Sports Core turnaround helps bottom line
By Chuck Fieldman
Many Oak Brook residents, past and present, have fond memories of time spent at the village’s Sports Core, a 269-acre open-space area purchased in 1977 from Oak Brook founder Paul Butler that features the Bath & Tennis Club, Golf Club, soccer field, polo field, and additional outdoor open space. Village Board member Larry Herman, a liaison to the village’s Sports Core Committee, has memories of spending time at the Sports Core as a child. And now, he is involved in leading a charge to make the entire operation financially independent. “The village is striving for financial independence at each element of the Sports Core, as required by a village ordinance, which mandates self-sufficiency of the Sports Core,” Village Manager Greg Summers said. “In the past, there were years in which the Sports Core did not cover its expenses, even in the aggregate, much less on a function by function basis.” Summers said, “with a new directive of each functional area of the Sports Core sustaining itself, even more attention to detail is required to reevaluate each and every operational unit, including its challenges and opportunities.” Herman said the Sports Core cannot continue to violate the clear directive of the village’s long‐standing enterprise fund balanced budget ordinance. “Some in town have long argued that the club is an amenity and therefore does not need to be financially self-sufficient,” he said. “Not only does that fly in the face of the ordinance, but it makes no sense.
Less than 3% of our resident households are members. I assure you the other 97% don’t want to subsidize the 3%.” Herman said the history of the Sports Core has been subject to local myths that are often at odds with reality. “Accounting for the Sports Core operations has historically been opaque at best and misleading at worst,” he said. “Capital improvements can’t be excluded from profitability analyses.” Herman said the self-sustaining ordinance for the Sports Core was first signed into law in 1995 by then Village President Karen Bushy. “And yet, until this past year, the village has continually violated its own ordinance by operating the Sports Core in the red,” Herman said. He said the five-year budget forecast at the time he was elected in 2021 showed a fund deficit of about $6.9 million for Dec. 31. 2025. “Of course, you can’t have a negative balance, which means those deficits would have been funded from the General Fund, as has happened repeatedly in past years,” Herman said. He said that some of the reasons the fund was going negative were poorly negotiated leases and management contracts, which largely have now been fixed, unjustifiable planned capital projects, such as $2.5 million for an expanded paved soccer parking lot while soccer is currently generating about $100,000 a year in profit, and several hundred thousand dollars for a golf course fertilizer storage shed. The village now plans to expand soccer parking by adding a gravel lot for about $100,000, Herman said. Summers said that over the last several years, golf and food operations at the Golf Club clubhouse have been cash flow positive, allowing for funding of capital reserves to cover reinvestment for course maintenance and improvements.
These improvements in the past included the repair of the cart paths, pond edge stabilization, and renovation of the clubhouse restaurant. This season, improvements will include renovation of the clubhouse locker rooms, sand trap revitalization, additional cart path repairs, and more pond edge stabilization. “Unfortunately, too often in the past, golf revenues were used to subsidize losses at the Bath & Tennis Club and banquet clubhouse instead of reinvesting in the course that generated the revenues in the first place,” Summers said. He said that historically, the village has tried many arrangements at the Bath & Tennis Club and with the soccer fields, including operating them with village staff, contracting with the Oak Brook Park District to provide staffing, and turning the full operation over to the park district on a contract operation model. “Unfortunately, these contracts turned over not only operational expenses but all membership revenues, leaving the village paying for the maintenance and capital improvements, with no associated revenue source; thereby ensuring an annual loss,” Summers said. In 2022, the Village Board contracted with Premier Athletic Management to operate the soccer fields. Under this contract, that company reimburses the village for all soccer field maintenance costs as well as paying a minimum of $100,000 from 2023 onward — after $94,000 in 2022 — for use of the fields. “This contract guarantees the village a net positive revenue stream to fund a capital reserve for the fields with zero annual operating expenses,” Summers said, adding that as a result, Premier Athletic Management also leases the soccer offices for an additional $18,000 of revenue in 2023, with an annual escalator built in each year.
For the Bath and Tennis operations, Summers said, the village took back control of the pool management, staffing it through a contract with a third-party pool management company, but keeping all membership revenues. In 2022, this amounted to $457,000 in membership revenues at the pool and $171,000 in contractual operating expenses, generating $286,000 to be used to offset capital investment in renovating and improving the Bath and Tennis Club, Summers said. The same is true for the contractual operation of the tennis program, with an arrangement that guarantees 10% of the tennis operating revenue to be collected by the village, with all operational costs covered by the remaining 90%. “Collectively, the Bath & Tennis Club, plus soccer field, turnaround amounts to a net positive $380,000 in 2022 and is projected to be a $450,000 in 2023,” Summers said. Another significant financial improvement for the village is the new Polo/Butler National lease, something that Herman got involved with after being elected to the Board. “Though initial negotiations had been ongoing prior to the election, I realized that the village was going to be responsible for field maintenance, and the average increase over the 12-year term was less than 2%,” he said. “We changed it to have Polo/ Butler do their own maintenance, saving us at least $60,000 a year, and I changed the escalation clause to track Consumer Price Index.
Those two changes should net the village over $1 million more over the lease term.” As for the Bath & Tennis Club clubhouse banquet operation, the village’s Sports Core Committee and Village Board have spent considerable time analyzing alternatives for an operation that has lost an average of $202,000 per year over the last five years. “At the same time, a facility study shows that over $2.8 million of investment will be required in that facility over the next ten years,” Summers said. The Village Board put an advisory referendum on the November 2022 ballot, resulting in 68% of voters indicating they did not want the Board to invest this money into the property for the purpose of sustaining the banquet operation. “Having heard the voters, the Village Board is now considering options for the property, including a soon to-be-issued Request for Proposals, seeking alternate proposed users to lease the facility as a turnkey operation,” Summers said. He said all banquet event agreements already booked through the end of 2023 will be honored. Michael Manzo, the Village Board’s other Sports Core Committee liaison, gave major kudos to Herman and Summers for the financial turnaround of the Sports Core. “We eliminated the park district agreement to run the Bath & Tennis Club and started working with our Sports Core Committee, which recommended to the previous Village Board and village manager to not sign the park district agreement,” Manzo said. “The new Village Board, village manager, and Sports Core Committee now have a spirit of cooperation, which has produced incredible results.”
*Photos provided by The Oak Brook Polo
