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Business Observer Thursday, Apr. 23, 2009 13 years ago

Act III: Beautiful Comeback

In the competitive world of golf resorts, an acclaimed violinist turned cable TV executive turned hospitality mogul is betting big on the Gulf Coast.
by: Mark Gordon Managing Editor

In the competitive world of golf resorts, an acclaimed violinist turned cable TV executive turned hospitality mogul is betting big on the Gulf Coast. 'I'm not letting the economy daunt me at all,' says Sheila Johnson.

Sheila Johnson has been called America's first female black billionaire — a term she neither confirms nor denies, only to say she disdains it — so when she showed up at the Westin Innisbrook Resort in early 2007, a palatable panting hung in the air.

The club, in Palm Harbor, was on the verge of bankruptcy due to years of inaction while nearby competitors underwent renovations and upgrades. Many of the club's several hundred employees saw Johnson, the co-founder of the BET cable
TV network, an owner of three professional sports teams and, most importantly, the founder of a budding high-end resort company, as Innisbrook's savior.

“You could see it in their eyes,” says Johnson, recalling the tour she took of the facility. “They were saying 'please come back.'”

She did.

Indeed, Johnson came back with $35 million, backed by Middleburg, Va.-based Salamander Hospitality. The company, which Johnson founded in 2005, bought Innisbrook from Charleston, S.C.-based Golf Trust of America in July 2007. The club was already well known in national pro golf circles for its annual PODS Championship event.

The purchase was something of a steal considering similar sized resorts and golf clubs, with a course good enough for the PGA Tour, were worth at least double the Innisbrook sale price. But it was a risk, too, it was clear by the summer of 2007 that the housing boom was certain to be a bubble.

“I was absolutely stunned at the beauty of the place, but disappointed in the neglect,” says Johnson, during a recent interview with the Review at Innisbrook. “I call it my little 'fixer-upper.”

From Johnson's view, there was a lot to fix at the club, which covers 900 acres and includes a full-service 620-room resort and condo facility. Salamander has since pumped $25 million into Innisbrook, on everything from repainting the fitness gyms to building a 12,000-square-foot luxury spa to renovating the restaurants.

The various projects, most of which were completed last year, had a coming-out party in late January during Super Bowl week in Tampa. That is when Johnson hosted a big-ticket soiree in the renovated Osprey Clubhouse. Pittsburgh
Steelers owner Dan Rooney and Condoleezza Rice were among the guests.

Parties with dignitaries and multimillion-dollar renovations sounds like a pleasant dream compared against the backdrop of the gloomy recession. And while the resort industry is anything but recession-proof, Johnson, 59, has brought a brand of savvy self-determination to Innisrbook, not to mention her hefty financial wherewithal.

Says Johnson: “I'm not letting the economy daunt me at all.”

Focal point
Johnson, who lives in Virginia but keeps a condo on the Innisbrook grounds, returned to the club in mid-March during the PGA Transitions Championship event. (Clearwater-based PODS dropped its tournament sponsorship last year).

Between interviews with the likes of NBC Sports' Jimmy Roberts, Johnson stopped to serve hamburgers to the professional golfers coming off the course.

Johnson says she has no regrets about the Innisbrook purchase even though it came on the cusp of the economic downturn, which has hit the club hard in at least one key area: Sponsorships. Even with Pinellas Park-based eye care company Transitions Optical replacing PODS as the tournament's name sponsor, the overall amount of sponsors for the most recent event — and the amount each sponsor is paying — is down significantly.

For instance, says Johnson, companies that were putting up $100,000 or more in past years scaled back to $10,000 and $20,000 sponsorship deals this year. Other sponsors just dropped out.

But when Johnson bought Innisbrook, she was thinking about more than one week of golf.

Johnson says the main focal point she brought to the Innisbrook project was a commitment to be better and go further than any other club or resort in Florida. It's a mission she has honed in her other sports-business ventures, such as owning the Washington Mystics in the WNBA and having an ownership stake in the NBA's Washington Wizards and the NHL's Washington Capitals.

“As a female and minority owner, I'm going to be looked at by a lot of other owners,” says Johnson. “My standards have to be very high.”

Those standards translated to a detail-oriented renovation project at Innisbrook that was more like an upheaval. Improvements included:
• Adding new cart paths, bunkers, irrigation systems and trees to the resorts' four golf courses;
• Remodeling more than 65,000 square feet of meeting space, including what is now one of the largest exhibit halls in Pinellas County. Conference rooms are filled with high-end details, such as British-made Axminster carpets;
• Building two new 16-seat executive boardrooms, for use by club members and guests;
• Renovating Johnson's penthouse suite, a popular spot for corporate functions that overlooks the 18th hole of the course where the Transitions Championship is played;
• Implementing new restaurant and bar concepts in the resort's three clubhouses, including creating a village-style gathering place that doubles as a gourmet eatery called Market Salamander;
• Building the 12,000-square-foot spa, which features a dozen treatment rooms, a hair and nail salon and a retail center. The spa, next to the 4,000-square-foot fitness facility, also has outdoor treatment areas.

Resort executives also made a semantic change, past the cosmetics and aesthetics: It applied for and was granted permission from the U.S. Postal Service to change the name of the resort's location, from Palm Harbor to Innisbrook. Its 34684 zip code remains the same.

Johnson pre-approved each change, from the design of the blinds in the conference room to the color of the walls in the corporate suites. For such an accomplished executive, it's a counterintuitive move that goes against the rule of focusing on the big stuff.

But for Johnson, the daughter of a neurosurgeon and a musician, getting intricately involved in all details of a business project is the only way she has ever known.

“I can look at something and tell you right away what needs to get done,” says Johnson. “All I need is the best team to execute.”

A regrouping
The Innisbrook renovations, at least by the informal vote of some members, has been a success. “The attention to detail is obvious in just about every function,” says Evelyn Follit, a regular golfer and Innisbrook member.

Details are a key component at Salamander Hospitality, the centerpiece of what Johnson refers to as Act III of her life. Details have also been integral to Acts I and II.

The first act starts in the small Chicago suburb of Maywood, Ill. That is where Johnson grew up and found her first love: Music.

She took to the violin and quickly realized she could find a career in her passion. She practiced her passion, too, sometimes in the kitchen after midnight while the rest of her family slept.

What followed was a series of firsts: Johnson became one of the first black women to be accepted into a prestigious music program at the University of Illinois. She also became one of the school's first black cheerleaders.

Johnson would go on to tour the world, both as a violinist and music teacher. Highlights of her music career include playing for the Queen of Jordan, serving on the board of trustees of Carnegie Hall in New York City and working as a music instructor at the Sidwell Friends School, the famous Washington D.C. private school.

Johnson's second act was a play off the first act. While a student in college in the late 1960s, she met Robert Johnson. The couple would soon marry and by the early 1980s they had founded the BET cable network, the first large-scale channel to cater to African-American programming.

The network became a big success and the Johnsons ultimately sold it to cable giant Viacom in 2002 for more than $1 billion. But by then, their marriage had disintegrated and Sheila Johnson no longer held an active role in the company.

The couple divorced that same year.

“It didn't end well,” says Johnson, both on the marriage and her exit from the company. “I needed to regroup.”

The regrouping not only led to Act III, Salamander and Innisbrook, but to a series of partnerships that resulted in Johnson having an ownership stake in the trifecta of Washington professional sports teams. While the economy has made the business of sports trying at times, Johnson can rely on the perseverance and discipline skills she picked up from music 40 years ago.

“It's a struggle,” says Johnson, “but it's one of the most important things I've ever done.”

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