A local pipefitters union acquired Hillcrest Golf Club in St. Paul, Minn. for $4.3 million in early February, an amount higher than the asking price.
"They've kept a very pristine course with a limited budget," Gary Erlander, business manager for the Steamfitters Pipefitters Local 455 told the Star-Tribune. "We've been saving money for a long time to own something."
The 112-acre club, which includes an 18-hole course and a recently renovated clubhouse, is located in an inner city area near one of the region's most prestigious schools. Frank Jermusek, president of Grubb & Ellis/Northco Golf & Resort Services Group which handled the sale, said that although the course was profitable, the price was based on the value of the real estate.
"You might ask, 'what is a union doing paying this money for a golf course,'" he said. "But if the golf course did go sour, they can sell it in a few years and recoup their investment on the land."
Jermusek said the course went on the market in August for $4.2 million, and garnered 15 offers. Some of the offers were from home builders looking to turn the property into housing. The club chose the union's offer because it pledged to keep it a private club for two years, and to retain staff.
Membership has dropped from 240 to 200 at the club, which was founded in 1921 as a Jewish country club. It’s no longer exclusively Jewish.
"The club has a positive EBITDA number," Jermusek said. "But it had debt service behind it from the clubhouse renovation and the membership trend was headed in the wrong direction. It just needed some money behind it to get the membership back up."
The union has 1,426 members, many of whom play golf. It plans to relocate its offices at the club, and to use its business contacts to sign up new members. This is not the first club owned by a union. The pipefitters union in St. Louis also owns a golf course.
Jermusek said his company is handling sales for several golf courses and resorts across the Midwest. He has around 20 openly listed, 10 to 20 that are available but not openly listed, and expects another 20 to hit the market in the next six months.