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Old North State Club, designed by Tom Fazio, sold by Virginia utility

By David Ranii

McClatchy-Tribune News Service

Published: May 13, 2009

John McConnell is expanding his golfing empire.

McConnell, who made millions in the medical software business, has acquired a fifth course, the Old North State Club at Uwharrie Point, which is on Badin Lake between Asheboro and Charlotte.

And that's not all. McConnell said he expects to complete the acquisition of yet another course, The Reserve Golf Club of Pawleys Island in South Carolina, next month.

"Normally I wouldn't tell you that," McConnell said Tuesday, "but I'm 100 percent confident that will close."

Both courses are designed by top course architects, which is par for the course for McConnell and his golfing venture, McConnell Golf.

Old North State was designed by Tom Fazio, the second McConnell golf course conceived by Fazio.
The Reserve was designed by Greg Norman.

McConnell has a reputation for buying courses that have deteriorated and need upgrading. But these courses don't fall into that category.

"It's not a profitable club," he said of Old North State, "but it is not a distressed property. ... It is a club that needs more members."

The N.C. Golf Panel, which annually rates golf courses across the state, has ranked it the No. 2 overall course in the state for the past seven years, behind Pinehurst No. 2.

Old North State was acquired for an undisclosed price from Dominion, the Richmond, Va., utility company. Dominion has been divesting its real estate holdings to focus on energy, said spokesman Mark Lazenby.

McConnell Golf offers members of its clubs an unusual deal: Those who pay the initiation fee at one course gain access to them all. Initiation fees at McConnell Golf courses range from $7,500 at Treyburn Country Club in Durham to $25,000 at Old North State, said Ray McDonald, vice president of sales and marketing.

"As a member of a single club, you can't match the value we offer our members," McDonald said. "Golfers like the opportunity to play other championship golf courses."

McConnell's holdings

McConnell Golf also owns the Raleigh Country Club, Cardinal Golf & Country Club in Greensboro and Musgrove Mill Golf Club in Clinton, S.C.

"He has done a remarkable job in terms of, first of all, identifying really quality golf courses and, once he acquires them, doing a first-class job in conditioning the courses and bringing the facilities up to a very high standard," said Ed Byman, co-founder and CEO of Global Value Commerce, a Raleigh company that operates several Web sites that sell golf equipment, including globalgolf .com .

"As a golfer," Byman added, "I'm thrilled. ... he has taken over these courses and brought new energy to them." Byman is a former professional golfer who won the Mexican Open by two strokes over Lee Trevino in 1974 and played for three years on the PGA Tour.

McConnell is expanding despite a slack golf market. The number of rounds played nationwide in 2008 declined 0.8 percent, according to The PGA of America and the National Golf Course Owners Association.

McConnell said revenue this year through April declined 4 percent. "But at the same time," he added,
"I have to attribute some of that to the weather we have had."

Revenue last year, he said, rose about 10 percent. McConnell thinks the company's strategy of buying top courses and keeping them in "championship condition" separates it from the competition.

Some of the company's golf clubs are profitable and some aren't, he said.

"We're like a venture capital firm right now," McConnell said. "We have a five- to seven-year program, and we're in year three of it. I like the trends in our operations and the staff we are accumulating. I feel very confident about the future."

More fun than software

McConnell exited the software business in 2006 and has focused his attention on golf.
Operating multiple golf courses creates economies of scale, including the consolidation of back-office operations and discounts for buying in volume, McDonald said.

McConnell is the co-founder and former CEO of publicly traded Medic Computer. When the company was sold for $923 million, he made more than $60 million on the deal. After leaving Medic, he invested in and became CEO of A4 Health systems, which fetched $272 million when it was sold in 2006.

He started turning his golfing hobby into a business in 2003 when he bought the Raleigh Country Club after it went bankrupt.

McConnell said the golfing business isn't as financially rewarding as software, but it is more fun. "I tell our staff that we have products that make people happy," he said.