ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Sunday, December 17, 1995 TAG: 9512150056
SECTION: BUSINESS PAGE: G-2 EDITION: METRO
SOURCE: CHRIS HENSON SPECIAL TO THE ROANOKE TIMES
MEMO: ***CORRECTION***
Published correction ran on December 18, 1995.
The Jefferson Club has paid $113,000 a year in rent for its space in
the First Union Bank Building. A story in Sunday's Business section
included an incorrect figure.
Colin Tutt came to Roanoke in 1974 to open the Jefferson Club. He had opened and managed private clubs in Scotland, London, Bermuda, on the campus of Notre Dame, at Norfolk and Lynchburg.
He termed the Star City "extremely friendly" and "just the right size - big enough to be bustling and small enough to be personal," he said in a 1974 interview.
The Jefferson Club began as a venture owned by about a dozen Roanoke investors. Tutt was hired to oversee and manage operation of the new club.
The native Englishman pronounced Roanoke his new home saying, "This is the end of the trail," although after his retirement from the club's management a dozen years ago Tutt retired to St. Kitts, an island in the Caribbean.
When the club opened, in June 1975, it was 9,000 square feet of understated elegance, Georgian in decor but colorful. Vinyl wallcoverings, with contrasting patterns in each room, cut velvet loveseats in the hallways, and scattered English prints conveyed an atmosphere of hunt country.
There was the bust of Thomas Jefferson that still greets members as they walk off the elevator on the 16th floor of what's now the First Union Bank Building. Today, the bust is garnished for its last Christmas, quietly festive.
Tutt said he was proudest of the custom brass chandeliers and his low, comfortable dining chairs.
And he considered a membership of 700 to be optimum "to make the place pay." He felt a location at the top of "such a quality building" was perfect.
For the next eight years the club gathered members. "Eventually the investors got tired of having a tax write-off," said charter member Stuart Franklin Jr.
So, in October 1983, the Jefferson Club was sold to Club Corporation of America, a Dallas-based firm that operates private clubs worldwide and several resorts, including The Homestead in Bath County. The purchase price of the club was undisclosed, but Club Corp. reported investing $400,000 in renovations. It reopened in 1984 to a growing membership, and changing times in the Roanoke private club scene.
Despite being a private facility, the Jefferson Club has always been inclusively exclusive. It was part of a trend among city clubs, more oriented to members who needed a place to conduct business over meals than offering the social and sports facilities of a country club.
Opened at a time when many existing organizations still discriminated against women and racial or religious minorities, clubs such as the Jefferson opened their doors more widely.
In 1984 several high-level members of Roanoke's century-old Shenandoah Club left to join the Jefferson, citing the former's unwillingness to change policies that allegedly excluded blacks, Jews and women from its membership. The Shenandoah Club has since dropped those restrictions.
As part of its role as a place where business-oriented events happened, the Jefferson Club has been the meeting site for a number of civic organizations over the years. Groups such as the Rotary Club, the chamber of commerce, an association of secretaries and the Jaycees have used it for a meeting place. Law firms and companies have their names on some of the private meeting rooms, reflecting their level of use and support of the facilities. The club has been host to the last four Virginia governors, as well as a lot of its legislators.
In the advent of the "power lunch," the setting proved perfect for wheeling, dealing and impressing potential clients.
"I'm sure there were handshakes and deals made up there," said Doug Chittum, an economid development specialist for the city of Roanoke. "It got that reuptation because it's a private club and top business leaders were members. But I think it was more nearly one tool to help you do business."
The Jefferson Club "was one peice of that cultural pie" that helped convince industrial prospects that Ronaoke's "got a little bit of class" and is really a bigger, more sophisticated place than its 96,000-person population suggests, Chittum said. Outsiders who associate Roanoke with the hinterlands of Southwest Virginia were "extemely surpised to find we have a full complement of things" including a city club.
The club also was a popular spot for wedding receptions, company parties and prom dates, supplying consistent catering and panache.
"A lot of things besides power lunches happened there," said Ed Hall, a commercial real estate broker who was a member since the club's opening day. The closing means Roanoke "loses a place in the community," he said.
Despite that, on Nov. 7, I. B. Heinemann, chairman of the club's board of governors, sent a letter to the membership announcing that the Jefferson Club would be closing. He cited two reasons for dwindling revenues and memberships, that have made the closing necessary. "The tremendous change occurring in the business community and in our tax laws had had an adverse effect on our operations," he wrote.
A 1994 change in federal tax laws cut the portion of the price of a business meal that is tax deductible from 100 to 50 percent. At the same time, membership dues in private clubs are no longer deductible. Consequently, many companies across the country and in the Roanoke Valley decided to limit the number of club memberships they would buy for executives.
"The tax law changes have had a impact on city clubs in general," said Murray Siegel, a vice-president with Club Corp. "It really depends on the strength of the market." Siegel said he has never been to the Jefferson Club.
In addition, the departure of several top corporate officers from downtown Roanoke have decreased the demand for the Jefferson Club's facilities. First Union National Bank of Virginia, operating its regional headquarters in Roanoke, has fewer Jefferson Club members than did its predecessor, Dominion Bankshares Corp., which operated its corporate headquarters here, for example. And the move of Norfolk Southern Corp.'s top executives from Roanoke to Norfolk 13 years ago still is cited as having gutted the club's membership base. Downsizing within other businesses has hurt as well.
Last fall and again in June, the Jefferson Club launched membership drives, attempting to lure new members by waiving the $150 initiation fee and changing its menu. Membership dues were $75 a month for resident members and $35 for those living outside the area, in addition to the cost of meals.
"We had a number of board meetings trying to keep them involved," said Heinemann.
There were also attempts to reduce operating costs. "We spent a lot of time with the landlord here trying to figure out some flexibility with them," says Heinemann. At a rental rate of $13 per square foot, the Jefferson Club's rent on the full top floor of the First Union Bank Building is estimated at $1.2 million a year. The club, because of its kitchen, paid its own utilities, accounting for its rent below the $16 a square foot that the top floor of the building would command for an office user, said Hall, whose Hall and Associates Realtors manages the building for the owner, United Cos. of Bristol
Hall said it is unlikely that another club or restaurant will take the Jefferson Club's space. And because it is the top floor, it is premium space for offices. He said a national tenant is negotiating for about 7,000 square feet. Because no lease has been signed, he declined to identify the company but said he expects a deal within six months.
"We tried to work out some arrangements with Hunting Hills [Country Club] and some other clubs," Franklin said. But trying to work out win-win agreements with other local facilities, in order to offer members more activities, did not pan out.
As a subsidiary of Club Corp., the Jefferson Club is one of about 250 of the parent company's associate clubs. Now that it's closing, members are being offered special incentives to join the Piedmont Club, in Winston-Salem, N.C., which also is a Club Corp. operation.
"Membership in Club Corp. is a good deal," said Heinemann. "For the guy that travels, you can go anywhere, Chicago, New York, and be treated the same. Some members may want to join out of town, just to be able to do that to keep that membership."
There are other options as well. Hunting Hills Country Club, and the Roanoke Athletic Club, currently are both waiving initiation fees to Jefferson Club members. "The last I heard we've had about 20 or 30 members express interest," said Luke Campbell, club house manager of Hunting Hills.
Marilyn Montano, manager of the Roanoke Athletic Club said she hasn't noticed the tax laws effecting her membership so much. "We're here to fill in the void," she says. "We've gained some members from the closing."
Russ Curtis, the Jefferson Club's manager for the past year and a half won't speculate on what his former members will do. "That's up to their individual needs," he said.
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