FCC White Paper Report

FIDDLESTICKS COUNTRY CLUB

White Paper Report Facility conditions and progress toward a facility improvement program for the members of Fiddlesticks Country Club.

White Paper Report: Facility Conditions and Progress Toward a Facility Improvement Program For the Members of Fiddlesticks Country Club

Dear Fellow Member, Fiddlesticks Country Club (FCC) is a vibrant community built on exceptional golf, tennis, pickleball, wellness, and social activities. Our members share a unique camaraderie and pride in our club, which serves as both a home and an equity investment for each of us. To maintain our unique community and protect our shared investment, we must ensure FCC remains sustainable and attractive to current and future members. Recognizing the importance of long-term planning, the Board established a Long-Range Facilities Planning Committee (Committee) in 2016 to evaluate our facilities and create a roadmap for the future. Recently, the Committee hosted focus groups in April 2023 and January 2024 to gather member input on the Long-Range Master Plan. Based on member feedback, the Board prioritized addressing two of our oldest facilities—the clubhouse and gatehouse. This White Paper Report and accompanying FAQs aim to provide a clear, fact-based overview of our facilities' current state, outline recent progress, and share a vision for future improvements. As you review this document, several key themes emerge: • Capital funding has been historically inadequate, limiting our ability to invest in large-scale projects. For thirty-eight of the club's forty-four-year history, joining fees and assessments customarily used to help fund aspirational capital improvements were mostly returned to members when they left the club. • Over the last twenty years, FCC has spent $11.3 million on non-golf course improvements, of which $1.9 million (an average of less than $100k per year) was spent on the clubhouse. • Consistent with the prior point, Fiddlesticks is ranked last out of twelve competitive clubs at .6% CAGR (compound annual growth rate). The range for these clubs is 3.2% -8.7%, with the average at 5.1% and median at 4.5%. This is further explained in Section II E of the White Paper. • Our clubhouse and gatehouse no longer meet current Building/Life Safety and ADA codes or meet members' evolving needs.

1

• Membership expectations have shifted, with members seeking improved amenities such as outdoor dining and enhanced social spaces and activities. • Thanks to our unique low density, superior golf courses, excellent racquet and fitness programs, vibrant social activities, and special membership culture, the Board and our advisors believe that Fiddlesticks can maintain its premier status by ensuring our non-golf facilities are “on par” with our competitors. • P ast projects, such as the fitness center, cabana, and patio dining, were downsized during development due to financial concerns , leaving them undersized for current demands. We are now facing a similar decision regarding the appropriate sizing of the clubhouse. • During the focus group meetings in January, it was presented that the first very rough cost estimate was approximately $36 million for the clubhouse and gatehouse. With value engineering, the cost might be reduced to $33 million. The Board authorized $110k to further the design to 10-15% complete to provide additional accuracy to these estimates. In May, the estimates were revised to a preliminary clubhouse and gatehouse cost estimate of $38 to $42 million. We have all seen the inflation and escalation tha t has affected the economy, making any estimate subject to variations. SWF has experienced construction inflation pressures due to the past two hurricanes hitting our area. • Section VIII will discuss financing methods, including monthly member costs depending on the method selected. We now expect the Long Mean renovation to be more costly than initially estimated. This means that unless there is a method other than using joining fees to fund the additional cost, fewer dollars will be available for the clubhouse/gatehouse project. The Long Mean final cost estimates won’t be available until early 2025, at which time the membership will be updated. • It should also be noted that from an operating (not capital) perspective, Fiddlesticks ranks among the lowest in annual membership costs compared to clubs with fewer than 750 homes and comparable amenities, including thirty-six holes of golf, eight pickleball courts, seven tennis courts, and a fitness center . Next Steps • It is very important for ALL members to participate in the upcoming process. Informal Q&A sessions with Board and Committee members will be held in December. Member tours will be provided before a formal Town Hall on January 10, 2025, to present challenges, explore solutions, and answer questions. Following this, members will receive a comprehensive survey to get your thoughts on what you

2

believe we should do. The McMahon Group will tabulate and present the survey results to the membership, along with detailed information as backup. The survey results, comments received, and ongoing membership discussions will help the Board decide on the next steps. The bottom line is that we face challenges because many of Fiddlesticks' facilities, Long Mean Golf Course, and infrastructure are old, capital funds are low, construction costs are high and estimated to increase, and member expectations and usage differ from when the facilities were built. “Avoiding these challenges is no longer a choice; deciding how best to meet them is our only option." Your Input Matters. Fiddlesticks is OUR club and community. Your participation in this process is essential to creating a transparent, inclusive, and forward-looking plan that meets the needs of current and future members. Together, we can enhance Fiddlesticks for generations to come.

Respectfully, The Fiddlesticks Country Club Board of Directors Geoff Hearsum – President Larry Den Peter Haley Elliot Katzman Iain Kerr Joe Marucci Bryan Simmering

Gus Simmons Steve Wagner

3

I. Understanding Our Unique Community: Fiddlesticks is more than just a place to live and play—it is a community and a business with intertwined interests: A. Residential Community: We are a close-knit community of people living in 585 homes. Our low member density allows for a more intimate club experience, promoting personal interactions and camaraderie between members and between members and staff. Our members look out for one another, fostering a powerful sense of belonging and camaraderie. Additionally, through multiple charitable initiatives, including the Bobby Nichols-Fiddlesticks Charity Foundation, United Way, Fiddlesticks Cares, and Building Futures, our community shows a strong commitment to philanthropy, helping to reinforce our unique caring culture, improving the broader community, and making a positive impact beyond our club's boundaries. B. Golf, Tennis, Pickleball, Fitness, Swimming, and Social Club: We enjoy two great golf courses, racquet sports, fitness, and social experiences. In recent years, our offerings have expanded to include the cabana and pool, enhanced fitness facilities, pickleball courts, bocce, and increased member events that unite the community. Our programs are supported by dedicated management and staff committed to excellence. C. Business and Investment: Members share equity in homes and club facilities valued at over $500 million. Protecting property values and ensuring our club attracts new members are critical to maintaining FCC’s reputation, financial stability, and legacy attractiveness. A. Background: When Fiddlesticks Country Club was founded in 1982, member expectations, construction standards, building codes, and life safety regulations differed vastly. The Americans with Disabilities Act did not yet exist, and much of the current standard fire and wind protection safety technology was not yet developed. A lot has changed, including the capability of our facilities to respond to and accommodate the expectations of today’s members. Our facilities are aging and require significant maintenance and updates to remain functional and viable. While cosmetic updates can refresh the II. Current State of Facilities and Finances (Our Challenges)

4

appearance, they cannot address underlying structural and compliance issues. In addition, needs change, and expectations of what a club should offer have shifted over the past four decades. B. Evolving Compliance Regulations, Member Expectations, and Insurability Risk: As you review this white paper and accompanying materials, please remember that more than half the estimated projected costs for a possible solution are associated with compliance and infrastructure needs and not enhancing the member experience. 1) Life/Safety Building Code Compliance: The clubhouse and gatehouse are outdated and do not meet current Florida Building Code standards, including ADA compliance, wind resistance, and fire protection. Per the Florida Building Code and Federal regulations, FCC faces an estimated $20 million in life/safety, ADA, and building code work (a majority of which is mandatory). Approximately 65% of the work needed would be in construction costs and 35% in design costs, furniture, fixtures, equipment, financing, fees, etc. (soft costs) 2) Aging Infrastructure: Outdated HVAC systems, electrical equipment, plumbing, and inadequate vapor barriers contribute to inefficiencies , increased maintenance costs, and potential safety hazards. 3) Member Dissatisfaction: Member feedback indicates significant dissatisfaction with key areas, such as the clubhouse and outdoor dining options, being waitlisted for the increasing number of member events, and operational challenge inefficiencies due to the aging kitchen , highlighting the need for enhancements. 4) Insurability: If Fiddlesticks does not complete the renovations, we might face an insurability issue, resulting in a significant financial risk to the membership. C. Founding and Early Capital Model: Our capital funding for aspirational capital needs is funded by net member joining fees, which have been grossly inadequate. 1) Net member joining fees are the dollar amounts the club keeps when one member leaves and is replaced by a new member. These net amounts are customarily used to help fund aspirational capital

5

improvements. For thirty-eight years of the club's forty-four-year history, member joining fees were mostly returned (on average, 80%) to the departing members. 2) In 2018, member joining fees began entering a capital reserve fund. Today, we have a balance of $3.9 million in the fund. In addition to unexpected capital needs for clubhouse repairs, these funds have been used to finance the re -grassing of the Long Mean in 2019, the addition of the pickleball court, and the addition of the back gate. Funds are being accumulated to pay for the Long Mean project scheduled for 2026. 3) Building capital reserves will take time, as 393 pre-2018 homeowners have agreements with the Club that provide approximately 40% of the new member joining fees upon sale to be reimbursed to the prior owner. 4) Capital funding for asset replacements has been lean. The monthly capital dues charge finances , replacing assets as they wear out. Before 2012, the club collected a monthly capital contribution of $120/per month, which was increased to $145 in 2013 and then raised to $290 in 2015. This charge has not increased since 2015. 1) Deferred Maintenance: Inadequate capital funding in the past has led to serious underinvestment in our facilities both maintenance and replacement. 2) Financial Burden on Current Members: In the past, underfunding has resulted in the call for collective action by the current membership to address these needs. E. Expert Assistance: Club Benchmarking (CB) is a well-respected private club industry expert that provides data-driven insights for private clubs. We have reviewed the status of our club's financial status with CB, and they have offered the following insights : D. Consequences of Early Capital Model:

1) Capital Income Deficiency :

6

i. The annual growth of the club's net worth is the most important financial metric for evaluating private golf clubs. This metric measures financial stability, balance sheet strength, and quality of assets. It is also a key driver in measuring market relevance and competitive standing. The median Compound Annual Growth Rate (CAGR) for clubs in the CB universe is (3.1%). ii. FCC’s annual capital income needed for aspirational capital projects is significantly (81%) below the median compound annual growth rate (CAGR) of 3.1% for all country clubs in their database . FCC’s CAGR is just 0.6% when measured from 2007 to 2023. iii. Southwest Florida is one of the top three competitive areas of the country. Nearby clubs like Shadow Wood, the Forest, Mediterra, Quail West, Quail Creek, Bonita Bay, Crown Colony, Imperial, Pelican Bay, Pelicans Nest, Plantation, and Wild Cat Run exceed this benchmark, allowing them to fund ongoing renovations and maintain competitiveness. iv. All the clubs above exceed the national average for all clubs in the Club Benchmarking database. The range for the clubs above is 3.2% to 8.7%, with the average at 5.1% and the median at 4.5%.

v. FCC at .6% is 81% below the average of the clubs referred to above, 87% below the median, and 81% below the lowest of the clubs above.

vi. Per Club Benchmarking “Fiddlesticks has the lowest CAGR in the peer set and in one of the three most competitive markets in the country (Palm Beach and Palm Springs), is not keeping up with the competition and is undercapitalized. In any world, this is not a sound business strategy.”

7

2) Capital Focus vs. Operational Dues:

i. Club Benchmarking emphasizes the importance of capital income (joining fees and capital dues) in driving financial stability, improving facilities, and increasing member satisfaction. FCC’s monthly operational dues are adequate to fund day-to-day and annual operating expenses but are not allocated or dedicated to building long-term value or funding large-scale projects.

3) Impact on Property Values: i.

Clubs with consistent facility refresh cycles (every 10 years) maintain higher property values. Clubs without these investments risk stagnating memberships and declining home values.

8

ii. The 2018 change to the joining fee model is having a positive impact as members with prior joining fee refund agreements sell their homes. F. The Cost of Doing Nothing: Choosing not to act is not a cost-free option. The implications include: 1) Increasing Maintenance Costs: Our aging facilities need more frequent and costly repairs, leading to disruptions, delays, and decreased member satisfaction. Postponing improvements results in more maintenance investments while repairs and capital costs rise. 2) Insurability Risks: Non-compliance with current building codes results in higher insurance premiums or an inability to secure insurance, exposing us to significant financial risk. 3) Escalating Construction Costs : Construction expenses and inflation have significantly raised project costs. Eventually, the club will have to do a significant renovation, which will be more costly than it is today. The initial renovation estimates of $18 million in early 2020 have surged, making prompt action crucial to avoid further financial strain and ensure the safety and satisfaction of members. Industry observers see this rate of increase continuing to accelerate, not decline. 4) Reputational Damage: Though hard to quantify financially, failure to keep our facilities in fresh condition will result in squandering a legacy of excellence that has been meticulously built since 1982. A. All clubs have personalities and reputations; those attributes are valuable and vulnerable. A change in a club’s perceived value can readily lead to a spiraling crisis in which the view of Fiddlesticks as a

premier, desirable club could become negative and make membership recruitment and home sales more difficult. If this continues, the inability to generate new joining fees and capital income will further strain maintenance budgets and reduce future investment in our facilities, exacerbating the “Fiddlesticks is getting old and worn out” perception.

9

B. Some members believe we have an identity crisis, saying the membership is divided about whether Fiddlesticks should maintain its “premier status” or identify as a “value club.” C. We are at a critical time when we must unite, live up to the Club’s mission and vision statements, and proceed to upgrade facilities to meet current and future membership needs. III. Member Feedback and Satisfaction Over the past two years, over three hundred members have participated in focus groups to obtain comprehensive feedback on facility satisfaction. (note: some members attended both series of focus group meetings)

A. Key Insights from Focus Group Participant Survey responses:

i. High Satisfaction: Swimming pool/spa (79%) and tennis courts (71%) ii. Low Satisfaction: Clubhouse (37%) and outdoor dining (28%).

B. Key Concerns:

i. Limited Dining Options: There is a strong need for enhanced indoor and expanded outdoor dining experiences.

ii. Event Capacity Constraints: Current facilities cannot accommodate the growing demand for member events and functions, leading to waitlists and overcrowding.

10

iii. Inadequate Facilities – In addition to outdoor and indoor dining, parking for cars and golf carts and the gatehouse were identified.

iv. Inadequate Storage—Storage is inadequate throughout the club. In addition to the cart barn, we need 5,000 – 6,000 sq. ft. of storage.

v. Administrative Space: Our primary office space is located in the third- floor attic and does not meet ADA requirements. It is estimated that we need 7,500 sq ft located on the lower floor of the possible addition.

vi. Outdated Member Locker Rooms – Both men’s and ladies' locker rooms are outdated and inadequate.

11

IV. Comparative Analysis with Competitive Clubs We do not exist in a vacuum, and prospective members have many options to consider. Twenty years ago, FCC’s primary competitors were clubs in Collier County, such as The Club at Mediterra and Pelican Bay. The following are a few attributes that potential members consider. A. Density a. Advantage—Fiddlesticks is uniquely positioned as one of the only clubs in SW Florida with fewer than 750 front doors, thirty-six holes of golf, seven tennis courts, eight pickleball courts, two Bocce courts, and a fitness center. b. Challenge - The low-density number of members for the number of amenities creates funding challenges. B. Membership Costs a. Such low density would be expected to command a premium price, yet FCC annual costs remain low compared to the competition. i. From an amenity perspective, Fiddlesticks has one of the lowest annual costs of clubs in SW Florida, with less than 750 homes, thirty-six holes of golf, eight pickleball courts, seven tennis courts, and a fitness center . ii. Without regard to amenities, Fiddlestick's annual dues are near the median of all SW Florida clubs. Fiddlesticks has invested $11.3 million in clubhouse, cabana, and fitness improvements over the last twenty years. Of this amount, $1.9 million (an average of less than $100k per year) was spent on the clubhouse. iii. While this investment helped drive higher membership interest and home sales, it pales compared to investments other clubs in Lee County made over the same period. Newer local clubs have invested heavily in updating their facilities without the burden of meeting current building codes and safety issues. In addition, unlike Fiddlesticks, most have had a source of capital to fund aspirational capital projects, as member joining fees have provided a source of capital. C. Quality of Facilities - i.

12

V. Critical Considerations for Future Planning: People will leave Fiddlesticks in the ordinary course of life. Our sustained success depends on attracting new members while maintaining a quality offering that results in Fiddlestick's Pride among current members. A. People join or choose to remain in a club after considering many factors, including demographics, facilities, amenities, events, management, maintenance, cost, value, proximity to family and friends, and ambiance. Each prospective member looks at us and other clubs, compares all these elements, and decides where to join. B. Fiddlesticks has never looked to be the largest, lushest, or loudest club in Florida. Our path has been low-density, premium golf, and high satisfaction. Protecting the investment of equity members in FCC means that when a prospective member adds up all the considerations, we must be comparable and competitive based on that individual’s weighting of all the comparison factors. We do not have to be everything to everyone. However, we must have functional, safe, up-to-date, attractive facilities with sufficie nt capacity and safety, and we must be responsive to what our members and those seeking membership want and expect. C. In planning for the future, we must consider several critical factors: i. Evolving Membership: Who are our members now in terms of age, activities they pursue, and economic capacity? How might those elements change over time? ii. Demographics: Since the Committee began its work eight years ago, approximately 40% of our membership has changed. a. The average age of new members joining is sixty, and the average age of all FCC members is sixty-nine. New members often bring different expectations and preferences. b. There is a growing demand for modern amenities, facilities, and new and updated programming, with increased member social events. The member event experience is similar to the addition of pickleball, resulting in an increase in the number of member social events and member participation in events, which supports this

13

iii. Sufficient Facilities: We need sufficient capacity in all areas —dining, events, sports, and wellness—to accommodate our membership today and future members who purchase a home. That is not currently the case. a. Many of our facilities are capacity-limited, resulting in either undesirable wait times or members being excluded from access to dining, activities, events, and functions. Enhancing the member experience by providing additional access is a high priority. b. A quiet dining area with enhanced acoustics has also been noted as a priority. c. Low-Density Consistency: We must maintain our low-density concept that makes the golf courses, tennis courts, and pickleball unusually accessible and must be carried through to all our facilities. Capital Allocation and Project Trade- offs: a. No club can afford everything, but members ask their Boards to allocate capital to the highest-value projects. b. While appropriate financial trade - offs must always be made when funding any new project, Boards must also ensure that projects consider current and projected utilization. c. Our consultants recommended expanding the cabana and adding more pickleball courts. As the membership knows, we are now building additional pickleball courts, and the Master Plan reflects the potential need to expand both these facilities in the future. iv.

v.

FCC Capital Project History –

a) When projects like the fitness center, cabana, pickleball courts, and patio dining were added as new amenities, they were downsized from the original designs. At the time, our consultants recommended expanding the cabana and adding more pickleball courts.

14

b) Fitness center—Many members questioned its proposed size as they did not use the existing fitness center (previously located in what now is the boardroom).

c) Patio - The same question was raised when the patio was modified since there was little interest in the existing patio.

d) Cabana and Pool—Many members questioned why a new pool and cabana should be built since very few members used the existing pool.

e) Pickleball- As the membership knows, we are building additional pickleball courts.

f) We find ourselves in a situation comparable to prior undersized projects. Our data supports and our advisors recommend renovating and expanding our clubhouse to accommodate the growing number of member events and the increased number of members participating.

VI. Possible Solution—Clubhouse: Our clubhouse and gatehouse facilities, in their existing condition, require significant capital investment to address deficiencies. Based on our consultant's advice and feedback from our membership focus groups, some of the construction work must be done, some work needs to be done, some work should be done, and other work is recommended and desirable. We have categorized the improvements into four major areas, or "buckets."

A. Bucket 1: Life/Safety/Building Code Compliance Upgrades – Must be Done

1) If Fiddlesticks were built from scratch today, it would be different from what it is, though you might only see some of the differences.

2) The Florida Building Code, updated every three years, incorporates all construction-related regulations for public and private buildings in Florida.

3) The code establishes unified and consistent standards. In addition to standardizing the design, construction, and compliance processes, the Code establishes.

15

4) safety, health, and general welfare regulations for building occupants, firefighters, and emergency responders during building emergencies. Structural strength. 5) Means of egress, stability, sanitation, adequate light, ventilation, and energy conservation standards are updated in each revision to meet safety and insurance requirements. 6) Whatever we choose to do, any remodeled or renovated structure must fully meet the current building code, including the requirements of the Americans with Disabilities Act. The code requires that when a significant renovation is undertaken, we must bring all of the building up to the existing code. 7) Insurability is another aspect of this code-compliance consideration, which has an important financial impact. The severity of recent storms is likely to result in a decline in the availability or affordability of commercial insurance, with older, more vulnerable structures becoming prohibitively expensive to insure or worse uninsurable. Without full insurance coverage, one catastrophic storm could destroy the economic well-being of the Club.

8) Also, it is a safety concern that visitors denied entry must currently enter the community gates to turn around and exit.

9) Code upgrades must be undertaken to meet legal and insurance requirements and assure safety and security for everyone using the facilities. These major items include ADA requirements, HVAC/vapor barriers, safety egress issues, and new wind and fire code adaptations.

B. Bucket 2: Infrastructure Improvements – Needs to be Done.

1) Infrastructure isn’t flashy and is essentially invisible, but it is essential. If we undertake a significant renovation, we must invest in right -sizing the underlying infrastructure, from water and waste plumbing to communication and electrical systems.

2) How many people will be served in each facility? What will the energy requirements be for equipment that supports all that facility’s functions? To

16

what extent do we want to build infrastructure that provides flexibility for increasing capacity and changing technology? These and many other questions—and their answers— will define what should be done regarding infrastructure enhancements. 3) Some of these upgrades include reworking the entrance to Glenlyon Court, modifying cart parking, modifying the main clubhouse entrance, driveway, and Porte-cochere, modifying the guest entrance/bag drop, and modifying the member entrance from the cart barn to the main level with new stairs and elevator.

C. Bucket 3: Functional Improvements – Should be Done.

1) Functional improvements might best be described as revamping, rehabilitating, or replacing what we have.

2) This would include increasing indoor and outdoor food and beverage service space (increasing from 15% to 50% (25% dedicated outdoor seats and 25% hybrid (indoor/outdoor) seats), expanding the kitchen, adding storage space for chairs, tables, and equipment, and improving both locker room facilities. It will also include an improved kitchen layout, vendor delivery space, cart barn flow improvements, added storage, employee breakroom , locker room/restrooms, and relocated administrative offices. 1. Aspirational projects are new facilities or significant reconfiguration of existing ones. These could include projects reflecting members’ demand for new spaces to engage with one another, expanded event options, or new experiences. 2. For example, an increase in outdoor dining capacity, a lobby that provides a gracious and warm welcome to those entering the clubhouse, increased casual dining space, added function, and event space capacity, improved member locker rooms, spaces available for group meetings and activities, and an added quiet dining room. D. Bucket 4: Aspirational Projects – Recommended and Desirable

17

3. The exhibits include the renderings developed by our architect and shown at the focus group meetings. The renderings include both functional and aspirational improvements.

VII.

Possible Solution - Gatehouse: While some may believe that the gatehouse's current understated design presents a quaint first impression, security concerns, and the building's obsolete infrastructure dictate the main reason to demolish the existing building and replace it with a new structure. A. Approximately 300,000 visits are recorded at the main gatehouse annually, consisting of members, guests, service providers, vendors, and staff. During these encounters, individuals denied entry by the security staff must currently enter the property to turn around, meaning we don’t truly have a gated community. B. The possible new gatehouse would be approximately 200 feet closer to Daniels Parkway. This would allow for the new gatehouse to be constructed while keeping the current gatehouse operational. The main gate is the only access for non-members, so it must stay fully operational during the construction phase (for vehicle logistics and surveillance/security). The existing gatehouse is inadequate for reuse and does not offer the needed port cohere. Reusing and remodeling the existing gatehouse was not deemed practical or necessary to achieve our future needs. C. The estimated cost of the gatehouse is $2.6 million—$3.1 million; as a reference point, the back gate, which does not have an associated building, cost $656,000 when installed in 2022. For a list of estimated costs, see FAQs for details. D. There is no Porte-cochere or rain protection for visitors who must provide proper identification, and the driveway is smaller than DOT standards. E. The existing road entrance area would be modified to alleviate the problem of contractor/visitor vehicles blocking the Member entrance lane during busy periods. F. The gatehouse houses the club's essential security equipment and controls. The existing building is not properly air-conditioned for the equipment and has weather-related issues.

G. The existing gatehouse would remain in place until the new gatehouse is constructed and fully functional. Keeping the main entrance operating during

18

construction would be a logistics challenge and add to the project's cost due to the need for temporary facilities.

H. The new structure would include a restroom, connections to the sewer system, office space, overnight accommodations for emergency coverage needs, the addition of a fiber optic connection to the main clubhouse and golf maintenance facilities, incident reporting software, camera upgrades, and a new generator.

VIII. The Cost of Doing Something - Possible Solution for Clubhouse and Gatehouse To consider moving forward, a good faith estimate of the costs to implement the possible solution must be understood, as discussed in this white paper. What has been developed is an estimate of the rough magnitude of costs. These drawings represent an idea of what could be done given the known deficiencies with the Clubhouse and Gatehouse and suggested improvements developed with focus group input. The cost will change based on several factors, including member survey feedback. At this time, total costs for the possible solution, as discussed, are estimated to be in the range of $38 million to $42 million. To pay for a solution, four potential funding sources are considered: • Debt/Borrowing- an attractive funding source allowing current members to pay for and enjoy improvements as long as they remain members. In addition, future members would pay for those improvements as they enjoy the club, with the understanding that the payment would stop after the loan is repaid. A ten-year loan agreement has been recommended. • Net Joining Fee - have increased in the past few years. The funding model assumes the sale of twenty-nine homes each year. The amount of funds projected from this source can be unpredictable based on the number of home sales and the percentage of equity held by members moving out of the community. The new joining fees are also subject to potential increases (positive – helping us to pay back the debt sooner) or decreases (negative) that can impact available capital and our ability to pay debt service. Net joining fees will not be adequate to fund the proposed projects fully but will be used to supplement other funding sources.

• Monthly Member Renovation Capital Contribution- the most reliable and steady source of capital funds that can be dedicated to capital projects and debt payments. This source is typically billed, which allows monthly, allowing members

19

to “pay as they go” and new members to “assume” those payments when they purchase the homes of departing members and join the Club. The members’ home values in communities like Fiddlesticks usually experience a positive increase with new investment in Club facilities. • One-Time Member Assessments—This funding source provides the needed available capital all at once but places the burden on current members and not new members who will use the Club in the future. There are reasons for this to be an option, but at this point in time, a one-time member assessment has been excluded. • The Board aims to fund future capital plans by carefully blending net entry fee revenues with debt/borrowing, repaid by a monthly member renovation capital contribution. Like the Loch Ness model, all current members pay the monthly contribution, and the obligation to make this payment does not continue when the membership ends. • As previously shared with the membership, $30 million in borrowing, at 5.5% interest, would result in a $225 monthly member charge over ten years. This is based on the assumption that the project will start in 2027, and member charges will not begin until then. Every additional million dollars in borrowing would require an additional monthly charge of $18 per member. For example, $35 million in borrowing would result in an estimated monthly charge of $315, $38 million in borrowing would result in an estimated monthly charge of $377, and $40 million in borrowing would result in an estimated monthly charge of $405. and $42 million in borrowing would result in an estimated monthly charge of $441. Once again, these amounts are provided to give a range of estimates and should not be considered definitive as the final scope of a plan, including timing, funding, and other factors, are determined. IX. Impact of Delays Delaying the necessary project would result in: A. Continuing Life Safety /Code Risks: We can no longer delay correcting our ADA and Code Compliance issues related to Member and Employee Safety. These items must be corrected.

20

B. Increasing Costs: Construction expenses and inflation have significantly raised the project's costs, and further delays will continue to increase the cost of solutions. C. Deteriorating Member Satisfaction: Ongoing dissatisfaction with outdated facilities may lead to decreased member engagement and challenges in attracting new members. D. Risk of insurability: This would introduce significant financial risk to the membership. X. Next Steps The ideas, concepts, and costs presented in this white paper are part of the next step in the process. Once you provide your input, your Board will recommend what to do and how to fund it, and then a full member vote will occur. The steps in the comprehensive process to ensure member involvement and informed decision-making are as follows: A. Informal Informational Meetings—Prior to January 10th, informal meetings with membership will be offered, during which members of the Board and Committee will answer any questions about the white paper. B. Facility Tours: Clubhouse and Gatehouse Tours: In December and January, arrangements will be made so members can see areas of the facilities they don’t usually get to see firsthand . C. January 10 Member Meeting—This meeting is with the full membership to discuss the White Paper and introduce the Strategic Issues Survey. The Committee, the club architect, contractor, and McMahon Consulting will present information and answer questions before members complete the Strategic Issues Survey. D. Strategic Issues Survey: Following the Member Meeting, a Strategic Issues Survey will be issued for all members to complete. The survey will ask many questions to answer: What do you, as a member, want and support in terms of facilities? We want everyone’s input , as it will play a significant role in deciding what the final facilities improvement plan includes. E. Survey Results - The McMahon Group will tabulate and present the survey results to the membership in February, along with detailed information as

21

backup. The survey results, comments received, and ongoing membership discussions will help the Board decide on the next steps. XI. Conclusion Fiddlesticks Country Club prides itself on its premier golf courses, tennis, pickleball, bocce, and fitness facilities and its unique, low-density, welcoming membership culture. Addressing the outdated clubhouse and gatehouse is a matter of compliance and strategic investment in our future. By undertaking these projects, we would: A. Enhance Member Satisfaction: Provide modern facilities that meet and exceed member expectations as expressed in our Mission Statement. B. Attract New Members: Remain competitive to ensure a vibrant and financially sustainable community. C. Protect Our Investment: Safeguard and potentially increase property values within our community. Every successful business must avoid a "Kodak Moment." Just as Kodak failed to adapt to market trends and suffered the consequences, we must proactively address our facility needs to preserve our reputation as a premier club in Southwest Florida. Maintaining Fiddlesticks Pride: By working together, we can enhance Our Club, preserve our reputation and legacy, and ensure it remains a premier destination for current and future members. Call to Action The next steps in the process involve all members getting one answer: What do you, as a member, want and support in terms of facilities? Fiddlesticks is YOUR club and community; we cannot decide what to do without YOUR help and input. The survey will play a significant role in deciding the scope of the final facilities improvement plan. Your involvement ensures that the planning process is transparent and inclusive. Together, we can enhance Fiddlesticks Country Club for all members. We are endeavoring to strike the right balance between steadily advancing the facility improvement plan toward its conclusion and getting stuck in an endless discussion loop that leads to nothing getting done. We want careful deliberation and ample opportunity for everyone’s ideas to be heard. We do not want and cannot afford undue delay and hesitation.

22

The Board, acting on your behalf, will consider member input, cost, and all other factors and propose a plan for the membership to vote on. This will initiate the phase in which your ideas become new and improved facilities that will maintain Fiddlesticks Pride well into the future. Please attend the informal informational meetings and tours in December and January and the presentation/discussion with the full membership on January 10. Then, complete the Strategic Issues Survey as soon as possible so we can understand your priorities and shape the future of OUR CLUB together. Please contact the club’s office or any Board or Committee Member with any questions. Exhibits and Additional Resources Posted on the Club Website: • Long-Range Master Plan • Renderings of Possible Clubhouse Renovation

• Club Benchmarking Report • Articles on Industry Trends

o How Pickleball is Helping Save Golf in Naples, Florida o 2023 Private Clubs Trends and Reports from RSM o Building Value or Cutting Costs – Focus on the Facts

23

FIDDLESTICKS COUNTRY CLUB

White Paper Report FAQs

Frequently Asked Questions (FAQs) PLEASE NOTE—when a reference indicates "see exhibits," it refers to the List of Exhibits at the end of the White Paper. You will find the exhibits on the club website. 1. What is the goal of the Long-Range Facilities Planning Committee (Committee)? Answer: In 2016, the Fiddlesticks Country Club (FCC) Board of Directors tasked the Long-Range Facilities Planning Committee (Committee) with reviewing all facilities, excluding the golf courses, in order to anticipate future facility needs and develop a Long-Range Master Plan (Plan) for those facilities (see exhibits), including: A. Clubhouse B. Main gate (Gatehouse) C. Golf Maintenance Facility D. Cabana/pool E. Fitness/wellness center F. Tennis/pickleball courts G. Golf teaching/driving range H. Bocce courts While other needs will be considered in the future, this white paper focuses on the clubhouse and gatehouse, two of our oldest facilities.

2. Why is the clubhouse project necessary now? Answer: The project is essential due to several pressing factors: A. Protecting Our Investment:

1

i. The FCC community collectively holds over $500 million in member housing value. ii. The existing clubhouse does not adequately serve members and negatively affects the FCC experience and member value proposition. Maintaining high quality facilities is essential to protecting and enhancing property values and attracting new members to FCC. The clubhouse needs to be updated and meet current Florida Building Code standards. Deficienc ies include ADA compliance failures, outdated HVAC systems, inadequate fire protection, and insufficient wind resistance for hurricanes. ii. Renovations are needed to bring the buildings up to modern safety and regulatory standards and ensure the safety of members and staff. In early 2020, the estimated cost for a similar renovation was approximately $18 million. ii. Delays have significantly increased costs due to rising prices of construction materials, equipment, labor rates, and interest costs.

B. Building Code and Safety Issues: i.

C. Rising Costs Due to Delays: i.

 Construction prices are up significantly. In South Florida, construction prices have almost doubled. Contributing factors include:

inflation



 SWF is one of the hottest real estate markets in the country, as most homes have doubled in value.  Drastic Labor shortage – due to affordability challenges, the labor force is relocating from SWF.  Hurricane damage has increased demand for labor and materials, resulting in shortages and long lead times.

iii. Timely action is crucial to avoid further financial strain and ensure the safety and satisfaction of members.

2

3. FCC used to be THE premier country club in Southwest Florida (Collier and Lee counties). Does the Board believe FCC can no longer compete with premier clubs in Southwest Florida? Answer: The following are the current FCC Mission and Vision Statements: Mission: To exceed member expectations in all areas while preserving the premier lifestyle and camaraderie that embody Fiddlesticks Pride. Vision: To be the premier country club of choice in Southwest Florida. Twenty years ago, Fiddlesticks competed primarily with Collier County clubs such as The Club at Mediterra, Bonita Bay, Wilderness, and Pelican Bay. Since then, newer clubs like Shadow Wood, Bonita Bay, Wildcat Run, Miramar Lakes, Verandah, The Forest, The Plantation, and others throughout Lee County have emerged. Some clubs have invested or plan to invest $50–$100+ million in clubhouse-related renovations. Our consultants and Board believe that FCC does not need to match these expenditures to be competitive. They believe we can maintain our standing as a premier club by ensuring our golf courses surpass peer clubs and our non-golf facilities are on “par” for FCC to be the premier club of choice. In addition to superior golf courses, excellent racquet sports, and fitness programs, we have unique strengths that differentiate FCC . • Low member density • Unique membership culture enhanced because of our low density, supported by vibrant social programming. • Exceptional staff This belief is central to any facility improvement recommendations by the Committee and Board.

4. What are the major project renovation and expansion components? Answer: The possible conceptual design for the clubhouse and gatehouse renovation is estimated

to cost between $38 - $42 million, which includes: • Life/Safety and Code Compliance Upgrades:

3

o ADA Compliance: Ensuring handicap access throughout the facility. o Structural Upgrades: Reinforcing roof, walls, doors, foundation, and windows to meet current codes. o HVAC Improvements: Installing properly sized code compliant, code required air quality, and energy- efficient HVAC systems. Fire Protection: Overhaul fire protection systems as required . o Fire Alarm: Overhau l fire alarm systems as required o Fire Code Upgrades: Protecting roof with 1- hour rated fire lid, protecting all beams and columns with 1-hour rated fire wall, provide fire penetration protection between first and second floors to meet NFPA codes. o Electrical and Low Voltage: Overhaul all Electrical and Low Voltage systems as required by code. • Infrastructure Improvements: o Electrical and Plumbing: Modernizing systems to support current and future operations. o Vapor Barrier: Implementing proper vapor barriers to prevent moisture and mold issues. • Functional Improvements o Dining Experience:  Expanding Outdoor Dining: Increasing the number of outdoor seats from 15% to 50% (25% dedicated outdoor seats and 25% hybrid seats).  Upscale Casual Dining: Shifting the focus from formal to upscale casual dining while maintaining a quiet/formal dining area.  Larger Bar Areas: Increasing bar seating by 60%, from 15 to 24 seats. o Operational Upgrades:  New Kitchen: Relocating and expanding the kitchen for improved flow and efficiency.  Staff Facilities: The employee break room, including lockers and restrooms, will be located on the addition's first floor.

4

 Administrative Offices: A dministrative staff will move from the attic (which is not ADA compliant) to the accessible lower level of the addition.  Storage Space: Adding critically needed storage areas in the addition's first floor .  Member Locker Room: Providing comparable facilities for men and women on the main level.  Private Dining Options: Creating private dining spaces with mobile walls and a small private dining room.  Expanded Function Room: Increasing capacity to accommodate growing event participation. (See FAQ#8)  Increasing bar seating (60%) from15 – 24 seats and providing private dining space. • Accessibility Improvements: o Improved Access: Enhancing access ( including elevator) from the lower level pro shop/cart drop- off area to the main level. o Parking and Road Improvements: Parking lots and roadways will be adjusted to improve traffic flow and provide additional golf cart parking and undercover cart parking for inclement weather. • Gatehouse Renovation ($2.6 - $3.1 million): o First Impression: The gatehouse is the first point of contact and must reflect our community's quality and security. o Security Enhancements: o Member Amenities:  Wine Lockers: Offering wine storage options for members.

 New Building: Constructing a new gatehouse to meet modern safety and operational standards.  Improved Safety and Traffic Flow : The entrance gates will be repositioned to allow vehicles denied entry to turn around without entering the property. Roadways will be sized to meet current DOT

5

standards. This will allow members stuck behind long lines to easily access the member gate. o Facilities Upgrades: Adding a roofed visitor lane for weather protection, restroom facilities, and space for emergency vehicles.

The $3.1 million includes.



Building structure -$850,000



 Site costs (including water, sewer, electrical, roadway improvements, and internet connections) – $925,000.  Soft costs (permitting, design fees, equipment, furniture, and fixtures)– $610,000.

 Escalation and contingency – $710,000

 It is important to note that the back gate, which has no building and limited security equipment, cost $656,000 in 2022.

5. Why must we gut the clubhouse to make life/safety building code changes? Answer: Gutting the building is essential due to the comprehensive nature of the required upgrades: • Comprehensive Compliance: o The Florida Building Code is updated every three years and mandates extensive modifications to ensure safety and accessibility. o The building code requires that the facility be brought into compliance when a major renovation is undertaken, necessitating returning the building to studs and exterior walls. o This process is extremely costly in an existing building remodel and can only be efficiently built and inspected in a total gut scenario. o Deficiencies affect fundamental structural elements such as columns, beams, flooring, and roofing, all of which must be fire -rated and compliant with current standards. o Partial renovations would not adequately address these critical areas, potentially leaving safety gaps.

6