Editorial Submitted by Mike Doscher Camas Ct
There was a recent posting on the Wildwood Association website authored by the Liaison to the Clubhouse Committee regarding the Clubhouse subsidy. I am sure many people didn’t see this article (full text below). If you are engaged or even just following the Clubhouse rebuild or replace discussions, you need to understand the implications of the food and beverage service model. It is a strategic cornerstone for planning any major investment in this facility. There are some important facts in this document and some misleading information that requires elaboration. As the article clearly states we are subsidizing the food and beverage operation. Said another way, we own a restaurant that looses $200,000 a year and each of us chips in about $70 a year to keep it afloat. It should be no surprise that the bar does not lose money. We are not a country club where the members must spend money at the clubhouse as part of the membership. With our Association rules and the financial impact on the members this situation is not likely to change. Our restaurant must compete with outside alternatives to serve the dining needs of our residents. However, our current business model does not allow the restaurant to compete for patrons from residents outside the gate. This limits the market and demand for our facility. Think of your own dining habits and you will agree that a variety of food styles, pricing, and ambiance is more appealing than going to the same place for your dining needs. We have a built in market demand problem and the results are clear in the article. What is misleading in the article is the notion that we can’t open our facility for outside use. That is not correct. Our corporate structure and tax status for the Clubhouse area could be changed and the impact on individual members would be minimal. Looking for outside demand to help support our food service facility is a reasonable alternative that could be pursued. Remember that doing nothing different is a decision and that has been the strategy for some time. In fact, the design requirements the Board has given the architects bidding on doing the new Clubhouse plans asks for 25% more capacity in the dining room. The implied assumption, supported by this Association article, is that the current service model will be used and the subsidy will “hopefully” improve, with a new building and parking. If it doesn’t improve the implication is that the members are willing to subsidize the risk of an even larger facility. Is that true?
Planning for a major investment in our Clubhouse must open the discussion on our food service business model. We have no obligation to manage a full service dining facility so the option of moving away from that service model is a reasonable option. Many believe that a move to a service model more aligned with the major users of the Clubhouse would lower cost and increase demand. The notion of a bar grill operation has been on the table for many years. Doing away with full service dining, moving to a bar grill model, opening to outside patrons, or any other service model would have a major impact on the design of a remodeled or rebuilt Clubhouse. This brings us to the cornerstone issue….Wouldn’t you want to agree on the food service model before you start paying an architect to draw plans? The article basically says don’t worry about it, but it sounds like the same old plan for subsidy, only on a potentially larger scale. Please share your views on Wildwood Interactive (lwwa.net).
Our Restaurant and “The” Subsidy (Copied from the Lake Wildwood Association website)
Homeowners Associations often choose to support a restaurant as an amenity available to all residents by assessing themselves in the form of a subsidy. While we can hope to reduce our subsidy, it is likely that we will always need to subsidize any restaurant within the gates. Our present subsidy for our clubhouse restaurant is approximately $200,000, or about $70 of the $1624 that we pay for our annual homeowners’ dues. The restaurant subsidy has increased considerably since FY 2002/2003.
Efforts by the staff and the Board to solve this daunting shortfall in revenue have included hiring a parade of managers, study by a Hospitality Committee, and advice from a consultant. Prime issues have been quality of service and consistency of meals. With the hiring of our current restaurant manager, service has improved, the quality of meals is better and more consistent and controls are in place to reduce costs.
However, the fact remains that the restaurant is not supported by a majority of residents.
Increasing patronage, easier access to the restaurant, a business plan for the restaurant that is suited to our community, marketing efforts, and hopefully a more robust economy may contribute to more revenue and less subsidy. As we look at what needs to be done to our current clubhouse facility, current usage data will be a consideration as we evaluate various options and adequate sizing. Options not open to our Association are assessing a monthly fee or open the gates to non-residents to compete with outside the gate restaurants.