The board of directors of the Fairbanks Ranch Country Club, which sits on some 400 acres of land owned by the city of San Diego in the San Dieguito River Valley, is negotiating a purchase and sale agreement with the San Francisco-based Bay Club Company, country club officials have confirmed.
Before a deal can be finalized, three things must happen, said Steve Wittert, the country club’s general manager: a purchase and sales agreement must be signed by the board and the company, club members must vote to approve the sale, and the city must approve transferring the lease for the property from the country club to the Bay Club Company.
The country club does have a signed “letter of intent” with Bay Club Company regarding the proposed purchase, Wittert said, while another country club official said the club is “very close” to signing a purchase and sale agreement with Bay Club Company.
Earlier proposed purchase offers for the country club, including one deal involving U-T San Diego publisher Douglas “Papa Doug” Manchester and golfer Phil Mickelson, fell through, Wittert said.
The private, invitation-only country club, which features golf courses totaling 27 holes, tennis courts and other facilities, is owned by its members. Wittert said the club has 375 golf members and 125 social members, as well as members in other categories.
The Bay Club Company operates 11 resorts on the West Coast, and also has partnerships in Squaw Valley and Carmel Valley Ranch, according to its website. Among its holdings is the Bay Club Carmel Valley at 12000 Carmel Country Road, which offers swimming pools, tennis courts and a 15,000-square-foot fitness center.
The country club’s 61-year lease with the city expires in 2044. Under its terms, the club was exempt from paying rent from the start of the lease in 1983 through 2009. In return, club members paid for some $25 million in improvements to the property. Beginning in 2010, the country club began making annual rent payments to the city of about $900,000 per year. The payment for 2014 was $940,000, Wittert said.
Cybele Thompson, director of real estate assets for the city of San Diego, said preliminary meetings have been held with the Bay Club Company, but nothing has been officially presented regarding the proposed lease transfer.
She said city officials are familiar with Bay Club and its Carmel Valley facility, and that the company seems reputable. However, the city will need to review financial documents and a business plan before making its decision. Ultimately, the San Diego City Council will have to approve the lease transfer, a process that could take several months, she said.
Terms of the proposed deal were not disclosed by the country club, and it was not clear whether Bay Club would seek a lease extension from the city. Under the existing lease, the property would revert to the city in 2044 when the agreement expires.
Officials with the Bay Club Company could not be reached for comment by press time.
Wittert said the club’s members decided to seek bids from interested purchasers after a study determined that in order to remain competitive in the country club market, the club would have to add family-friendly amenities, such as an expanded fitness center, a swimming pool and upgraded dining facilities.
The proposed deal with Bay Club Company would position the country club to remain competitive into the future, Wittert said.
“The members will benefit economically and will pay lower dues,” Wittert said. Golf members now pay monthly dues of $1,234, while social members pay $410 per month. Initiation fees are $18,000 for golf members and $2,500 for social members.
Members will enjoy new amenities and also be able to use the Bay Club Company’s other facilities, Wittert said.
“I think it’s a very positive move for the country club,” he said.
The parties have not worked out whether the club’s 90 full-time and 40 part-time employees will be able to stay on after the ownership transition, Wittert said. But regardless of the outcome of the sale, Wittert said, he plans to retire in March after a 12-year tenure with the country club.
“My plan and my wife’s plan is for us both to retire at the same time and go on with other activities that we’ve saved for, and it’s time to put into motion,” he said.