The dues feud: in downtown Raleigh, the nation's two largest city-club operators compete for the privilege of membership.

• Author: Bailey, David
• Position: Club International Corp. and Club Development Interests; includes related article

His flight from Dallas to Vancouver had been late. Still, Thomas Bennison thought he could catch enough sleep to be sharp for the next day's consulting job.

But Edward Bagwell, developer of First Union Capital Center in downtown Raleigh, just couldn't wait. He was on the phone by 8:30 a.m. - a red-eyed 5:30 in Bennison's hotel room in British Columbia. "I had just gone to sleep," Club Development Interests' partner in charge of city-club acquisition recalls, "and two-and-a-half hours later, the phone rings and he wants to talk deal."

Bagwell, president and owner of Columbia, S.C.-based Southwind Ltd., said that he'd visited Dallas-based CDI's new University Club in Durham and wanted a similar one atop the 29-story tower he was building.

"He had a vision that Raleigh needed a first-class office building downtown with all the amenities," Bennison says. "That meant including a private city club in there." There was just one problem: Raleigh already had a successful downtown club that had been an elite meeting place for a decade.

Bennison's wake-up call came on April 22, 1989. The very next Friday, he says, "we conceptually agreed on a deal - literally the first time we sat down together."

The October opening of the $3 million-plus Cardinal Club pitted two of the biggest U.S. club developers against one another - CDI and Club Corporation International. But a month after opening, the new club had only about 380 members, compared with 2,600 at the Capital City Club.

"We don't see any way with 400 members they can make it," says Albert Martell, ClubCorp's regional manager. "What do I think's going to happen? I think they're going to come to us or some club operator and try to salvage the club."

That doesn't mean ClubCorp, also based in Dallas, isn't pulling out all the stops to attract - and retain - members. Even before the Cardinal Club opened in October, ClubCorp announced it would spend $1 million to spruce up its 12-year-old club.

Meanwhile, the Cardinal Club has no alternative but to sit back and wait for members to recruit friends and associates.

Bagwell and CDI officials insist that they're not worried. Downtown Raleigh is big enough for two clubs, they say, especially if one offers fine furnishings and world-class cuisine.

ClubCorp officials counter that North Carolinians care more about who's eating with them than what's set before them. "Raleigh's not Charlotte," says Edward Simpkins, the Capital City Club's interim manager. "It's not as cosmopolitan and doesn't have the same taste quotient."

"It's a totally different downtown from Charlotte," says Tony Crumbley, director of research for the Charlotte Chamber." As the third-largest financial center in the U.S. [in terms of banking assets], Charlotte has significantly more professional employees, whose corporations are willing to pay their initiation fees and dues."

ClubCorp came to Raleigh in 1979 as the Center Plaza Building was rising and the venerable Raleigh City Club, then atop the Sir Walter Hotel, was closing.

The 13,000-square-foot Capital City Club cost $1 million to outfit, and it was a hit almost at once. Among its 800 members, who paid $400 apiece to join, were newspaper publisher Frank Daniels Jr., Belk stores partner Karl G. Hudson Jr., Carolina Power & Light CEO Sherwood Smith Jr., then-mayor G. Smedes York and former Gov. Dan K. Moore. ClubCorp management made sure the press knew that its membership included blacks...