A little over two years ago, members took over their beach and golf clubs at Mediterra.
A cloud of uncertainty lifted, as club ownership shifted from the financially strapped developer, Bonita Bay Group. It came at a price: Mediterra's members paid $6.8 million in cash for their clubs and assumed $15 million in debt for a Community Development District, created to help develop roads and provide other basic services for residents.
Members also agreed to put up money for future improvements as part of the sale.
Since the transfer, the golf club in North Naples off Livingston Road has been spiffed up and has attracted new members.
"It's going spectacularly well. I would say we have exceeded our wildest expectations in terms of membership growth, just growth and development of the club," said Richard Schmidt, who served as the first president of the member-owned club.
Bonita Bay Group, a Bonita Springs-based developer, sold off a handful of its clubs to its members in 2009 and 2010 as it fought off bankruptcy. Other clubs have seen renewed interest with the change in ownership that put their members in control.
With 441 members, the golf club at Mediterra is expected to reach its cap of 450 by the end of the winter season, said Schmidt, who helped negotiate its sale to members.
On top of the hundreds of golf members, there now are about 100 sports members and more than 200 social members using the club for other activities, such as tennis. When members took over the club, there wasn't a social-only membership.
Many of the club's new members are new residents of Mediterra. With an improving housing market, sales have picked up in the luxury gated community, generating new prospects for club membership.
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"The worst years were 2008 and 2009. Sales increased in 2010, over 2009 ... 2011 is going to be a much better year than 2010. We're hopeful that trend is going to continue, but who knows what is going to happen with the real estate market," Schmidt said.
At the time of the sale, golf members at Mediterra contributed $19,000 each and sports members paid $6,000 each to purchase their clubs, to recapitalize them and to pay for immediate improvements.
More than $2.5 million has been spent on improvements since members purchased their golf and beach clubs. About $750,000 was spent on a new outdoor dining area with a bar at the golf club. Other additions include bocce courts and there are new tennis courts under construction, which will include a stadium court where exhibition games can be played.
The beach club at Mediterra also has undergone renovations, including freshening up the inside. The beach club membership is part of the golf and sports memberships.
"We've brought our golf courses, conditioning wise, back to what they were before the developer ran into financial problems," Schmidt said. "They were neglected."
When members first took over the club, the new board borrowed money, but "we immediately paid it back," Schmidt said.
"We have been able to make all of the capital improvements and still have a very healthy balance in the bank," he said. "So we've had no assessments, and we have been able to make the improvements with the regular cash flow."
New members pay about half of what the original members did to get into the club. The fee for new members is now $85,000, which is non-refundable.
For years, Bonita Bay Group touted its unique club membership fee refund policy – money back within 30 days of resignation. But in fall 2008, the company suspended refunds after seeing a surge of resignations and a "run on the bank" by members seeking refunds at its golf clubs, including Mediterra.
The roughly 25 members who wanted to resign from the old club at Mediterra and didn't want to join the new member-owned club have all gotten their deposits back from Bonita Bay Group, Schmidt said.
The new club at Mediterra offered 20 memberships to outsiders who don't live in the community and most are sold, Schmidt said.
He said members who joined the club when it was owned by Bonita Bay Group and then joined the new club are eligible for a partial refund of their original deposit "if the club can afford it." They'll also get back their initial capital assessment, Schmidt said.
Like the club at Mediterra, the Bonita Bay Club off U.S. 41 in Bonita Springs has grown and gotten a new look since being taken over by its members.
The club at Bonita Bay has added nearly 100 members since it was purchased in March 2010.
The club has 2,002 members total, including 1,232 golf members, said Stephanie Glasco, an assistant to the Bonita Bay Club's manager. There are several types of memberships, including tennis and social. The initiation fee for a golf member is now $50,000. Golf members pay $850 a month in dues.
Members purchased the Bonita Bay Club for $11.5 million in cash. When members bought the club, they agreed to pay capital assessments for sorely needed improvements on top of the transfer fees. One-time assessments ranged from $1,200 for golf members to $360 for social members.
A few months after the sale, the Bonita Bay Club's new board approved $3.5 million in capital improvements, which included sprucing up the entrance to the club, redoing the tennis center, giving the fitness center a facelift and updating the Creekside golf course. Later, the board approved another $3 million in improvements for 2011, including adding 250 new GPS-equipped golf carts and nearly $1 million in new golf course maintenance equipment.
Here's a look at other Bonita Bay Group clubs and properties, past and present:
■ Shadow Wood Country Club at The Brooks in Estero has done "exceedingly well" since it was sold to its members, said Bill Wagner, general manager and chief operating officer.
It has been nearly two years since members bought their club at Shadow Wood and it's debt-free. Members purchased the Shadow Wood and Commons clubs in The Brooks for $8.25 million. The board will vote soon on some improvement projects for the club, which was built about a dozen years ago.
■ At TwinEagles off Immokalee Road in North Naples, The Ronto Group and Angelo, Gordon & Co. purchased TwinEagles from Bonita Bay Group for $11 million in September 2010. Improvements are ongoing.
■ Bonita Bay Group still operates the marina club and the restaurant, Backwater Jack's, at its flagship community, Bonita Bay. Members got their deposits back after they rejected a final sales pitch from the developer following months of negotiations.
■ At Verandah in Fort Myers, Bonita Bay Group still operates the club and controls the community. Memberships are growing with the community, one of the developer's newest on the banks of the Orange River. As of November, new home sales at Verandah had doubled over last year.
"Certainly, many of those sales translated into memberships," said Tina Matte, a spokeswoman for Bonita Bay Group. "However, we have introduced a nonresident membership, which has also been received very well in the marketplace because of its value, compared to other clubs."
■ Earlier this month, Bonita Bay Group announced that homebuilder Taylor Morrison had purchased the remaining home sites in the Sandoval community in Cape Coral, which the developer launched in 2005. It was the developer's first community that didn't include a golf course. There's a clubhouse and other amenities, including a two-mile linear park and a resort-style lagoon pool, but no membership is required.
Sandoval remains a top-selling community in Southwest Florida, with 120 new home sales in 2011 alone.