with Troon?

No. There are no plans to terminate any member of the current workforce.

OWNERSHIP, CONTROL, MANAGEMENT AND GOVERNANCE

1. Does the agreement with Troon change the ownership of the Club?

No. The ownership structure of the Club remains unchanged. Terravita is a member-owned

Private Club.

2. Do we still need a Board of Directors if Troon is managing the Club?

Yes. The Board is responsible for governance of the Club. That means the Board is tasked with

defining strategy, setting goals, approving budgets and providing oversight of the management

of the Club. The Director of Golf is then responsible for executing the strategy and managing

the employees of the Club to attain respective goals. Troon will apply their expertise at the

management level to focus on operational performance and employee development. Troon

does not replace the Board.

3. Will members still have a voice in setting the future direction of the Club?

Yes. The strategic direction of the club and the annual operating objectives are still defined by

the Board and its committees, which are composed of members. When it comes to strategy,

Troon serves as an extension of our knowledge and expertise to enable more informed, lower-

risk decisions. Troon will not be tasked with or authorized to define our strategy.

4. How will the agreement with Troon affect our identity as Terravita Golf Club?

Our name and identity remain unchanged. We are still Terravita Golf Club. We are not required

to publicize our agreement with Troon or use their name in our facility or in any promotional

materials. If, in the future, we find there is a benefit in identifying Troon as the provider of

management services to our Club, we have the right to use their name and logo.



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5. Will Troon be able to make changes to our Club or personnel without consulting us?

The Board has retained the right to review and approve changes to personnel at the

department head-level and up. Changes in other staff members remain at the discretion of the

respective department head. Additionally, the role, responsibilities and authority of the

Director of Golf has not changed based on our Troon agreement.

6. How can members provide feedback on what we experience with Troon?

For general feedback, members should continue to contact the Board of Directors. To provide

constructive feedback on a specific employee or experience at the Club, members should

contact the appropriate supervisor or the Director of Golf.

Documents

TERRAVITA GOLF CLUB & TROON GOLF MANAGEMENT … ASKED QUESTIONS.pdf · TERRAVITA GOLF CLUB & TROON GOLF MANAGEMENT ... MEMBER EXPERIENCE 1. Will the transition to Troon affect the