Sports - July 2005

Pinehurst didn't putter around with the Open
By Chris Roush

Hiring thousands of employees. Negotiating hundreds of supply contracts. Finding business partners. Millions of dollars in local economic impact that depend on your performance. Typical worries of a business executive? Sure. Then how about shutting down within a week of opening, by design? That’s what’s different about Reg Jones and Beth Kocher’s most recent venture.

It’s called the 2005 U.S. Open Championship, held in June on Pinehurst Resort’s No. 2 course. Jones, the Pinehurst vice president who is director of the Open, and Kocher, the resort’s executive vice president and chair of the tournament’s executive committee, started planning five years ago. Now that the tournament is over, all that work is being dismantled. By early August, a multimillion-dollar operation supporting more than 380,000 customers will no longer exist. Volunteers will have gone. Companies will have folded their hospitality tents. All that will be left is the money made by Pinehurst’s owner, Dallas-based ClubCorp, and Sandhills businesses.

A month before the event, no one was predicting how this year’s tournament would stack up financially against 1999, the last time Pinehurst hosted the Open. ClubCorp made $10 million then but would not project its earnings this year. The local convention and visitors bureau forecast $70 million in direct spending this year and an overall economic impact of $128 million —lower than its estimate of a $160 million impact in 1999. CVB President Caleb Miles says the numbers aren’t comparable because the earlier estimate was based on the impact at other U.S. Open sites. The 2005 projection — which also lags Pinehurst’s forecast of $153 million — is based on information gathered in 1999.

There was reason to believe in the months before the tournament that spending could fall short of the 1999 level. “That’s because of what corporations are spending,” Miles says. “We’re not seeing the spending we saw back in the late ’90s.”

Don’t blame Jones and Kocher, both of whom worked on the 1999 tournament. Jones was director of operations then, handling transportation for fans and other logistics, while Kocher was in a job similar to the one she holds now. They took what they learned then and used it this year. They also visited the sites of the last five Opens.

“Every year, you find a better way to do something,” Jones says. Among the changes based on their trips were lengthening the course by nearly 100 yards and adding space to the merchandise tent, making it 60 feet longer than the one at Shinnecock Hills, N.Y., site of last year’s Open. They also negotiated a contract with the United States Golf Association that’s better on at least two fronts: Pinehurst could sell about 8,000 more tickets for each round at $85 each, up from $65 in 1999.

When planning began in 2000, Jones and Kocher faced another issue — the economy and its impact on selling corporate-hospitality tents. For the ’99 Open, Pinehurst sold 50 tents at $125,000 each, generating $6.3 million. They worried that they would have trouble selling as many for ’05 because of the economic downturn and its effect on North Carolina businesses, particularly high-tech and textile companies. “Selling in mid-2002 and the fall of 2002 was pretty rough,” Kocher says.

So they turned to Jim Hyler, chief operating officer of Raleigh-based First Citizens Bancshares. Hyler, Jones and Pinehurst Director of Client Services Ricki Lasky visited executives around the state and encouraged them to buy hospitality tents.

By October, Pinehurst had sold all 65 spaces. Prices ranged from $40,000 to $175,000. Among companies that bought space in 1999 and came back were Bank of America, Belk, Charlotte Pipe and Foundry, Duke Energy and Progress Energy. Newcomers included BB&T, Golden Corral, Quintiles Transnational and Red Hat. Officials would not say how much revenue was generated. The companies wined and dined clients and potential customers in air-conditioned tents with carpet, white tablecloths and entrees that included barbecued salmon.

In September 2003, Pinehurst began accepting applications for the 5,400 volunteers needed to run the event. By December 2004, every position from airport greeter to scoreboard operator had been filled. In May, volunteers picked up their uniforms and began training.

Along the way, Jones negotiated contracts for everything needed to run the Open. Progress Energy laid power lines for eight megawatts of electricity, enough to power 3,200 homes for a year, and Sprint installed miles of telephone wire around the course. While all that was going on, Pinehurst still had to accommodate guests who wanted to play golf.

And, just like that, it was over. The pros packed their bags and headed to the next tournament. But work for Jones and Kocher was not done.

“The teardown is probably the worst point,” Jones says. “Most everybody leaves, and then our vendors and staff have to clean it up.” While it takes three months to install the bleachers and other equipment, they can be removed in half that time.

But the work is never really over. Pinehurst has more tournaments to run. In 2007, it will manage the U.S. Women’s Open for Pine Needles Lodge and Golf Club in Southern Pines. The next year, Pinehurst hosts the U.S. Amateur. Logistical meetings have already been held for those events. “There is no down time,” Kocher says. “They keep us a little busy.”

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