C LU B Carmel Country Club

Strategic PlanOctober 2006

Strategic Plan�

1

Dear Fellow Member:

In 2003, the Board of Directors appointed a Strategic Planning Committee to begin the process of evaluating our Club’s current position and identifying the types of projects that will need to be done in the future to ensure our continued success. After several years of taking steps to strengthen our Club and its financial position, the Board felt it was the right time to develop a longer-term view for our Club. This booklet is a report on the findings of that effort and our recommendations for the future.

Carmel Country Club made great strides during the �990’s, especially after the implementation of the Facilities Improvement Program in �997. The purpose of this Strategic Plan is to build upon that success. We believe it will assure that we keep our Club current with member lifestyle preferences and remain a club of choice in the competitive landscape. Our Club is doing extremely well today, and the focus now is to plan for the future with the intention of guiding Carmel’s growth in an organized and cost effective manner.

This booklet includes background on the process used to develop the plan. It also includes recommendations for facility improvements and a financial plan to address both these projects, our annual maintenance and repair requirements. The Finance Committee has developed a plan that shows how the improvements can be implemented without an assessment or capital dues charge for our existing members. The plan also includes a system of checks and balances so that we can maintain our financial footing throughout the process in response to internal or external changes that may arise.

Carmel Country Club continues to be recognized by our members and outside experts as one of the finest country clubs in America. The Board of Directors and the Strategic Planning Committee endorses the recommendations included in this proposal as a clear strategy for Carmel to continue to enjoy the position for many years.

Yours truly,

Craig RadkePresident

Carmel Country Club

Strategic Plan

2

STRATEGIC PLANNING BACKGROUND

Background

In order to prepare the Club for development of the Strategic Plan, the Board and management team first focused on getting our operations and finances under control. This included developing an operating plan that would continue to provide a quality experience to our members while delivering a break-even financial performance. This plan was highly successful. It resulted in greatly improved cash flow, which led, in turn, to a reduction in the Club’s long-term debt. When this process began in 2003, our long-term debt stood at around $7 million. This was reduced to about $1.7 million by July of 2006.

With our operations and finances under control, the Board asked the Strategic Planning Committee to collect various pieces of data to objectively evaluate our position and assess our future goals and needs. This included studying population demographics for our area to identify the potential for attracting a steady supply of new members into our Club. The Committee also conducted several series of focus groups to gain a thorough understanding of member attitudes toward the Club and the membership experience. Finally, the Committee met with the standing committees and key staff of the Club to identify opportunities to improve existing facilities and address future needs of each operating department.

With a good understanding of our external and internal environments and our relative strengths and weaknesses, the Committee developed a written program identifying the Club’s vision for the future, goals for improvement and future facility requirements. This study was the starting point for the facility planning teams and design professionals as they began to prepare a conceptual master plan. Once the master plan was prepared, the Finance Committee was able to develop a financial master plan. All plans and illustrations in this booklet are conceptual drawings and subject to further refinements.

Strategic Plan3

Trends in the Private Club Marketplace

Private clubs are social organizations that must respond to the lifestyle trends and competitive dynamics of the world around them if they are going to attract and retain members. Today’s country clubs are challenged to offer a membership with high perceived value to prospective members due to the changing ways in which people live and work, and the numerous and growing alternatives people have for expending their recreational time and money, especially the number and quality of available golf courses.

The key external influences affecting country clubs include the continued growth in the availability of high-quality, daily fee golf courses and a demographic environment that positions the Baby Boom generation as the prime target for club membership. As they age, the Boomers are acting differently than their parents and continue to exhibit an ever-increasing emphasis on diverse, active, casual and healthy lifestyles. Private clubs must respond to these market forces if they are going to thrive and grow.

As to golf course availability, despite the fact there exists in the United States approximately the same number of golfers today as there was in �990, literally thousands of new courses have been built since then. This sustained emphasis on course development has increased the supply of places to play golf by nearly 30%, with almost all of this increase coming in the high-end sector that provides golfers the “country club

for a day” experience. These courses are real alternatives to club memberships, and they successfully siphon prospective members from the available pool of people looking to join a private club.

In order to have the greatest chance of sustained success in this world of options, country clubs must provide an excellent golf experience along with up-to-date recreational and social facilities and events that are in tune with current tastes. Offering a variety of activities and services, in addition to the key dining and golf offerings, is a strategic response to the greater emphasis members and prospective members now place on these once less important areas. Facilities and programs that are driving growth in the country club segment include health and fitness facilities and programs, spa services, resort style swim complexes, expansive tennis facilities, casual social functions, as well as a variety of family and children’s activities.

If a private country club is going to remain a vital part of our society in the future, it must offer its members a quality experience in multiple social and recreational activity areas, have creative programs that facilitate the growth and development of social capital and adopt usage policies that reflect the modern ethos of society.

STRATEGIC PLANNING - CLUB TRENDS

Carmel Country Club

Strategic Plan

�

Carmel’s Vision

After many lengthy discussions and various attempts at capturing our vision in writing, the Committee agreed on the following statement of purpose:

Vision Statement

“An ongoing pursuit of excellence in facilities, programs and member service where golf, dining, wellness, swimming and tennis combine to make Carmel a place for fellowship and the club of choice for families in Greater Charlotte.”

We know you will agree that this statement well captures the essence and objectives of Carmel. We have a great history and many fine traditions that we want to preserve, but we also need to continue to advance our Club to meet the changing lifestyles of members and prospective members.

The Vision Statement and Strategic Plan guide our Club and its management in a variety of areas. To the right are some of the specific goals excerpted from this program that were used to guide the various committees as they evaluated the strengths and weaknesses of their respective departments:

Club Goals

Full-Service and Family-Oriented Club: Offer a complete membership experience by providing facilities for social and recreational activities desired by the membership.Great Golf: Have two of the top rated golf courses in North Carolina along with high-quality golf practice facilities.Invite Usage and Encourage Participation: Organize the site to promote interaction among activity users and integrate the facilities with the beautiful natural setting.Clubhouse as Activity Center: Create a clubhouse that promotes fellowship and serves as a stimulus for social interactions among the members and their guests.Health and Wellness: Provide quality health and wellness facilities and programs. Family Recreational Complex: Attract families by providing an excellent pool complex, tennis courts and other recreational facilities.

We believe the combined effect of top level golf and excellent facilities and programs for family-oriented social and recreational interests will allow Carmel to offer a high value membership and maintain a sound financial structure.

•

•

•

•

•

•

CARMEL’S VISION

Strategic Plan�

Swimming, Tennis and Landscaping

The Club has worked with LandDesign Incorporated to develop the master plan for the pool complex, tennis area and the clubhouse site. LandDesign specializes in this type of work and they have prepared an exciting plan for these areas of the club.

Pools

The existing pool complex at Carmel Country Club is a rather typical country club setting whose main utility is to serve as a venue for a swim team. As noted previously, younger members place much greater weight on these aspects of the Club, as they contemplate joining. There is also a need to expand the use to more groups than families with young children. These goals are achievable through this well-conceived plan.

The recommendation for the pool area includes:

Rebuilding the pools and decks to create a livelier and diverse swim complex. Develop a resort feel for all swim facilities.This will augment the traditional competition capability with additional pools for different uses.New, covered dining area and building a bar near the adult pool to provide entertainment options for all members.

The conceptual images of the following pages show the proposed changes to our pool complex.

•

••

•

POOL, TENNIS & SITE IMPROVEMENTS

Carmel Country Club

Strategic Plan

6

Existing Tennis and Swim CenterCovered dining additionEntry pavilionCompetition poolSlide tower and waterslidesChildren’s poolResort poolBar/lounge

�.

2.3.�.�.6.7.8.

�

3

�

6

�

7

8

POOL COMPLEX PLAN

2

Strategic Plan7

CHILDREN’S POOL PLAN

Slide tower (2�.� feet above pool)Entrance to grillCabana/trellis structureTrellisWater slide plunge poolWater slides (one open slide and one tubular)Children’s zero-entry pool with splash featuresDiagram of proposed water slides

�.

2.3.�.�.6.

7.

8.

�6

�

7

��

�

8

2

3

Carmel Country Club

Strategic Plan

8

Covered dining additionAccess rampEntry pavilionOne-meter diving boardStarting blocks located on this endSeat bench

�.2.3.�.�.

6.

�2

3

�

�

6

COMPETITION POOL PLAN

Strategic Plan9

RESORT POOL PLAN

� 8

7

7

7

6

�

�

3

2

Cabana/trellisSeat bench with water jetsPlanter/grotto/waterfallChaise lounges in waterOutdoor bar seatingBar/loungeCabanasFire pit

�.2.3.�.�.6.7.8.

Carmel Country Club

Strategic Plan

�0

Gateway Entry View

Bar/Lounge Overlooking Resort Pool

POOL COMPLEX RENDERINGS

Strategic Plan��

TENNIS IMPROVEMENTS

Carmel Tennis

The tennis area does not have an integrated look and feel while the viewing areas are quite limited. The former tennis pro shop remains in place, but it is unused. In order to improve upon this situation, the plan recommends landscaping the entire tennis complex, removing the former tennis building and re-working the hillside below this location into a grass-covered viewing amphitheater. This will not only add beauty to the area, but will also allow parents to watch matches.

3

�

�

�3

2

Tennis and swim centerViewing area and pavilionNew tennis courtViewing areaViewing area and pavilion

�.2.3.�.�.

Tennis Viewing Area

�

Carmel Country Club

Strategic Plan

�2

The lack of defined pathways, entrances and activity areas on the golf side of the clubhouse does not have an appropriate appearance for such an important part of our operation, nor does it encourage golfers to use the clubhouse before and after their rounds.

The plan suggests creating an elegant arrival to the golf facilities by constructing a new bag drop, a starter area and a walkway at the golfer’s parking area. This plan will also revise the cart queuing to provide more area and create an improved look and feel, while also providing screening to reduce the visibility of the cart cleaning and bag storage areas of this facility. The potential development of an event lawn to the rear of the clubhouse and bringing cart circulation up to the building will invite use of the clubhouse after golf.

SITE IMPROVEMENTS

Practice putting greenEvent lawnCart staging and starter area�8th green on North CourseParking lot with �0 additional spacesPractice greenRelocated �8th greenCongregation areaBag drop-off area

�.2.3.�.�.6.7.8.9.

7

�

8

23

� �

6

9

Strategic Plan�3

Course Improvements

There are four components to our golf courses that need attention:

Continual upgrade of the North Course;Adding a Greens & Grounds personnel building;The McAlpine Creek sewer project;Investigate options for rebuilding the South Course.

North Course Upgrades

The Club will continue to upgrade the North Course to provide members the quality of course they have come to expect. Some of the improvements include:

Adding stone covered walls surrounding ponds;Updating tee boxes, greens and fairway complexes;Extending and expanding holes;Adding drainage and landscape improvements.

New Personnel Building

Currently, the Club does not have adequate facilities for the greens and grounds staff. So, a new building will be added to the existing Greens & Grounds complex. The staff will have adequate locker, restroom and office spaces.

••••

••••

GOLF COURSE IMPROVEMENTS

Sewer Project

Projected for 2008 is the arrival of the sewer line that expands the capacity at the McAlpine Creek Sewer Treatment Plan. This new line will be over 20 feet underground and run parallel to the existing sewer pipe system. The total length across Carmel’s property is close to 7,200 yards. The holes that will be affected the most include holes #3, 7, �2 and �7 on the South Course and holes #6 and 13 on the North Course. This is work that must be done and it will create significant disruption whenever it occurs. Therefore, this project provides the Club a great opportunity to make improvements to the South Course. The entire sewer project should take nine months to complete.

Carmel Country Club

Strategic Plan

��

GOLF COURSE IMPROVEMENTS

South Course Plan

We are pleased that we have been fortunate to gain a commitment from Rees Jones to develop the Master Plan for the South Course. Mr. Jones, son of legendary golf course architect Robert Trent Jones Sr., has gone on to establish himself as one of the premier golf course architects in the world.

Important to note is that most of the factors that create good golf course conditions lie beneath the ground and out of view. This infrastructure ages over time and periodically has to be updated. Below is a table prepared jointly by the USGA, Golf Course Builders Association, Professional Golfers Association and other leading authorities in the golf industry that shows the expected life cycle of golf course features.

Golf Course Element Life ExpectancyGreens 15-30 yearsBunker Sand 5-7 yearsIrrigation 10-30 yearsPump Station 15-20 yearsCart Paths (asphalt) 5-10 yearsCart Paths (concrete) 15-30 yearsPractice Range Tees 15-20 yearsBunker Drainage 5-10 yearsMulch 1-3 years

As you can see, most of the major elements of a golf course have a life cycle of about 20 years, which is the time period of

our last major course project. While some elements like greens and irrigation have the potential to last longer, this depends on the quality of the initial construction.

Rees Jones’ plan works to preserve the existing traditional elements of the property while also reconfiguring it to become a more modern course. As Carmel has an excellent canvas to work with, new components will only enhance the play of golf. The plan will make use of surrounding natural terrain and elements wherever possible. The availability of excess land surrounding the course allows for the lengthening of the course to current championship standards. Other details that will transform the course include new styles of grass that are more aesthetically pleasing, as well as have more definition and better playability.

Working from the tee boxes to the greens, all aspects of the course will be improved to provide members that exceptional golfing experience that they deserve. The routing plan on the following page shows the conceptual layout of the South Course.

Summary

Since we will be experiencing a major disruption of golf play due to the pending sewer project, this is an opportune time to address the problems that exist while preparing the course for 2�st century play. The new South Course Plan will solve the present issues that exist on the course and, most importantly, fulfill the expectations of our members by maintaining our status as one of the premier golf courses in the area. The goal of Carmel is to have two of the top rated courses in North Carolina.

Strategic Plan��

SOUTH COURSE MASTER PLAN

SCORECARDHOLE YARDS PAR HOLE YARDS PAR

1 540 5 10 440 42 400 4 11 380 43 460 4 12 195 34 575 5 13 485 45 180 3 14 440 46 455 4 15 460 47 185 3 16 550 58 560 5 17 200 39 360 4 18 470 4

OUT 3715 37 IN 3620 35

CHAMPIONSHIPOUT 3715 37

TOTAL 7335 72

Carmel Country Club

Strategic Plan

16

Clubhouse

The primary focus of the long-range plan for the clubhouse facility will be to address emerging needs in the original portion of the clubhouse and to make some adjustments to the member dining room and fitness area, and to consider adding spa facilities in the portion of the building constructed in �997.

The work being considered in the older section of the clubhouse could include renovating and updating the main entrance to promote better circulation and the first impression upon entering the Club. This interior restoration would continue into areas like the ballroom, and smaller private dining and meeting rooms. A potential area of major renovation in this section of the clubhouse would be to renovate and expand the Terrace Room to increase the use of this space. This room has been a bit of a missed opportunity for the Club over the years as it offers a wonderful view to the outside, but it is difficult to access this area and the long, narrow configuration limits its usefulness. The plan contemplates a new circulation corridor to this room, expansion toward the golf course and access to a new exterior terrace. The expanded Terrace Room could serve as a location for private functions, pre-function activities for large ballroom affairs and occasional member formal dining events.

In the newer section of the upper level, we would see converting the East Room into a Wine Room available for spotlight a la carte events, member special events and private affairs. The

Committee also sees a need to provide greater separation and more architectural detailing in the Mixed Grill wing to provide a more intimate setting and create opportunities to separate the space for different user groups, such as adults and families, or casual dress from informal attire.

On the lower level of the clubhouse, the Committee has recommended a renovation of the Men’s Locker Room including refurbishment of the restroom facilities and showers. If the Terrace Room is expanded as described above, this would also create potential expansion space on the lower level, where we could consider creating a new co-ed Golfer’s Grill with easy access to the revamped exterior cart and walkways, and redevelopment of the Men’s Grill into a more useful and attractive space.

Finally, the plan projects a need to expand our fitness facility to provide more space for stretching and equipment. This could be accomplished by moving the juice bar to the new Golfer’s Grill, opening up this space for use by the fitness department. The lightly used lounge area of the Ladies’ Locker Room is also being reviewed as a potential location to house several day spa treatment rooms. A locker room lounge would be maintained, of course, but in a smaller configuration than at present.

A list of challenges that were identified by the Committee for the exiting facilities appears on the following page, and preliminary “bubble diagrams” showing how and where the potential changes

CLUBHOUSE ISSUES

Strategic Plan�7

CLUBHOUSE ISSUES

that are being considered could be effected appear on the following pages. These solutions may change as additional study is completed, but they are reflective of the direction that the clubhouse may take in the future.

An analysis of the clubhouse identified the following issues:

Main Entrance Lobby: This space is somewhat under-sized in relationship to the main clubhouse spaces. There is no receptionist to control access or direct guests and the general appearance is not in balance with the Club.Function Wing: Interior appearance of the Ballroom, Pre-function Living Room and Private Dining Rooms are becoming dated.Terrace Room: This room has long been underutilized, which is a missed opportunity for the membership considering its highly visible location and excellent view. The need to pass through other rooms to access this area, the long, narrow configuration and the lack of access to the outdoors are seen as contributing factors to this situation.East Room: This room is viewed by most members as an inappropriate formal dining environment because of its lack of view and location in the clubhouse.Outdoor Terrace: There is only a small outside terrace on the golf course side of the clubhouse. Grill Room: Limited separation and distinction between the various rooms.

•

•

•

•

•

•

Casual Lounge: Lack of casual, coed gathering space for golfers on the lower level. Men’s Grill: The Men’s Grill is long and narrow. It is a lightly used space.Men’s Locker Room: The Men’s Locker Room is tired and dark.Fitness: The fitness area can be crowded at times, and the equipment needs to be continually updated to provide the latest technology. Spa Facilities: There are no spa facilities.

•

•

•

•

•

New Family Grill Room

Carmel Country Club

Strategic Plan

�8

UPPER FLOOR MASTER PLAN

Highlights

Expanded Terrace RoomNew Wine Room (was East/Gold Room)Mixed Grill updatedBetter separation between banquets/events and member dining

••

••

Strategic Plan�9

LOWER FLOOR MASTER PLAN

Highlights

Men’s Locker Room renovatedPotential expansion space provided due to enlarged Terrace Room aboveFitness facility expanded

•

•

•

Carmel Country Club

Strategic Plan

20

Financial Plan

Carmel Country Club is in excellent financial condition today.Currently, the membership turnover rate at the Club is 60 per year. Meaning, we need that many new members every year to stay even. Implementing this plan will be a major factor in bringing more people into the Club.The following charts show the changes in membership that have taken place over the past �3 years.

•

•

•

FINANCIAL PLAN

Number of Total Members from 1994-2006

Number of New Members Joining from 1994-2006

NOTE: Prior to the year 2000, the Club tracked only the total number and not by classification.

Strategic Plan2�

The estimated cost, in ranges for the various projects, included in the master plan is:

Golf ........................................................$6 to 8 millionClubhouse ..............................................$4 to 6 millionPool Complex.........................................$3 to 4 million

This is the projected cost for all aspects of these projects.

Assumptions

Past performance indicates that a debt level of $10 million or less is prudent for our Club. Therefore, the debt level during the ten-year time period that constitutes this planning window never exceeds this level. We have assumed a straight-line interest expense of 7% throughout the plan.

On the membership side, we assume that we will be able to command a higher initiation fee each time that we make a major capital investment and that interest in membership will accelerate in advance of each of these additions. For planning purposes, we assume the pool project will begin in the fall 2007 for an opening in 2008. The first $5,000 increase in initiation

fees is timed to occur in mid-2007. We have done the same with the anticipated renovation of the South Course in 20�0 and the clubhouse sometime in 2012-2013.

2006 2008-10 2011-13 2014-16Residents $50,000 $55,000 $60,000 $65,000Associates $25,000 $30,000 $33,000 $36,000Socials $15,000 $15,000 $15,000 $20,000

The plan includes an average expenditure of $1 million per year for annual capital replacements and maintenance throughout the life of the plan.

FINANCIAL PLAN

Projected Initiation Fees over the Next 10 Years

Carmel Country Club

Strategic Plan

22

The plan also assumes that we would continue to accept an average of 60 new members annually in the future. This total member number includes an average of 33 Resident members. This is the equivalent to the average number of new members we have accepted over the past five years. It is also the amount we need to stay abreast of normal attrition that occurs each year. The 2007 year does include a higher level of new member intake (�20 total new members) in anticipation of the interest in membership that will be generated by the pool project. We have already received a lot of inquiries with the anticipation of the project and believe it a fair assumption to recognize this future growth early in the planning stage. Again, we remind you that Carmel needs 60 total new members, including 33 new Resident members, each year simply to maintain membership at present levels.

2006 2007 2008 – 16Residents 45 66 33*Associates 20 34 17*Socials 20 20 10*Age Ups 4 7 22*

* Average

Capital Funding

The tables below show the results of attracting the anticipated number of new members in the plan at anticipated initiation fees during the planning timeframe (2006 – 2016).

2006 20072008-2010

2011-2013

2014-2016

Projected Capital Income (in thousands)

2,335 4,605 2,800* 3,100* 3,600*

Interest 50 50 50* 55* 55*

* Average

Capital Funding (2006-2016)New Development Capital Projects ..........................$18,000,000Annual Maintenance Capital .....................................$11,650,000Interest Expense ........................................................$ 3,115,000Excess Over Assumptions .........................................$ 3,167,000PROJECTED CAPITAL INCOME ......................$35,932,000

The Club’s debt presently stands at $1.7 million. The average level of debt during the ten-year financial master plan is $4,085,000, with a peak of about $8.5 million anticipated in 2011 following the renovation of the South Course. The plan assumes the Club will have no debt at the end of the ten years.

FINANCIAL PLAN

Strategic Plan23

GENERAL ISSUES

Next Steps

The Pool Complex project will be finalized, with plans and costs determined. As stated earlier, the construction is scheduled to begin fall 2007. The Board will provide the membership with updates on the Pool Complex planning and construction time schedule.

The Board will also continue to investigate the timing of the inevitable sewer project through our property. Once further information is received from Mechlenburg County, members will receive an update.

Summary

This Strategic Plan is the result of a multi-year planning effort and is a comprehensive approach to current problems and anticipated demands. When implemented, it will enhance Carmel’s position as a club of choice in a competitive marketplace, and it will result in increased member satisfaction and usage. The plans are only conceptual, and we will allow time to make any necessary changes.

The recommendations in this plan are guided by our belief that Carmel be recognized as the country club of choice in our region. Reinvesting in our golf course, updating the pool complex and addressing other capital requirements are central elements to this philosophy. We believe these elements will combine to:

Improve the quality of the membership experience for all members;Enhance our facilities to meet member needs;Maintain our position among the leading clubs;Attract more new members to the Club.

•

•••

Carmel Country Club

Strategic Plan

2�

Carmel StaffJohn Schultz, CCMGeneral Manager

Bill AndersonDirector of Greens & Grounds

Philip DoddsMembership Director

Todd UpchurchDirector of Tennis

Rebecca WalkerController

Keith Van YahresClubhouse Manager

Professional FirmsRees Jones, Inc.

Golf Course Designer

LandDesign, Inc.Landscape Architect

McMahon Group, Inc.Club Consultant

MEMBERS, STAFF AND PROFESSIONALS INVOLVED

Board of Directors

Craig Radke, President

Ted BarnesCharlie BartzRick EmbreeJim Griffin

Robert HoppePhil KuttnerRich Potts

Shawn QuillinDavid RuppCecil SmithBill Trahan

David Watterworth

Strategic Planning Committee

Greg CoxJohn Duda

Berkley GodehnSteve HurleighSam Randall

We would also like to recognize the efforts of our past Board of Directors and past Strategic Planning Committees from 2003-2005 for their time and energy in helping develop this plan.

Carmel Country Club4735 Carmel Road

Charlotte, NC 28226(704) 542-2454

www.carmelcountryclub.org

Thank you for your support of Carmel.

The Strategic Planning Committee and Board of Directors endorse this plan.