Southridge Club Elects To Cease Operations

By: Destination Club News
Date: November 6, 2009

One of the industry's most exclusive destination clubs, The Southridge Club, has elected to move in another direction and will no longer pursue their club venture.

Originally launched in April of this year, The Southridge Club brought a new operational model to the destination club sector. "The Southridge Club is a club unlike any other," said the club's press release. "Located in the beautiful cosmopolitan desert oasis of Palm Springs, California, Southridge is not a destination, residential or fractional club - it's been referred to as an Experience Club. Membership includes private use of three of America's most unique and distinguished estates."

Those three properties were the Elrod House, the Steve McQueen House, and the Boat House, three residences on the gated Southridge Drive in Palm Springs. Anchored by the Elrod House, valued as high as $30 million, members would have access to all three homes concurrently when they traveled, totaling 13 bedrooms and in excess of 17,000 square feet of living space. The masterpiece Elrod House spanned 9,000 square feet itself. Situated on over 23 acres, the John Lautner designed mansion reached cult status when it was used in James Bond's Diamonds are Forever. The Steve McQueen House still featured the original furniture of Hollywood's "King of Cool" who originally had told interior designer Peter Shore to design it for a bachelor.

Hollywood has its price. Members would join the club for a three year right to use membership for a healthy $300,000 price tag. Each member would have 10 nights of annual access to the club's properties with the ability to purchase additional nights for $8,000 each. Catering to the ultra-affluent, The Southridge Club believed that their target market would be "multiple homeowners who likely will be ultra-high net worth individuals or families with at least $30 million in assets."

Despite these steep prices, the club would quickly acquire its inaugural club member, an unnamed US billionaire. Over the past several weeks, the club had begun to ramp up their marketing efforts, including distributing their first press release and making their formal introduction to the market.

Unfortunately, just as the club's name began to trickle out to their target audience, the owner of the residences wanted to go in a different direction. Rather than making the homes available to members through The Southridge Club, he would elect to sell each of the three prized properties, effectively ending the club.

In regards to the club's first member, the owner "more than fairly" accommodated him, according to club representatives.

While disappointed with the closure of the club, Southridge's operational arm is considering a similarly structured club in Europe, catering to US buyer. The as yet unnamed destination club may be introduced in 2010, so please check back frequently to learn more.

The ultra-luxury segment of the destination club industry doesn't have the best of track records. Ciel and Yellowstone Club World, created by billionaires J. Joseph Ricketts and Tim Blixseth respectively, both were unable to generate sufficient interest in their clubs. Ciel would be most remembered by an eleventh hour bid to acquire the assets to Tanner & Haley, only to have it be rejected in favor of a bid $10 million less from Ultimate Resort. Tanner & Haley's Chief Restructuring Officer Holly Etlin would say, "I continue to be confident that Ultimate is the best choice for Tanner & Haley members and I am extremely pleased that the judge agreed with us." Yellowstone Club World is known for their ostentatious collection of properties, including a private island, a 14th century chateau, and a 265 acre lot in Scotland. The Solstice Collection managed the most success at the top of the destination club sector, but now find themselves deeply immersed in bankruptcy.

While it is always unfortunate to learn of another closure in the destination club sector, we are glad to hear that the young club's member was taken care of in the transition. Despite the small size and scope of the club, it further demonstrates the need to conduct a thorough evaluation of a club prior to joining, particularly clubs still in their launch phase. If you are considering destination club membership, request a free copy of our Destination Club Guide to learn more about the benefits and risks of membership with contributions from members, potential members, and destination club executives alike.