Posh City Clubs Loosen Their Ties to Stay Alive

The banquet room boasts a fireplace big enough to hold an SUV. Hallways are decorated with sepia-toned prints by the renowned photographer Edward Curtis, who used them to pay his membership bills a century ago. Even the sunlight filtering through the tall windows seems elegant and refined.

You know you’ve made it in Seattle society when you’re invited to join the exclusive Rainier Club. Local legend says more business deals have been struck behind the club’s stately brick walls than in any office in the city.

So, the pony in the lobby stuck out a bit.

This spring’s Easter egg hunt required some special entertainment for the children, and that’s why a pony was brought in.

“And everything that comes with a pony,” Michael Troyer, chief operating officer of the 114-year-old club said, arching one eyebrow.

The scene would have been unthinkable 30 years ago, when children and barn animals were equally unwelcome.

But changes are brewing at America’s posh private city clubs, the urban cousins of country clubs in the suburbs. Struggling to stay alive in a business-casual world, exclusive city clubs are loosening their ties, slashing fees and shaking up traditions.

“It took a while for a lot of clubs to wake up that they really need to be competitive,” said James Burns, general manager of the Union Club of Boston.

“Membership just sort of happened” in the old days, Burns said. “Now it’s a whole different ballgame.”

Private city clubs offer fine dining in luxurious settings to those who can afford the $1,000 to $2,000 initiation fee, plus hundreds of dollars in monthly dues, plus meal expenses. Most important, they offer members the warm feeling of belonging to an exclusive club where the staff always knows who you are, what you drink and how you like your steak.

About 500,000 people are members at city clubs, according to the Club Managers Assn. of America.

But despite the perks they offer, city clubs are losing 12% of members annually, according to Dallas-based club consultant Rick Coyne. Older members are dying off, and prospective new members often forgo city club membership in favor of country clubs, expensive vacations or a host of other amusements.

“Young people today don’t see private clubs the same way their fathers did, or certainly as their grandfathers did,” Coyne said.

Clubs still want to preserve traditions, he said, “but unless you listen to what the market is telling you, you’re not going to be around.”

These days, clubs know they must provide fun for the whole family if they want to keep dues-payers happy. Which explains the pony in Seattle.

“That’s the kind of thing that seems to click these days--everyone’s so busy,” explained Rainier Club President Jay Rockey, a member for 30 years.

Change started knocking on private club doors during the 1970s, when lawsuits challenged long-standing policies that prevented many people from joining. Many clubs excluded women and nonwhites from membership. The doors opened for good in 1988, when the U.S. Supreme Court upheld a New York law banning discrimination by private clubs. (Though no industry group offers race and gender breakdowns, observers say clubs remain largely white and male.)

Club managers recall the 1980s fondly. Business was good, and the opulent image of private clubs meshed with the style of the status-conscious decade. City club fortunes reversed in the 1990s. Even as the surging popularity of golf boosted private country club membership in the last decade , city clubs suffered one blow after another.

Tax laws changed in the mid-1990s so that club dues and many club expenses are no longer tax deductible. At the same time, companies cut back on club memberships. Corporations paid for most club memberships two decades ago, but now only 20% of memberships are corporate-held, according to Kathy O’Neal, senior vice president of Dallas-based Club Corp., which owns 200 private clubs worldwide.

Now that members are spending their own money, clubs must work harder than ever to woo and keep them.

That’s why R.J. Ballanca, manager of San Francisco’s City Club, tracks his members with a computer database--women business leaders, wine buffs, architecture aficionados--and he tailors events accordingly.

After Sept. 11, he waived the usual $1,000 initiation fee in favor of a $100 donation to charity--one of many clubs offering similar deals. Ballanca said his biggest obstacle in recruiting new members is overcoming the “martini-swilling, cigar-smoking geezers” image left over from the club’s previous incarnation as the old Pacific Stock Exchange Lunch Club.

Some clubs have taken radical steps to shed their old-geezer image.

When Dave Rosen became general manager of the downtown Denver Club in 1998, employees usually outnumbered members in the dining room. The club dumped its formal dining rooms and ballrooms and reopened as a stripped-down, yet still posh, athletic club.

“The days of the 48-ounce porterhouse and Caesar salad for lunch are gone,” Rosen declared. “I don’t think people do business the same way they did 15 years ago.”

Of course, some things never change. To join the Denver Club, you must be nominated and seconded by a member, provide stellar references and win the board’s approval.

“We’re not a Bally’s or a 24-Hour Fitness,” Rosen sniffed. “That’s the way it’s worked for 120 years.”

Executives can get fine dining, swanky decor and fawning service at dozens of restaurants in any major city, so why pay good money just for the privilege of eating at a private club?

This question keeps club managers up at night.

“We have a lot of good restaurants in town and we’re fighting for that same money,” said Mark Schwab, general manager of the University and Whist Club in Wilmington, Del. He regularly quizzes younger members on what they want from the club, and offers gourmet takeout meals for busy members.

“The club is an extension of our members’ homes,” Schwab said. “They go somewhere else and they’re just another customer, no one special.”

The allure of being someone special is what keeps private clubs in business, despite the setbacks.

“It’s kind of like ‘Cheers,’ where you go and they know your name,” explained O’Neal of Club Corp. “You know it’s a safe haven.”

But even the standards of exclusivity are flexible. Clubs now have Web sites and membership directors who will gladly open the door to almost anyone who can afford the fees and dues.

At Atlanta’s Commerce Club, where top executives from Georgia Pacific, UPS and Coca-Cola sit on the board, you need a sponsor and two letters of recommendation to join.

“But if you’re new to Atlanta and don’t know a soul, all you have to do is call the membership director and we can easily arrange for you to meet two members over lunch,” said Mary Gilbreath, the club’s communication director.

Even as traditional clubs scramble for members, a handful of spunky upstarts are nipping at their heels.

In Seattle, a private club called the Ruins operates out of a fabulously refurbished old warehouse in an unfashionable section of town. The owners, who created the club as an outgrowth of their high-end catering business, expressed their eclectic tastes in the decor: One dining room features a life-size model elephant rescued from a defunct department store.

The attraction remains the same whether the club is old and stodgy or young and hip.

“In a world that can be chaotic, this is fun, easy and a level of elegance that I like,” said member Marge Levy, who brought two ferocious little Yorkshire terriers to the Ruins’ popular annual doggie luncheon. “They call me by my first name, they serve me what I like.”

After lunch--hamburgers in doggie bowls for the human members, gourmet biscuits on silver trays for their canine guests--a local hip-hop dance troupe performed, bumping and grinding to Britney Spears and Janet Jackson. Levy and her friends screamed with delight as their well-bred dogs howled in harmony.

Definitely not your grandfather’s private club.