Celebrating birdies took on a more expansive meaning this past spring at Agawam Hunt, thanks to an unusual partnership with The Nature ­Conservancy.

After emerging from Chapter 11 bankruptcy in March with approval of a restructuring plan that included the sale of the country club’s assets to a new ownership group, more than a year after major debt and shrunken membership rolls had created a cash crunch, the 121-year-old club in East Providence sold a conservation easement to The Nature Conservancy.

The deal, which doesn’t require the nonprofit conservancy to spend any of its own money, will prohibit development on a majority of the club’s land, among other things.

It turns out that the 130 acres owned by Agawam are a critical stopping point for migratory birds, as well as a habitat for waterfowl along the Ten Mile River as it winds its way to the Seekonk River and then into Narragansett Bay. So now, in the middle of the urban grid of Greater Providence, those birds will have a sanctuary in perpetuity, as the country club’s members continue in their quest to make birdies as they play on their historic 18-hole course.

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And on Aug. 6, the U.S. Bankruptcy Court discharged Agawam Hunt from Chapter 11 protection, leaving the club and its membership looking forward to a future unencumbered by debt.

The circumstances that led to Agawam making the deal are not totally unique.

Golf courses across the nation are closing at a faster rate than new ones are opening. This deal is the first of its kind for the conservancy in New England, but it may not be the last in the region.

FOWL HABITAT: The sale of two conservation easements from the Agawam Hunt country club in East Providence to The Nature Conservancy will prohibit development on the club’s land, which is a critical stopping point for migratory birds and provides a habitat for waterfowl along the Ten Mile River, which winds into the Seekonk River and then into Narragansett Bay. / COURTESY THE NATURE CONSERVANCY

HITTING BOTTOM

The financial landscape for all but the most well-off golf clubs is challenging, and it has been for years.

A decade ago Agawam Hunt, which was founded formally in 1897 and was the 16th member club of the United States Golf Association, posted a yearly deficit of $360,196 (including noncash charges) for fiscal 2008, with long-term debt and mortgage totaling $4.1 million, according to its 990 form filed as a result of being a 501(c)7 nonprofit. Total revenue for the year was $2.8 million.

Its most recent 990, for fiscal 2016, showed a deficit for the year of $543,244 (which itself followed a $233,130 deficit in fiscal 2015), with a mortgage and long-term notes of $2.9 million. Accounts payable and accrued expenses totaled $1.1 million, while other liabilities, which could include taxes and other payables, came to $749,382. All this heavy balance sheet came as the club, which includes a Donald Ross-designed golf course, a swimming pool, and tennis and squash courts, posted total revenue of $2.4 million.

As a result, after years of posting operating losses, by the end of the fiscal year the club had net assets of just $92,061.

Agawam Hunt is not alone in the golf industry in having a difficult time making ends meet. Overall, golf’s popularity seems to be on the wane in the United States. According to Statista.com, the number of golf participants dropped from about 30 million in 2006 to just over 22 million in 2012 and has been about 24 million annually since.

The annual report on the state of the game by the National Golf Foundation last year saw an overall decline in participation in 2016 of 1.2 percent, and the number of 18-hole-equivalent courses dropping nationally by a net 171 facilities.

The region has not been immune to the national challenges, with regular bankruptcies and restructuring par for the course.

Valley Country Club in Warwick filed for bankruptcy in March 2010 with long-term debt of $4.9 million, and it took most of the year for a new ownership group to restructure its debt and emerge as an operating country club.

Crestwood Country Club in Rehoboth was bought in January 2012, the result largely of constraints imposed by $1 million in long-term debt.

Ledgemont Country Club in Seekonk in January 2014 was bought with $2.5 million in long-term debt on its books.

All of the clubs were battling the double whammy of shrinking membership rolls and accumulated liabilities.

The most recent sale of a member-owned club came in February 2015, when 113-year-old Pawtucket Country Club sold itself to three members for an undisclosed price, allowing it to begin operating again debt-free. Its most recent 990, for fiscal 2016, showed mortgages, and loans to current and former officers of $173,687 and total liabilities of $641,280, while total revenue for the club was $1.5 million. Still, even with its balance sheet in relatively good condition, Pawtucket ended the year with expenses $247,642 greater than revenue.

One of the group of three who purchased the Pawtucket club, David Rampone has been a member for three decades.

“We’re in pretty good shape [at this point],” Rampone told Providence Business News. “We’ve got about 285 members and with a few more, we’ll be 100 percent full.”

He said when the club was in trouble a few years ago, members bailed, afraid of being hit with “huge assessments.”

“No one wanted to be the last man standing on debt, but when they learned the club wasn’t in financial peril, 40 members came back immediately, and in three years, it was 100,” he said.

The point Rampone makes is a significant one. Oftentimes clubs in financial difficulty will ask members to loan money to the club to tide it over a short-term cash crunch, but it is not unusual for such loans to stay on the books for a long time. And if a club goes bankrupt, those loans may never be repaid.

When Agawam filed for Chapter 11 in federal court in January 2017, it listed debts and liabilities of more than $5 million, including approximately $460,000 it owed to East Providence for property taxes and water/sewer fees and a loan from Bank Rhode Island that had been in default for years, with the club paying only interest.

In fact, in the fall of 2016 BankRI had said the situation was no longer tenable, forcing the club to look for a solution. That solution was bankruptcy.

HISTORIC CLUBHOUSE: The clubhouse of the Agawam Hunt country club in East Providence. The club was founded in 1897 and was the 16th member club of the United States Golf Association.
 / COURTESY AGAWAM HUNT
HISTORIC CLUBHOUSE: The clubhouse of the Agawam Hunt country club in East Providence. The club was founded in 1897 and was the 16th member club of the United States Golf Association.
 / COURTESY AGAWAM HUNT

CLIMBING OUT

While getting into fiscal trouble did not happen overnight for Agawam, getting out of it included a complex series of discussions and actions.

Soon after the club filed for bankruptcy protection, a group of members got together to brainstorm about what could be done to save the club. The largest, but certainly not the only, issue was the bank note held by BankRI. Bankruptcy, after all, requires the court to maximize revenue for creditors.

One option discussed was building housing on the course. Developers came, but in the end no other entities made a bid on the club’s assets.

Even so, while the club filed for bankruptcy in January 2017, it did not emerge until March 2018, putting many of the principals on edge the entire time.

“It was a long process to get out of bankruptcy, and you still had a sort of a shroud hanging over you until then,” said Jordan Frank, one of the 17 longtime members and families of the club who are the investors who took over under the supervision of bankruptcy court. He is also on the five-person management team that now leads Agawam.

“As a management team you have pressure to stay cash-flow-positive, so you don’t get court-forced into Chapter 7,” he said, a step that would mean total liquidation of all assets.

Within months of the Chapter 11 filing, the leaders of the team looking for a way out came up with the idea of selling a conservation easement to The Nature Conservancy. The idea was that the conservancy could pay for keeping the club’s land from being developed, which in turn would pay off the club’s debts.

The challenge, of course, was this was not something that the conservancy had done before in New England, and the amount that the club wanted to sell the conservation easement for, $2 million, was not something the nonprofit had sitting around or any interest in spending. So, the club had to raise the money in order to fund the sale of the easement. That process, along with various negotiations involving the club’s liquor license and a number of East Providence issues, took roughly a year.

It was not a hard sell for the conservancy. It was an unusual deal but a win-win for both sides, said Scott Comings, associate state director of The Nature Conservancy in Rhode Island.

“That land was cleared and could have been used to build houses. All they had to do is make the lots,” Comings said of a plan that might have resulted in more than 100 homes being constructed. “This is eight minutes from the financial district in Providence. It’s highly coveted land.”

The move was The Nature Conservancy’s first large-scale project in its Providence Metro Program, which looks to bring “nature back to … neighborhoods,” while helping communities thrive and improving the health of Narragansett Bay, according to its website.

The Providence initiative is one of 21 across the nation, including Boston and Bridgeport, Conn., in New England, along with Chicago, Los Angeles and New York City, among other metro areas.

In one document on the conservancy’s Rhode Island office website, it says that “We are collaborating with partners to develop sophisticated financial tools to protect the natural resources on which cities depend.”

Comings said Agawam had “the right group of folks that wanted to work with us, and in addition to the conservation angle, we also got a pretty significant management plan from Agawam with a much more ecological approach to course management.”

SERVING MEMBERS: Tennis courts are one of many amenities, along with a swim ming pool, squash courts and a historic 18-hole golf course, available to members of the Agawam Hunt country club in East Providence. / COURTESY AGAWAM HUNT

SERVING MEMBERS: Tennis courts are one of many amenities, along with a swim ming pool, squash courts and a historic 18-hole golf course, available to members of the Agawam Hunt country club in East Providence. / COURTESY AGAWAM HUNT

CONVINCING MEMBERS

If The Nature Conservancy was on board with the conservation easement concept early on, Frank said selling development rights wasn’t intuitive to members right away.

“It’s not necessarily an obvious thing to do. You don’t just call up your favorite conservation group and they say ‘fine’ and hand over a couple million dollars,” Frank said. “You have to figure the value proposition to people who will contribute to the conservancy, so the conservancy will do it. It all has to be viable.”

Viability was easy to establish, he said, “because we have so much frontage on the Ten Mile River, and development runoff would really risk polluting the water and damaging the river banks. And it’s an obvious corridor for fish and birds and other critters. Other golf courses don’t have that kind of characteristic.”

He said the “Aha!” moment for many donor members to help save the club was a different value proposition for conservation rather than equity.

“Giving a dollar to the conservancy effort is a perpetual gift to the earth,” Frank said, while investing in the club’s equity could be just another risky attempt to save the club. “Many of our longstanding members have been through several attempts to do that. The millions of dollars of member debt sitting on the books was evidence of that,” he said.

Still, Frank added, members had to be convinced the plan would work, that the money could be raised, and that once the funds were in hand, the plan was achievable.

“It’s easy to write a plan, harder to achieve it, especially in a business landscape where country clubs are going defunct left and right,” Frank said. Even with the conservancy’s participation, “It’s not a clear path to profitability or stability.”

In the end, there were 17 equity-investor families in the club who contributed several million dollars (the group would not divulge the actual amount) to go along with the $2 million that was raised from 50 charity donors and funneled through the conservancy to pay off the club’s liabilities.

FOWL HABITAT: The sale of two conservation easements from the Agawam Hunt country club in East Providence to The Nature Conservancy will prohibit development on the club’s land, which is a critical stopping point for migratory birds and provides a habitat for waterfowl along the Ten Mile River, which winds into the Seekonk River and then into Narragansett Bay.
 / COURTESY THE NATURE CONSERVANCY
FOWL HABITAT: The sale of two conservation easements from the Agawam Hunt country club in East Providence to The Nature Conservancy will prohibit development on the club’s land, which is a critical stopping point for migratory birds and provides a habitat for waterfowl along the Ten Mile River, which winds into the Seekonk River and then into Narragansett Bay.
 / COURTESY THE NATURE CONSERVANCY

STAVING OFF DEVELOPMENT

The easement for 11 of the club’s 18 holes on the golf course will include a nature trail that is not part of the golf course, Comings said, which could be built by the conservancy by fall.

Also as part of the agreement, the conservancy has an option to buy a conservation easement for 40 more acres that includes the rest of the course, once it secures additional private financing.

The private club also will grant access to the golf course to East Providence residents on four specified days of the year, and the conservancy will host up to five guided nature walks on the property each year.

Now that the Agawam-Nature Conservancy program is in place, might this be a way for other troubled golf clubs in the region to find their way back into financial health?

First off, according to Comings, is completion of the deal for the rest of the conservation easement from the club. Working in partnership with Agawam leadership, the conservancy is making progress on the fundraising for the deal, said Comings, which is expected to total $980,000.

Are there more such arrangements in the works in Rhode Island? Comings said that after the Agawam deal was made public earlier this year, he took calls from other clubs looking for similar deals.

But The Nature Conservancy is not in the business of rescuing golf clubs, he says. The Agawam deal made sense because of all the frontage on the Ten Mile River. And thus, while the environmental group is open to discussions with other golf clubs, it has to be the right fit with its mission. He isn’t scouring the map of the Ocean State with an eye to buy easements from other courses at the moment. “We are habitat-based and we are looking for the right spots,” he said.

The deal “takes what The Nature Conservancy has done really well, which is land acquisition for decades, and brings it to a new arena and a new approach. It’s a really cool thing,” Comings said.

BRIDGE BUILDING: The Ten Mile River winds its way through Agawam Hunt’s golf course and is the key reason that The Nature Conservancy struck a deal to buy a conservation easement from the club for $2 million, money that helped the club exit Chapter 11 bankruptcy earlier this year. / COURTESY AGAWAM HUNT
BRIDGE BUILDING: The Ten Mile River winds its way through Agawam Hunt’s golf course and is the key reason that The Nature Conservancy struck a deal to buy a conservation easement from the club for $2 million, money that helped the club exit Chapter 11 bankruptcy earlier this year. / COURTESY AGAWAM HUNT

AGAWAM’S FUTURE

When the bankruptcy was lifted, Frank said, “It was like this cloud had passed.

“People were elated and thankful when … we had the note, and a lot of new families started appearing over the summer,” Frank said. “It created life in a place that needed to be woken up.”

At Agawam Hunt, the focus is on family, Frank said, getting parents and kids together to not just play golf but other sports: The club has 14 outdoor tennis courts, mostly grass and four clay, two indoor hard courts and three squash courts, in addition to a swimming pool.

“At one time people had more time to play, with [fewer] competing interests,” Frank said. “Now there are more options for people other than golf. … If you’re trying to justify an expense and have a family, it’s easier with something the whole family can participate in.”

The club has made small improvements, he said, calling them “tiny adjustments that turned the place around,” which included spending $10,000 on improving the pool by heating it.

“That enabled us to have a warm pool on Memorial Day and extending the season to September,” he said. “That’s an example of how a small tweak makes a significant contribution to the club and adds a value proposition to becoming a member.”

Assuming the club can finish the fundraising for the completion of the conservation-easement deal, it will have another $1 million to put toward operations, including transitioning to a greener approach to management of the golf course. Part of the deal with the conservancy called for a more environmentally friendly, or naturally managed, zone where the course comes in direct contact with the Ten Mile River.

The club is making a commitment to extend that approach to all 18 holes, something that it expects will take three to five years and will result in reduced maintenance costs and better playing conditions. The only challenge will be aesthetic, in that the course will not be unnaturally green throughout the year, but the club’s leaders believe it is a more sustainable path going forward.

So far, at least, the direction being charted seems to resonate in the market. From a nadir of 350 individual adult members shortly after the bankruptcy filing, the club has grown its adult membership rolls to 455, with an ongoing campaign to bring new members in, including children, and to keep the birdies flying.