THORNHILL GOLF & COUNTRY CLUB Town Hall Meeting to be held at 7:00pm May 27th, 2014

OVERALL SUMMARY This Information Circular previews the Town Hall Meeting that will take place at the Club on Tuesday, May 27 at 7:00 p.m. The meeting will have two parts.

1. 2.

A review of the potential for development of our Yonge Street land. Presentation of a $5 million improvement concept for the clubhouse.

Potential for Development of the Yonge Street Property – Led by Club Directors Adrian Hartog and Neil Rodgers, a thorough review of potential uses of this 7.5 acre parcel of land has been carried out. The review has led to the following conclusions and recommendations: • • • • • •

The Club will have one opportunity to develop or sell the Yonge Street property and will want to be in a position to obtain maximum value for it. Changing present zoning of the property will be integral to maximizing its value. The process to change zoning and subsequently developing the property can be lengthy and complicated. 6 to 10 years has been estimated to complete this process. The Club will benefit from engaging professional support to guide it through this process and it is recommended we proceed. Maintaining control of the zoning change process is in the Club’s best interest, as it will leave the Club in a position to consider various options, once the new zoning is in place. The potential construction of a subway line to Richmond Hill is expected to impact the value of the Club’s Yonge Street property and should continue to be monitored.

$5 Million Improvement Concept – Reasons why an improvement concept is being recommended are as follows: • The Clubhouse facilities are deteriorating. • Membership levels are declining and potential members are expressing disinterest in join ing due to the limited range and condition of the Club’s overall facilities. • The Club’s financial health is affected by the declining membership base. • Prospective new members are joining other family oriented clubs like Donalda and Bay veiw ahead of Thornhill, regularly citing the lack of a swimming pool, fitness facility and the condition of the locker rooms as reasons. The $5 million plan is envisioned to address these deficiencies and provide a lift to our facilities for the next 6 to 10 years while zoning change is taking place on the Yonge Street property. The plan will also help Thornhill compete more effectively in the marketplace for family members interested in a broader menu of activities. It is recommended the $5 million improvement plan be funded by increasing the monthly capital charge for each member. The additional income that this will derive would be used to cover the monthly cost of a mortgage.



PRESIDENT’S MESSAGE Dear Fellow Member: For many years now, there have been numerous discussions pertaining to potential future uses of our Yonge Street property and our dated clubhouse facilities. This discussion has generated different concepts that have regularly followed a theme of obtaining a new clubhouse at little or no out of pocket cost, as part of the development of the Yonge Street property by third parties. These initiatives have inevitably stalled because of the capital cost and concerns over funding mechanisms, including selling all or part of the Yonge Street land. This inertia has led us to a point where our facilities are now out of date and not in favour with many prospective new family members who are joining elsewhere. The path we appear to be on is causing financial strain and if continued, will bring the sustainability of our operations into question. On May 27th, we want to begin a thoughtful conversation with the members of Thornhill as to how best to break this inertia. In preparation for the meeting, we have asked Adrian Hartog and Neil Rodgers to explain their findings as to how the Club might go about taking its Yonge Street property from the idea or concept stage to a position where ideas could be executed. Adrian and Neil are well-positioned to make this presentation. Adrian is a Partner in the Real Estate Group of Osler, Hoskin & Harcourt LLP and Neil is Vice President of Acquisitions and Land Development at Tribute Communities. We are indebted to these two members for the time and attention they have given this matter on behalf of us all. Conclusions and recommendations are listed on the preceding page under the title “Overall Summary”. They show that it will take the Club from 6 to 10 years to be in a position to potentially develop our land, with the objective of obtaining the maximum value for it. In the interim, we are recommending improvements be carried out to our present facilities so that members can continue to enjoy their Club experience in updated surroundings and that prospective family members are attracted to our Club where a mix of activities and updated amenities are appealing to them. We need an active and stable base of members to ensure the long-term viability of our Club. The $5 million plan that is presented in this Information Circular will be reviewed and discussed on May 27th, 2014. We will circulate a follow up survey to all members after the meeting to determine your response to the plan. I look forward to our Town Hall Meeting and hope to see you there. Sincerely, Joe Leeder, President

HIGHLIGHTS OF PROPOSED RENOVATION

Entry Vestibule and Inner Foyer

CONCEPTUAL EXTERIOR ELEVATION OF MAIN CLUBHOUSE ADDITION (ABOVE) AND PRO SHOP ELEVATION (BELOW)

• Improved Sense of Arrival and Inviting First Impression • New Wood Doors • New Finishes Including Stone Tile Flooring, Paint and Wallcovering • New Trophy Cases and Wall Panel Millwork

Pro Shop Renovation • Expanded Retail Area • Updated Exterior to Match Main Clubhouse for Unified Appearance

HIGHLIGHTS OF PROPOSED RENOVATION Men’s Locker Room Expansion • Expanded Locker Room Including: - Increased Locker Counts (~200 Additional Lockers) - Steam Room - Lounge Area • New Wood Lockers Throughout • Completely Updated Style and Finishes

Ladies’ Locker Room • New Wood Lockers Throughout • New Ladies’ Lounge • Decor Updates

EXAMPLES OF RENOVATED LOCKER ROOM GROOMING AREAS

EXAMPLES OF RENOVATED LOCKERS AND GROOMING STATIONS

HIGHLIGHTS OF PROPOSED RENOVATION New Fitness and Wellness Areas • New Dedicated Fitness Studio for Class Instruction • Improved Cardio and Stationary Weight Room • New Wellness Treatment Rooms • New Second Floor Restrooms

EXAMPLE OF FITNESS AND CARDIO ROOMS

Improved Access EXAMPLE OF A NEW WELLNESS ROOM

• New Elevator to Connect the Ground and Second Floor

Improved Operations • Full Kitchen Renovation for Improved Operations and Food and Beverage Offerings

EXAMPLE OF AN ELEVATOR

HIGHLIGHTS OF PROPOSED RENOVATION Pool Addition and Tennis Renovation • Features A New Outdoor Pool and a Cabana with Snack Shop, Dedicated Changerooms and Restroom Facilities • Year Round Tennis Facilities and Clay Courts • New Landscaping and Parking Lot Upgrades

EXISTING TRANSIT CONNECTION WALKWAY RESURFACED TENNIS COURTS TENNIS BUBBLE ZONE TENNIS FENCE TALL HEDGE TREES TO BE REMOVED

REPLACEMENT PARKING

12m x 24.5m POOL WITH .75m COPING POOL AREA TRELLIS

EXISTING SIDEWALK

TENNIS COURTYARD EXISTING TENNIS PAVILION APPROXIMATE TRCA REGULATION LIMIT RENOVATED PROSHOP

POOL CABANA 60m² EACH

SCREEN

TREES TO BE REMOVED

3m x 3m SPA

EXISTING HYDRO INFRASTRUCTURE

WALKWAY

RESHAPED CHIPPING GREEN

PLANTED PARKING LOT ISLAND

BURIED HYDRO LINE

PARKING SPOTS REMOVED: 57 ADDED: 68

TABLETOP ROAD SURFACE WALKWAY NEW CLUBHOUSE ADDITION

TABLETOP ROAD SURFACE

CONCEPTUAL SITE PLAN

TENNIS BUBBLE EXAMPLE

CONCEPTUAL POOL RENDERING

MAIN LEVEL PLAN

SECOND LEVEL PLAN

PROPOSED FUNDING MODEL

• • • •

$5 Million Mortgage The Club has obtained a Term Sheet from TD Bank Amortized over 20 years at prime +1% Member monthly capital fees to be doubled to service the debt

Our objective will be to accelerate payment of the mortgage through surplus funds generated from the new activities and from increased member participation. When the mortgage is retired we will reduce the monthly capital charge to each member. Increasing the capital fund is the recommended funding approach over an assessment. It requires a contribution from all members while they are active in the Club with payment ending when a member leaves the Club, or adjusting if a member moves into a different membership category. As new members join and use the Club, they would also contribute to mortgage payments through their monthly capital fees. The Board views this as a fairer approach for members of all ages and categories rather than levying members with an assessment.

QUESTION AND ANSWER Frequently Asked Questions – CLUBHOUSE IMPROVEMENT PROGRAM 1.

How do you envision the proposed Fitness and Wellness areas will function and integrate into the Club? The proposed addition of Fitness and Wellness areas will offer a variety of opportu- nities for all members. The studio will be used for aerobics, yoga, spinning and Pilates, as well as children’s afterschool and weekend activities like ballet and karate. Personal trainers will be available to guide members of all ages and levels of fitness through customized fitness programs. Wellness rooms are envisioned to offer services like massage, chiropractic, acupuncture, physiotherapy and nutritional counselling. We see opportunities to tie fitness programs to the sports of golf, tennis and curling and to link club menus to wellness through healthy eating choices.

2.

Why expand the Heather Room kitchen and improve the room when it wasn’t well used in 2013? We believe the room will be more regularly used by fitness users and from increased tennis and family traffic. Due to its proximity, the Heather kitchen will continue to provide food more efficiently to the Stanley Thompson Lounge than delivering food there from the main kitchen.

3.

Winter Tennis and the conversion of our four courts is not included in the budget? Why is this? The tennis project has been structured as a stand-alone project with $3,500 initiation fees collect ed for tennis to be used to fund the construction of the courts and winter air dome. Should there be a shortfall in funding, the Club may opt to top up the shortfall, but this will depend on the overall level of support for the proposal.

QUESTION AND ANSWER CONTINUED... 4.

Will the new facilities make money or add to our expenses? We have polled other clubs with fitness, winter tennis and swimming and have developed a sound understanding of their operating costs. Using conservative pricing and participation estimates, the new facilities will more than cover operating costs, as much of the labour component involves working with independent contractors. In addition, we believe the new facilities will increase membership levels.

5.

How do we know new members will be interested in the Club if we add fitness, swimming and winter tennis? The Club has engaged Global Golf Advisors (“GGA”) to complete a demographic and psychographic analysis of the local market area in order to determine if there is sufficient demand for the amenities being considered. Part of this analysis included comparing the local profile with the areas that have the highest concentration of existing members. Overall GGA’s analysis demonstrates a significant opportunity exists for new members within a three kilometer radial of the Club.

6.

Is $5 million adequate to cover all of the proposed additions to the Club? At this time, we have construction and design budgets that suggest we can cover the proposed plan for close to $5 million, including fees and a 5% contingency. We want to execute the plan well and should it prove difficult to keep within this overall budget objective, we will prioritize décor enhancements and phase these final elements through use of annual capital maintenance funds.



Is a 5% contingency enough? The bulk of the new construction portion of the project is for the swimming pool and the 2,300 square foot addition at the front of the club. As this space will primarily be used to expand the men’s locker room and add a fitness studio on the second floor, the nature of the construction will not be overly complicated. Beyond new construction, the remainder of the project mostly pertains to décor and cosmetic changes inside the clubhouse and we believe we’re carrying adequate amounts within the budget to fund them.

7.

8.

What are the anticipated dues and fees for swimming, winter tennis and fitness? At this stage, our primary objective is to determine the level of interest and support for adding these amenities to our Club. Fees will be set in due course, if there is interest in proceeding with the proposed new activities and will be competitive with fees charged at other private clubs in the GTA.

9. Have you looked at the option of doing nothing, while we consider the potential use of the Club’s Yonge Street property? The Club has investigated a do nothing option and has determined the following: • Membership attrition could potentially occur at an accelerated rate. The Club is currently losing potential new members to other clubs with modern amenities and family activities while natural attrition erodes the existing member base and active participation level. • If member attrition continues, existing member dues may need to increase to finance the operation among a smaller base of members or the overall operation of the Club may require rationalization. • If the Club were to find itself in a position to maximize the value of the Yonge Street property in the next 6 to 10 years, it remains to be established that the Club would take immediate action. The Club could well find itself a further 6 to 10 years behind the marketplace.