Last week I wondered if Brian Hewitt had it right about the new $32 million price tag on the TPC Sawgrass clubhouse. Sure enough, Golfweek's Adam Schupak confirms it and shares some of the
excuses reasons why the cost just about doubled.
It’s a far cry from the original TPC clubhouse that was built for $1.3 million and opened in 1981. Former commissioner Deane Beman built the project under strict orders not to use the Tour’s assets or put the Tour at liability. This time, the Tour’s co-chief operating officer, Charlie Zink, established a reserve fund that reached $45 million in anticipation of renovations.Sounds so quaint!
Those reserves will be replenished in five to seven years, according to Pillsbury. How so? Through a combination of club operations, tournament revenue and sponsorship fees.
The Tour sold three companies – UBS, PriceWaterhouseCoopers and Jeld-Wen – “proud partner” tournament-sponsorship packages that include TV inventory and dedicated hospitality and meeting space within the new clubhouse. Its predecessor had limited indoor space for entertaining and little useable space for hosting outdoor events.
The new clubhouse is more than just a place to change shoes and grab a hot dog. It features a Champions Lounge, separate member, player, and resort guest locker rooms, a golf shop, a 2,550-square-foot main dining area with a 1,300-square-foot terrace, and 13,800-square-
feet of banquet and meeting space.
The clubhouse’s second story is dedicated mainly to the three “proud partner” rooms, each large enough to seat 130 people. Each of the three companies signed a six-year deal that insiders estimate costs $12 million to $14 million annually. (Of that amount, $4 million to $6 million is earmarked to replenish the reserve fund.)
Efforts to further boost the clubhouse’s sponsorship revenue potential led to cost overruns. Initially, Tour executives had planned to build two “proud partner” rooms, but later added a third. The project originally was budgeted between $18 million and $22 million; it cost nearly twice as much to complete.
Satisfying sponsors’ needs also came with a price. During an early site visit, sponsors noted that the commissioner’s hospitality area had a patio. Now the “proud partner” rooms do, too.
Wow, those are some expensive patios!
While construction benefited from the driest summer in 22 years, the Tour still had to dip into its rainy day fund. To ensure the facility would be open for this year’s tournament, a construction schedule of slightly less than a year from demolition to completion was implemented, leading to $2 million in overtime. Normally, a project of this magnitude would take 18 to 24 months, Pillsbury says. Moreover, there was a 30 percent increase in the cost of materials such as steel and concrete during construction, adding $6 million to the final bill.
“The money meter was running on all this stuff,” Pillsbury says.