Midwest Ethics & Bold Plan Make Rio Verde Country Club “Home, Sweet Home”

Rio Verde, AZ – The likelihood of a near-global economic collapse in 2006 was the furthest thing from their minds when Rio Verde Country Club’s membership voted to retain Tom Lehman and his design team to renovate its two 18-hole championship courses. The cost, estimated at a hefty $6 million, would revitalize the club’s 36 parkland-style fairways and greens over a three-year period.

With a loan negotiated with Wisconsin-based Johnson Bank, the project was launched amid enthusiastic expectations of the community’s nearly 500 avid golfers. The Club’s plan was solid, use new member initiation fees to eliminate the bank debt. It worked great for about a year, but by the summer of 2008, new memberships had all but evaporated and servicing the bank debt necessitated drawing down the club’s reserve funds. By summer 2010, the Rio Verde’s Board of Directors, realizing the club was nearing a financial precipice, looked at every reasonable option – along with a few radical ones – to resolve its debt obligations. One idea, which was promptly dismissed, would constitute a full-scale membership assessment. But with mounting bank interest and principal payments nearing $1 million, hemorrhaging club reserves and no imminent resurgence of new memberships, time was not on their side.

The Board had to come up with a timely, workable plan to honor its fiduciary commitment, not just to its members, but to the Rio Verde community at large. It was a tall order because if the golf course failed, it would send shock waves throughout the entire community, demoralizing residents and further depressing property values.

That’s when the Club’s members got creative. Board President Arillus Holcomb developed a bold new plan called the Patron’s Program. Then he sought the endorsement of his peers, influential Rio Verde residents, whose support was necessary if it was to succeed.

As Holcomb began to make his pitch, he had an ace in the hole. He knew the Rio Verde members were folks who migrated to Arizona from the cultural crossroads of the Midwest, where a handshake remains a time-honored custom. He also knew there was never any doubt among the membership the bank loan should eventually be repaid in full. To the members, the club’s loan agreement represented a moral obligation, one to be honored come hell or high water. And even though other financially-challenged clubs were walking away from debt obligations, Rio Verde Country Club absolutely would not.

But what most envisioned as a marathon turned into a sprint as details of the Patron Program were disclosed. For openers, the fund-raising campaign would be totally voluntary, and to the surprise of many, conducted within a 90-day timeframe with a December 31, 2010 deadline.

Once the program was launched, Holcomb and his solicitation team created a full-blown communications campaign with military precision and all the positive earmarks of a multi-level marketing enterprise. In the process, early Patrons were converted to willing solicitors while neighbor-to-neighbor discussions propelled the initiative.

The Patron Program sought voluntary member contributions of $100,000 (Premium), $50,000 (Gold) or $25,000 (Silver). In return, Patrons were extended prepaid club credits for golf shop purchases, cart fees, dining room charges, catered events, entry fees for major invitational tournaments and other club amenities. At each contribution level, $15,000 represented an outright member gift to the club with the balance available as club credits.

In the final days of the fund-raising effort, a companion initiative, the Tee-To-Green campaign, generated an additional $860,000 in gifts from current and former members as well as non-golfing Rio Verde residents. It was the blending of both resources that retired the debt obligation.

The success of the Patron and Tee-To-Green campaigns not only eliminated the $5.6 million bank debt, sidestepped a crippling member assessment and protected home values; it also saved the club at least $5 million in interest charges.

The program succeeded because Rio Verde is remarkably blessed with abundant human talent, resources and creative thinkers. It is a community with an uncommon blend of sophistication and small-town intimacy that attracts residents like Arillus Holcomb, who choose not only to live and play there, but to step up and work hard to solve problems.

Today, Rio Verde boasts two exceptional championship golf courses totally renovated and absolutely free of long-term debt. It remains one of Arizona’s premier destinations for active adults whose passion for life, fellowship, golf and love of the area’s natural resources is first and foremost. While its scenic location remains its engine, it is the game of golf that drives it. And it is the innovative and creative thinking of its members that keeps it “home, sweet home”.

Learn more about Rio Verde Country Club at www.rioverdecc.com