By GENE YASUDA
Steven Lesnik walks into the stately clubhouse of The Glen Club – a new Tom Fazio design in Chicago – nearly a half-hour late, apologizing profusely.
Not that he needs to.
His tardiness is understandable considering he has been rather busy lately: It’s a week before the Kemper Open, the PGA Tour event he oversees; a day after he christened a new course, Bolingbrook (Ill.) Golf Club; and only a few hours before he tends to affairs at the company he owns: KemperSports Management, a golf course development and management business.
“I’m so sorry I’m late,” Lesnik says again. “But I was meeting with my banker. And if there’s one person you can’t say ‘No’ to, it’s your banker.”
Which especially is true when your business is growing as steadily as KemperSports. Though hardly an overnight success – it was established in 1978 – the company recently has gained much acclaim for a string of hits.
The crescendo of kudos began in 1999 with its management of Bandon Dunes, quickly making the Michael Keiser-owned gem in Oregon a favorite among golf aficionados. Then KemperSports helped build Bandon’s sister course, Pacific Dunes, which opened last summer to raves. In 2001, the company teamed again with Keiser and built in its back yard a field of dreams: the $27 million Glen Club, featuring a 48,000-square-foot clubhouse and a Fazio track adorned with man-made lakes, streams and undulating fairways – remarkable considering the site once was a U.S. Navy air base.
But KemperSports isn’t only about princely daily fees or luxurious resort properties. It manages or owns a spectrum of courses, and its menu of 75 facilities includes several municipal operations. The company, for example, runs all six of the Chicago Park District’s public tracks, offering residents nine holes of golf along Lake Michigan for as little as $14.
Indeed, KemperSports’ diverse portfolio – as well as the varied services the company provides – explains how KemperSports has been able to grow in an industry drowning in a glut of exorbitantly priced layouts. And with extensive experience in managing courses, the company appears poised to grow yet again: Many high-end courses likely will turn to professional operators such as KemperSports to preserve or rescue their operations.
“Everybody’s facing stiff competition, and people are increasingly looking for professional management,” says Steven Skinner, president of KemperSports’ management division. “And there are lots of cities that are facing shrinking budgets and need help.”
Since 1997, KemperSports’ staff has grown from 900 to 3,000 employees. The number of properties in its portfolio has nearly quadrupled. And revenue under management – total sales generated by its combined managed and owned properties – has soared from $32 million to $120 million.
For all its apparent success, however, the privately held company won’t disclose its own revenues or discuss profitability. Lesnik is surprisingly mum about his company, especially considering his media background. Early in his career, Lesnik worked as a newspaper reporter, and later joined Kemper Insurance Cos., where he handled public and government relations in spin capital Washington, D.C.
“Why should I tell you our secrets and help our competitors?” asks Lesnik, who in the late 1970s took responsibility for the course the insurance company had built next to its headquarters: Kemper Lakes Golf Course in Long Grove, Ill. That operation evolved into KemperSports Management, which Lesnik bought in 1983.
His silence actually reveals one of the company’s principle tenets. In today’s society, which so often is characterized by an “It’s all about me” mentality, KemperSports is a contrarian organization that puts its clients first.
The company strives to operate almost invisibly as it attempts to make each of its facilities “best in class.”
KemperSports’ patrons and business partners say the company achieves stature for its properties because the company operates more like a hospitality business than a golf business. It assumes responsibility for all personnel, even at its managed facilities, making every worker a KemperSports employee. Furthermore, new hires undergo “personality and aptitude screening” to determine whether they are “hospitality-oriented.”
The dividend from such front-end attention to hiring is readily visible: Caddies at The Glen Club not only tend to their regular duties but rush to help guests struggling with their luggage at checkout. Stella Nanos, who oversees the Chicago Park District facilities, proudly escorts visitors around the nine-hole Robert A. Black Golf Course as if it is a championship track and extends neighborly greetings to regular patrons.
The Chicago Park District, arguably, may be one of the company’s biggest successes.
In 1992, a year before the city turned over the courses to KemperSports, municipal golf drained the city’s recreation budget, losing $500,000. That year, less than 500 children used the facilities. In extending a lease to operate the courses, Mayor Richard Daley charged KemperSports with establishing a youth outreach program.
The company invested more than $1 million for capital improvements, adding landscaping and replacing matt-covered concrete tee boxes with grass. Then it implemented dozens of initiatives – such as day clinics, junior golf leagues and summer camps – to involve youngsters. By the end of that first year, KemperSports paid the city a lump sum of $500,000, including its lease payment and revenue sharing proceeds. And in 2001, more than 18,000 children participated in city golf programs.
Other partners and clients also praise the company’s “turn-key” solutions.
In Sam Dunn’s case, help from KemperSports allowed the architect to fulfill a dream: a course to call his own.
“I became smitten with golf 10 to 15 years ago, and one day after drinking one too many margaritas, I decided it would be fun to build one,” Dunn says. “But the more we got into it, the more we realized the less we knew. How do you get a logo put on a golf shirt? Who do you lease carts from? Where do you find a quality superintendent? The questions were endless.”
Aside from becoming an equity partner in Dunn’s project, KemperSports arranged for construction financing, recruited JMP Golf Design and PGA Tour player Ernie Els to design the course, and hired a project supervisor to oversee construction and costs.
The end result was Whiskey Creek Golf Club, a $90 daily fee that traverses rolling farmland, woods, rock outcroppings and streams outside Washington.
“KemperSports has a theory that when a customer comes to a golf course, he or she takes in 1,000 points of impressions. Everything from seeing cigarette butts on the ground to noticing the type of landscaping, to how they’re greeted and whether they can get their food in a hurry at the turn. . . . The people at KemperSports, they’ve got it all down,” Dunn says.
The company’s thoroughness in preparation and execution is what first impressed Keiser when he met Lesnik’s staff more than 10 year ago.
“They’re very disciplined, especially on the numbers side,” Keiser says. His faith in KemperSports led him to allow the company to run Bandon Dunes’ lodging of 155 rooms – even though KemperSports had never before managed a hotel property. The company hired and trained 230 employees to handle a host of tasks ranging from reservations and housekeeping to food services.
Ironically, KemperSports’ growth spurt, which has made it one of the industry’s five largest players, can be attributed to self-restraint.
“We say ‘No’ around here quite a lot,” says Lesnik’s son, Josh, the company’s vice president of marketing.
During the course building boom of the past few years, KemperSports has reviewed countless proposals, rejecting many because they failed to pass the company’s proprietary “price/quality” analysis, which scrutinizes factors such as quality of design, location, services provided and conditioning.
In layman’s terms, KemperSports picks winners.
“If you look at our portfolio, the number of facilities that are running break even or better is in the high 90 percentile,” Skinner says. “We haven’t gotten caught up in the buying frenzy. We haven’t overpaid for leases or overpaid for properties.”
Expect that trend to continue. KemperSports isn’t driven by an “exit strategy” to collect incalculable fortunes on Wall Street. Steven Lesnik only is interested in building a business that will take care of – and perhaps be run by – future Lesnik generations.
“You want to know what my business is about? It’s about him,” says Lesnik, pointing to a 5-year-old boy sitting in The Glen Club’s restaurant. “That’s Jake. He’s my grandson.”