At this time six years ago, the future of historic Dye’s Walk Country Club was, at best, uncertain.
Rising debt, declining membership and a soft economy threatened the existence of the landmark golf course in Greenwood, notable for the Pete and Alice Dye design of nine of its 18 holes.
With $4.6 million of debt and no new revenue sources on the horizon, the privately-owned club filed for bankruptcy in 2011. The goal of the Chapter 11 reorganization was to attract a deep-pocketed buyer and save the private course, established in 1961, from folding.
But within a year of the filing, there was little or no investor interest.
So Dye’s Walk membership, what was left of it, explored a different avenue for survival: Not-for-profit restructuring.
In December 2011, under the leadership of board of directors president Mike Abdalla, and with the blessing of virtually all members, Dye’s Walk filed to become a 501 (C) (7) not-for-profit entity, making the club a member-owned, tax-exempt facility. Under specific conditions, the IRS permits social and recreational organizations, such as country clubs, hobby clubs, and hunting and fishing clubs, to operate as not-for-profits.
Dye’s Walk membership, which hired a Kansas City-based consulting firm to weigh the merits of becoming a not-for-profit, expected the process to take up to three years. But it took less than one.
On March 1, 2012, Dye’s Walk emerged from bankruptcy as a not-for-profit and has seen its membership nearly double from its 2010 dip of below 200.
Today, the club has about 300 members, and is growing. It expects to cap membership at 350, then establish a waiting list that used to be the norm for the 18-hole country club. Memberships range from $258 a month for single members to $320 monthly for families.
“Long-term, dedicated members to the club wanted to see this place succeed and survive, and so they supported the idea of it becoming member-owned,” said Abdalla, a long-time member who spearheaded the effort. “I’m very pleased, and the members in general are very pleased, because the only focus that we now have is on our members and on our golf course.”
Under the not-for-profit structuring, per IRS guidelines, the club must be supported primarily by internal revenue sources, such as membership fees, dues and assessments. Not more than 35 percent of revenue can come from outside sources, such as golf outings, and it cannot acquire income by selling commercial goods or services to the public.
As owners, all members have a vote in all decisions, and no one earns a paycheck. All monies are invested in the club — a system that has allowed Dye’s Walk to invest $400,000 in capital improvements and chip away at the $2.5 million debt that remained on the books in 2011.
Today, the debt is $2 million.
“It brought stability back to the course,” club treasurer Larry Davis said. “If you’re going to be a member here, you have a say in it as a member, through the board of directors, through the committee structure.
“There’s no profit motive. There’s nobody taking salaries. Every dollar that the club earns goes into the club.”
As a result, Dye’s Walk has made numerous upgrades to the course and other facilities, such as the parking lot and kitchen, that were largely neglected under private ownership.
With profit no longer the objective, the course became the focus. A new irrigation system, new pumps, tee and bunker renovations, tree removal, a new drainage system and lights installed in the parking lots are among the recent upgrades.
Moreover, efforts to keep the course plush and manicured have been greatly enhanced.
“I would say leaps and bounds, it’s a full turn around from what it was three or years ago,” said Kyle Baumann, the club’s director of golf and general manager.
“The overall aesthetic value of the course has changed.
“We’ve added some bridges and we’ve added some very attractive plantings around the course, along with different maintenance practices that have actually improved the overall turf.”
Established in 1961 as El Dorado Country Club, the course — located at 2080 S. State Road 135 — was originally built as a nine-hole course. It has the distinction of being the first ever designed by world-renowned course designers Pete and Alice Dye.
Today, the Dye-designed holes are Nos. 10 through 18. The second nine holes were added in the early 1970s by Indianapolis course designer Gary Kern.
The Dyes had relocated to Florida by that time and were not involved in the addition.
In 1987, the name was changed to Royal Oak Country Club. In 2007, the name changed to Dye’s Walk after long-time owner Ron West sold the course to area residents Brian Benham and Rich Riley.
At the time of the sale, Dye’s Walk had about 315 members. But a sharp downturn in the economy, coupled with golf’s nationwide slump that continues to this day, ultimately led to the bankruptcy filing.
In 2011, membership slipped to 215.
“The previous owners were great people, but they weren’t golf operators. The unfortunate thing is, they had never run a golf course or a golf business before, so it was a little different for them having to deal with it from the standpoint of business,” Abdalla said.
“And the other thing that went against them was the timing. The timing was just bad to take over an operation like that.
“They had all of the intentions of doing great things for the area and for the club. It just didn’t happen for them because of the recession.”
But with the not-for-profit restructuring, members are optimistic about the future — and are relieved to have saved what they regard as a historic treasure with the Dye design.
“There was that fear in the beginning that it would be gone and become apartments or something like that,” said Dan Glass, a club member since 1978. “It’s been such a long-standing landmark.”
Like virtually all of Dye’s Walk members, Glass supported member-ownership when the board of directors put it up for a vote. The tally was 212 in favor and only four against.
“I don’t know of anybody who’s not too happy about it,” Glass said of the benefits. “They’ve been able to maintain and upgrade the golf course and add to the services rather than take away.”
Dye’s Walk’s new structure is not unique.
Although the Indiana Golf Office doesn’t track course ownership, executive director Mike David cited a number in Indiana that are member-owned. Crooked Stick Golf Club in Carmel, Harrison Lake Country Club in Columbus and Anderson Country Club in Anderson are among the examples.
Dye’s Walk just happens to be among the latest.
With annual revenues of $1.4 million and membership on the rise, club leaders are confident the not-for-profit model will eventually clear debt and rekindle the social and recreational opportunities that have been hallmarks of the landmark course.
“There’s no conflict of interest at this point. The members own it, and the members dictate what goes on,” Abdalla said.
“They have control of their destiny as opposed to having someone else dictate what we want to do. The members are in charge.
“This is our entertainment. This is our Disney World.”
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What is a 501 (c) (7) not-for-profit?
To to qualify for tax-exempt status and operate as a not-for-for profit, clubs must be “organized for pleasure, recreation and other non-profitable
purposes.”
EXAMPLES OF TAX EXEMPT SOCIAL AND RECREATIONAL CLUBS
College social/academic fraternities and sororities
Country clubs
Amateur hunting, fishing, tennis, swimming and other sport clubs
Dinner clubs that provide a meeting place library, and dining room for members
Variety clubs
Hobby clubs
Homeowners or community associations whose primary function is to own and maintain recreational areas and facilities
Source: IRS
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ABOUT DYE’S WALK COUNTRY CLUB
Located at 2080 S. State Road 135 in Greenwood, Dye’s Walk is full-service private country club with an 18-hole Par 71 golf course.
Established in 1961 under the name El Dorado Country Club, golf course is notable because hole Nos. 10 through 18 were designed by world-renowned course architects Pete and Alice Dye.
In the early 1970s, a second nine holes were designed by Gary Kern.
In 2007, the name was changed to Dye’s Walk Country Club
In 1987, the name was changed to Royal Oak Country Club.
Dye’s Walk has about 300 members and will cap membership at 350.
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