Manhattan Beach Country Club sold for $73 million
by Mark McDermott
The Manhattan Beach Country Club has been sold to Bay Club for $73 million in a deal that will also net the City of Manhattan Beach $730,000.
The Bay Club Company, a luxury health club operator, originating in San Francisco, has been expanding regionally. It will take over operations of the Manhattan Country Club at the beginning of June.
Little is likely to change at the club, which has been operated by owner Keith Brackpool and managing director Sara Neilson Sedlacek for the last 15 years. Over that span, the club has been thoroughly modernized — a former hotdog grill, for example, was upgraded to a full menu restaurant, and an outdated 400 sq. ft. gym has been expanded into a state-of-the-art fitness facility.
Brackpool had planned to leave the club to his children, Sedlacek said, but the what the Bay Club offered both fit the direction he’d established for the Country Club and provided growth opportunities for employees. She said it will also provide members added value.
“We realized a standalone club had less to offer employees and members than a larger company’s array,” Sedlacek said. “It’s both an opportunity to leverage members into other amenities as well as for staff to have growth opportunities. We knew we needed to be part of a bigger picture. It really is a good fit.”
Annie Appel, Bay Club executive vice president, said the acquisition is in keeping with the company’s strategy to increase its presence in Southern California. Two years ago, Bay Club purchased Spectrum Clubs locations in Rolling Hills Estates, Redondo Beach, and El Segundo. Last year, Bay Club acquired two other country clubs — Boulder Ridge in San Jose, and Fairbanks Ranch in San Diego, both golf clubs — further moving beyond the traditional fitness club business model.
“It is right in line with our other locations,” Appel said. “It compliments what we’ve done in Northern California and San Diego, really bringing to life the luxury sports resort model to the L.A. market. We’ve been looking to do this since entering the marketplace with the acquisition of Spectrum. We will continue to look to add like properties in the region.”
“This is a stunning property,” she added.
The Bay Club was founded in 1977 with its flagship campus in San Francisco. The idea behind Bay Club’s recent growth has been to further merge fitness clubs with the hospitality sphere, adding restaurants, kids activities, and a social calendar of membership events.
“Our focus shifted about seven years ago,” Appel said. “We took a look at the membership base we have at the athletic club level and the evolution of where those members are going in their lives and the need for family playgrounds and social spaces. Really focusing on the community aspect has been the big shift, while continuing to honor fitness as the core of the business. But now, more than ever, people are looking for another community place to gather; we are building our campuses so they can really come to life. These are pretty amazing places — you can sit by a fire pit with some live music playing while the kids have ‘S’mores and you enjoy a glass of wine at the end of the day.”
Both Appel and Sedlacek stressed that the Country Club would maintain its exclusivity. The price of a family membership will be $20,000 with monthly dues of $445. Bay Club offers several tiers of memberships at most its clubs; the highest tier of membership costs $25,000 to join and $975 in monthly dues and gives access to the entire Bay Club portfolio, including the golf properties.
Country Club members — about 1,500 families, Sedlacek said — will be given access to other nearby Bay Club facilities, but not vice versa, unless those members join a higher tier.
“The exclusivity stays with a Manhattan Beach Country Club membership,” Sedlacek said.
The transfer of the ground lease to the property, which is owned by the City, was approved unanimously by the City Council at its May 16 meeting. The lease actually has three components — the 50,000 sq. ft. tennis and fitness facility, a three story, 38,000 sq. ft. office building, and a parking lot — and runs through 2043 with two 15-year club options. The City, at the time of entering an amended lease with the Country Club in 2003, received $15,633 per month (tied to annual CPI increases) and a percentage of gross revenues from tournaments, rentals, and food and beverage sales. The city receives a $730,000 one-time transfer fee with the Bay Club purchase.
All 150 current staff members will remain, except Brackpool and Sedlacek.
“We set aside part of the proceeds from the sale for bonuses and to throw a nice party for them,” Sedlacek said. “We really owe so much of our success to staff, many of whom have been with us 15 to 20 years. This is as much a sign of what a successful operation they’ve been able to run as it is ours.”