Turning Plans Into Action at Palo Alto Hills G&CC

Even at the highest end of the initiation-fee scale, standing still will get you blown away in the club business. Here’s how this plush Bay Area property keeps moving its facilities and programs forward.

by Joe Barks (editor@clubandresortbusiness.com)
February 2007
 

 

You’re a manager at a California club that commands a $175,000 initiation fee; has a beautiful, park-style golf course with spectacular views of San Francisco Bay and the city’s skyline; is surrounded by an open space preserve that protects it from any encroaching development; doesn’t have any building more than 50 years old; has a steady pool of prosperous, young membership candidates, thanks to nearby attractions like Stanford University and the Silicon Valley; and, as if all that wasn’t enough, also enjoys for-profit status, which allows you to actively solicit outside banquet business.

Time to put your feet up on your desk and relax with the latest issue of Travel & Leisure, right?

General Manager Christian Thon (Above) has a master plan to rebuild one end of the existing Palo Alto Hills clubhouse (Left) and create a new two-story facility that will house a new fitness center and day spa (SEE DRAWINGS). Through these and other improvements, Thon hopes to bring a permanent rainbow to the property.

Not if you’re part of the management team at Palo Alto Hills Golf & Country Club (PAH), which has all of these attributes and more. In fact, the energetic managers of PAH can rarely be found at their desks at all. And when they are, their choice of reading material is more likely to be architectural drawings of improvements for the property or proofs of a new brochure showing their latest and most expansive list of available member activities.

(Or maybe, we will humbly add, they might take a moment to re-read the December 2006 issue of Club & Resort Business; after General Manager Chris-tian Thon saw the list of steps for a “Master Plan for Success” on the cover of that issue, he passed it around to his staff and said, “This is us!”)

The Vote That Counts
The PAH staff didn’t need a magazine article, of course, to validate its convictions about what it needed to do to ensure the club’s future success. In October of last year, it drew much more significant confirmation from the club’s membership, which approved, by more than a 2-to-1 margin, a $14.5 million clubhouse renovation program that would add 20,000 square feet of new facilities, and these attractions, to the club’s already impressive list of features:

A full-service exercise facility that would be, according to Thon, a “true fitness center, not just a room with equipment.”

A day spa that “no one else on the Peninsula will be able to match.”

An expansion to triple the size and seating capacity of PAH’s existing bar space, including the creation of a new casual grill and an outdoor patio with a brick fireplace. All of the improvements are designed to maximize the bar’s unique vantage point for breathtaking San Francisco views. “A lot of clubs emphasize views of their golf courses from their bars,” Thon notes. “But really, what kind of view can you get of a golf course at night, which is when much of your bar activity takes place? We see a great opportunity to really take advantage of our ability to let people see the city at that time.”

New private dining and meeting rooms, to accommodate groups of from 12 to 50 that cannot presently be handled easily at the club.

Pool improvements to deepen the existing pool, enlarge the Teen Room, add a toddler wading pool, improve the playground and poolside foodservice, and add more changing rooms, restrooms and terrace space.

Addition of another tennis court.

Creation of a new 25-space underground parking garage.

Resourceful use of the 800 truckloads (7,000 cubic yards) of displaced dirt from the construction, to renovate two golf course holes and expand PAH’s contoured driving range area, which also features panoramic views.

Taking Nothing for Granted
While Thon was gratified to secure a membership mandate for these plans, he and his staff aren’t assuming it will be a slamdunk from this point forward for the project, which, if all goes well, would begin this August and be completed in May 2008. Tricky approval processes with local governments still lie ahead (the modest profile of the PAH clubhouse is due to height restrictions imposed to preserve the view from the hills; the scrutiny for those kinds of aesthetic and environmental concerns has only become more intense since it was built).

 

Greens Supervisor Mike Garvale (above) is contemplating a conversion of the PAH course from poa to ryegrass, after successful tests showed potential for significant savings in water usage—an ever-growing concern in California (and a big bill for the club, to the tune of $400K/yr.).

So Thon is well aware that even with membership approval in hand, things can still happen. To remind him of the realities of master planning, he only has to look at the drawings in his office that were made in the mid-1990s for an improvement plan that is scarily similar to what PAH is now pursuing.

“We’ve had this vision before,” acknowledges Thon, who was originally with PAH as an Assistant GM from 1999-2003, and then returned as GM in mid-2004. “And it certainly would have cost a lot less if we’d done it the first time. We’re well aware that things can get picked apart, if not by your membership—as was the case the first time—then maybe by outside factors.”

If that starts to happen this time around, Thon has his priorities, and contingencies, in place. He has shaped the plan very conservatively, projecting only revenue from increased dues for existing members, plus a small number of new proprietary memberships. He hasn’t factored in any additional social memberships, even though he thinks that within five years, the new facilities could attract nearly triple the number of current members in that category. He hasn’t built in any growth in food and beverage. “I tried to stay away from anything that could look like guesswork,” he says. Yet the plan, at its most conservative, still anticipates a 10-year payoff.

Now that PAH members have given their blessing, Thon is devoting most of his considerable energies to making sure no detail gets overlooked while steering the approved plan into action. In the meantime, the rest of the PAH staff will continue to aggressively seek new efficiencies and business-building opportunities for the club’s current level of operation. Here’s an update on just some of the things they’re up to:

 

Course & Grounds—While he’s kept the poa on the PAH course lush through the 22 years he’s been the club’s Greens Superintendent, Mike Garvale is now taking careful, but serious, steps towards a possible conversion to ryegrass, after successful tests showed potential to save significantly in water costs—an ever-mounting concern in California (not to mention a huge expense for PAH, with its annual water bill of $400,000).

“It just takes so much water to keep the poa alive,” Garvale says. “In our tests, rye looks like it can be much heartier and deep-rooted here, and hold back water much better. It’s held up well even in the most severe heat, and has proved to be just as easy, if not easier, to maintain and keep looking good—nothing stripes like ryegrass.”

Golf Operations—Golf Professional Gary Bashford continues to build the club’s junior golf program, which didn’t exist when he came to PAH four years ago but now has 90 participants and three nationally ranked players. Bashford also is adding new stops for his ambitious program of golf-related trips that have taken him and different member groups (women, couples, etc.) to leading courses around the world (Thon, originally from Denmark, also leads member excursions to top skiing destinations).

One of Golf Professional Gary Bashford’s popular program of member trips was last year’s Couples Trip to Scotland (left), which included a stop on St Andrews’ Swilken Bridge.

“The head golf pro’s responsibilities have really changed in today’s club business,” Bashford says. “We need to do a lot more things now that don’t have to do strictly with golf, and that tie golf events to the other aspects of being a social club.”

 

Food & Beverage—Executive Chef Orlin Marcus, now enjoying new efficiencies from a carefully planned $1 million kitchen renovation that was completed last year, keeps a close watch on three levels of food costs that are followed to reflect the different parts of PAH’s F&B operations: member dining, member banquets and non-member banquets.

PAH has actively pursued outside banquet business for over 20 years, after the club prospered so much during the first Silicon Valley boom of the 1980s that profits exceeded the 15 percent threshhold for private clubs. “Once you go over the limit, getting back [to non-profit status] is pretty much impossible,” says Thon.

For “all intents and purposes,” he adds, PAH is still managed like a non-profit enterprise, but the club hasn’t been shy about taking advantage of its new status. Its ballroom was also renovated (for $2 million) last year, and the 350-person capacity space (including the dance floor) is now filled “nine out of 10 times” by non-member events, according to Thon.

“Members always get priority for their events,” he says. “But we don’t serve dinner in the dining room on Saturday, so we can focus our attention for those nights on banquets.

“Since we’re up here in the hills and [non-member banquet prospects] aren’t just going to drive by on their own, we actively advertise and promote ourselves as ‘the best-kept secret on the Peninsula,’ ” Thon adds. “When people search on the Internet for banquet sites, we’re the only country club that comes up; that really makes us stand out as an attractive choice among all the hotels. Right now, we’re booked 14 months out.”

Chef Marcus describes being able to make a profit on non-member banquets as an “anomaly” that certainly helps to reduce some of the stress normally associated with club F&B operations. But he resists the temptation to abuse the privilege, and makes sure his department doesn’t take its focus off their primary reason for being.

“We don’t ever want to get to a level of outside activity that interferes with ensuring a positive experience for the members,” Marcus says. Certainly, there is no skimping on details, or quality, for regular member dining or member events (see photos above; the elaborate banquet spread shown was just one of several different meal events prepared for a members’ ladies golf invitational).

 

Member Events—While each PAH department continues to make independent contributions to the club’s success and progress, the team’s most shining moments are when they all come together for one of the creative events the club now stages regularly on its golf course. From petting zoos to “Hot Rods on the Hill” car shows to Halloween fright nights (when staff members operate remote-controlled rats, snakes and ghosts and scramble up trees to throw things down at their “victims”), PAH now has a variety of regular events that each attract hundreds of members and guests, and it’s adding new ones all the time.

 

Membership Director Kathy Sanders touts PAH’s regular on-course events, including petting zoos and campouts.

The staging for these events is by no means simple (many involve live music or big-screen outdoor movies), and the food and beverage service is hardly limited to box lunches and soda or beer from a cooler (local wineries set up elaborate bars inside Rolls-Royce buses for the popular Hot Rods show).

“They’re an enormous amount of work, and with all the staff time that’s involved, they’re not all that profitable,” says Thon. “But they are a great way for members to show off our club to friends who might otherwise only see our dining room. They help make our members become our best salespeople.”

 

Executive Chef Orlin Marcus spares no effort, or detail, for banquet fare (TOP RIGHT) or individual dishes. (For recipes for Day Boat Sea Scallop Napoleon (BOTTOM LEFT) and Rotie de Foie Gras et Courgette Grillée (BOTTOMRIGHT)

Membership Director Kathy Sanders, who took the position two years ago, says she has clearly seen the positive effect of these activities in positioning Palo Alto Hills at the front of the chase for the “family-friendly” grail that every club is now pursuing.

“From one camping event alone, I got five [new member] referrals,” she reports. “In addition to what we’ve done to breathe life into our tennis and junior golf and swim team programs, [these events] are clearly what make us be seen as truly friendly and family-oriented.”

Just Like Me and You
Partly because of his affability, and partly because he’s keenly interested in hearing about ideas that are working for other clubs, Christian Thon, even with all that’s now on his plate, is never too busy to talk with other managers in the industry, no matter what type of club they work for or where they might be located. And when he does, he often hears the suggestion that he has it easier from his perch at the higher end of the initiation-fee scale. “It’s funny how many [club managers] don’t realize that it’s just as competitive ‘up here,’” Thon laughs. “Maybe even more so, because of the expectations that come with being able to join clubs like this.

“Certainly, there are other excellent clubs that we’re competing with here on the Peninsula, some with higher fees than ours,” Thon adds. “But even at this level, it’s still going to come down to providing good value and the facilities, activities and services that make people comfortable and happy. And that make them see you as an important destination that they want to go to as a regular part of their lives.” C&RB