WV Executive

For lessons in business survival one should study the evolution of West Virginia’s flagship of tourism —The Greenbrier. The business, which began with a few cabins and an obscure white sulphur spring in 1778, has become one of the most impressive and renowned resort complexes in the world.

Making a business last and excel for 227 years and beyond requires visionary leadership, adroit management and the courage to change. A dose of luck now and then doesn’t hurt either. Over the years, The Greenbrier has had those ingredients and more in its recipe for success.

The First Century

During the resort’s first 100 years, a series of attentive owners and clever managers shared an intergenerational vision of making and keeping “The Greenbrier White Sulphur Springs” the most outstanding resort of the South. Remarkably, they attained that goal while dodging financial panics, changing tastes, the Civil War and a bankruptcy.

As for luck, the hotel was saved from the torch by a Yankee officer with sufficient nerve to defy his commander and a love of the place from his boyhood. In 1869, the railroad was placed by the resort’s front gate, and 100 years later the interstate highway system extended the same courtesy. To top it off, the United States decided to hide its congressional evacuation bunker under the hotel in 1958. As a result, the nation built a new wing on the hotel as well as an airport with the state’s longest runway.

By 1900, the resort could look back on a century that wound up adoring it. It was regarded by most of the traveling public of the day as without peer. When writing a feature for a 1878 issue of Harper’s Weekly, the country’s most popular periodical novelist and former Confederate officer, John Cooke, described the springs retreat as one of the most celebrated places in the world. After waxing for 22 pages, Cooke concluded his review by stating that the resort’s “celebrity was in its infancy.” Major Cooke was right, it was.

In 1910, The Chesapeake and Ohio (C&O) Railway purchased the hotel, the 6,500 acres that surrounded it and all of the property’s cottages. An astute C&O paid a meager $150,000 for the property, about $3 million in 2005 dollars. With the advance of science, the allure of healing springs had largely vaporized and the resort’s future was in doubt. No matter, C&O’s forward thinking management had a new plan.

The mineral bath spas of Europe were thriving, not because guests were drinking the water but because they swam and bathed in it. C&O’s idea for the resort’s famous mineral water was to create and market a European-style spa around it. Work began on the spa quickly building a magnificent indoor swimming pool as its principal visual feature. Hastily, a nine-hole golf course was built as a leading new attraction. Golf was getting underway in America, especially in conjunction with private clubs. The vision of a golf resort, complete with a European-style mineral spa on the side, crystallized fully when Charles Blair Macdonald (sic), the country’s original golf course architect, was hired to create a then state-of-the-art, 18-hole course.

To complement the anticipated appeal of a new golf course and spa and provide the resort with all-seasons accommodations, a splendid hotel was commissioned. Completed in 1913, it was christened “The Greenbrier.” Thus, in three years, the resort sped through a transition in which room capacity doubled, the drinking of sulphur spring water quietly slipped into retirement, a European style spa was created and golf was put to work. Today, we know that the C&O executives’ vision and implementation skills assured The Greenbrier business viability for the next century and beyond.

The Sporting Club

The newest chapter in The Greenbrier’s story of periodic reinvention is currently being written. It could be titled: “The Greenbrier Sporting Club, Ensuring Another Century or Two.”

The resort is enduring heightened pressure from a range of competitors, including an ever increasing number of luxury cruise ships, a significantly increased number of luxury hotels and resorts and the ubiquitous, interval ownership complexes. These competitors seek the affluent vacationer and strive for corporate conferences, both of which are The Greenbrier’s coveted clientele. Accordingly, the timing of The Sporting Club could hardly have been better.

Ambitious by any measure, The Sporting Club is probably the largest single real estate development in the state’s history in terms of its inflation adjusted economic effect. It is expected to generate more than one billion dollars for West Virginia in total impact.

In case you have not heard, The Greenbrier is developing 550 luxury lots and has already sold more than 350 of them. Most are now graced by grand houses and luxury “cottages,” each costing at least one million dollars and many costing several million. Sporting Club membership is attained through lot ownership. Members have unlimited access to any of the resort’s services and venues and to special amenities created exclusively for them, including a new, private golf course and handsome clubhouse.

While some appreciators of The Greenbrier dislike the construction of individually owned homes on the estate, The Sporting Club carries on a tradition of building private residences that dates to the beginning. In fact, the resort was exclusively a cottage colony prior to the construction of its first hotel, “The White Sulphur Springs Grand Hotel,” in 1858. A summer only, white-frame structure, it was nicknamed, “The White.” As it aged so did its name and it became “The Old White.” Still, after The White’s opening, cottage life remained a big part of the resort. A majority of the original cottages, some dating to the 1820s, have survived and many regular guests regard them as the resort’s most desirable accommodations.

In 1980, acting on a consultant’s report, the resort’s owner, by then known as CSX, concluded to again develop some of its real estate for individual home ownership. It was an in-house project that fell far short of expectations, producing the sale of only 37 parcels in 10 years. While unquestionably expert at operating hotels, dining rooms and golf courses, The Greenbrier management concluded that it did not have the skills necessary for the development of the resort’s real estate and the idea was indefinitely shelved.

Twenty years later, CSX decided to see if it could sell The Greenbrier’s real estate, and everything on it, in one big package. Offers that met the company’s expectations for the resort’s myriad structures and its immediate, parkland campus of about 1,000 acres were received from three viable suitors. However, each of the three valued the balance of the resort’s acreage at exactly zero. Further, they were inflexible on that valuation. In the end, CSX rejected all offers as unrealistic and took the property off the market.

Contracting Vision

Some months later The Greenbrier’s president and managing director, Ted Kleisner and his wife Karen, were considering the purchase of a vacation home in the South Carolina Lowcountry. The Kleisners visited Brays Island Plantation, a historic plantation property development near Beauford, and were impressed with the project’s careful design which included ample green-space as well as the adaptive reuse of an antique manor house. Later when visiting The Ford Plantation, another project in the area by the same developer, they were moved again by savvy planning and obvious historic and environmental preservation sensitivity.

As a result, Kleisner began contemplating a sweeping plan for The Greenbrier’s vast and gorgeous acreage. He also hoped that he had found the right partner in Dolan, Pollak and Schram, (DPS) with which to pursue his vision. After all, if DPS could work wonders in the Carolina Lowcountry, think what the firm could do with a private sporting club concept anchored by one of the world’s truly great resorts and surrounded by its lush mountain countryside.

Returning to White Sulphur Springs, Kleisner began negotiations with DPS. Eventually a preliminary agreement to pursue a luxury sporting club development at The Greenbrier was reached. Many details had to be worked out, not the least of which would be gaining the support of CSX’s deep thinking and watchful CEO, John Snow.

Snow, now the Secretary of the Treasury of the United States, listened to the description of what Kleisner believed was the best real estate deal he had ever seen. Kleisner reviewed the sporting club concept, the wisdom of partnering with experts in this new kind of development and the plan’s ability to quickly add 100 badly needed guest rooms to the resort’s inventory. Finally, Kleisner requested the establishment of a $10 million line of credit for The Greenbrier from which he would launch the effort. The latter may have been the most problematic segment of Kleisner’s plan since, by CSX edict, The Greenbrier never incurs debt.

The imaginative concept was accepted but there was little time for Kleisner to rejoice. The grand design now had to work. Its first test would occur as lots were developed to receive green-trimmed, white cottages on an elevated area known as Copeland Hill, near the resort’s West Virginia Wing.

Sweet Success

Pre-marketing went well and when the 35 Copeland Hill cottages were made available early in 2001, 57 buyers had already signed letters of intent to acquire them. At the close of business that day, all 35 had been sold for one million dollars each. The credit line was promptly paid off and has not been drawn on since. Kleisner’s Magnum Opus was off and running.

Larry Klein, who has managed The Greenbrier Sporting Club from the beginning, remembers the day as busy and exciting. “We didn’t know for sure how it would go and were very pleased to find ourselves immediately in the black,” Klein recalls.

To date, The Sporting Club has exceeded the most optimistic projections. Far more lots have been sold for far more money than was expected. The profits have easily funded the expenditures on facilities and improvements that now exceed $72 million. Standing aside from the spotlight, Kleisner, ever the gentleman, simply comments that “great partners can make all the difference in a business.”

It is regrettable that some who care deeply for The Greenbrier have been disappointed with aspects of The Sporting Club’s evolution, but such is to be expected during any period of significant change. Nevertheless, The Sporting Club will come in time to be recognized for its contribution to continuing the resort’s saga as much as it is for its houses and amenities. Because of its scale and quality, The Sporting Club will significantly impact The Greenbrier’s broader operations, helping ensure that this remarkable ornament to the state remains at the peak of quality overall and a leading employer well into the future. In its way and turn, The Greenbrier Sporting Club is just as important to the resort’s prosperity and evolution as the arrival of the railroad was in 1869 or golf’s introduction in 1910.