The Prince Of Pinehurst

Pinehurst is a company town. Always has been. Tucked into the sandhills of south-central North Carolina, this hamlet sprung wholly formed from the imagination of James W. Tufts, the ambitious son of a Boston blacksmith. By the time he was in his early 20s, Tufts owned one of the first chains of pharmacies in the country, and he conceived Pinehurst as a place where those suffering from tuberculosis could recuperate in the glorious sunshine and pine-scented air. Working from a blueprint by Frederick Law Olmsted, the celebrated architect who had designed New York City's Central Park, Tufts built the place in six months in 1895. Believing that outdoor exercise was vital to good health, he hired the Scotsman Donald Ross to build a golf course for his guests, and in 1899 Pinehurst No. 1 was opened. Ross officially became the head pro in 1900, and seven years later he completed his masterwork, No. 2, the course that would make Pinehurst famous. By 1923 the Pinehurst Resort was foremost a golf destination, boasting four Ross courses and three thriving inns, and it shaped the local economy to such a degree that during the Depression, resort employees were paid in script, redeemable only at the myriad businesses owned by the Tufts family.

For 75 years a Tufts gently guided Pinehurst—the resort and by extension the village—until 1970, when James's three grandsons sold out to real estate mogul Malcom McLean, a Philistine who lined the courses with condos and tried to modernize the look of Ross's work. Lacking the kind of patriarchal leadership that had characterized its growth, the resort foundered, and in 1982 its neglected golf courses and sagging hotels were turned over to a consortium of eight banks. Two years later the resort was sold to a wily entrepreneur, Robert H. Dedman Sr., and for a while it seemed as though Pinehurst was witnessing the second coming of James Tufts.

Dedman, too, was an embodiment of the American Dream. He had risen from the abject poverty of the Arkansas backwoods to a snug position among golf's aristocracy. By 1984 his company, ClubCorp of America, had quietly become a force in the industry. Today ClubCorp owns and operates 234—and counting—private clubs and resorts, and Dedman has been listed among the wealthiest men in the world, with an estimated net worth of $1.2 billion, easily making him the richest person in golf. In Pinehurst, Dedman saw not only a priceless business opportunity, but also the chance to create his legacy. "The first time I stood in front of the clubhouse and looked out on all those ribbons of fairway, I got tears in my eyes," he says. "I had always venerated Pinehurst for its place in the history of golf, and when I finally saw it I knew instantly that we would take this fallen angel and make it not as good as it was, but better than it had ever been."

Fifteen years and $100 million later, Dedman, 73, has realized not only his grandiose vision, but also that of the Tufts family, which from the beginning had marketed Pinehurst as the St. Andrews of the New World. When No. 2 hosts the U.S. Open next week, it will be "the ultimate crowning of a long list of achievements," Dedman says.

Under ClubCorp the resort has added two courses—Rees Jones's No. 7 and Tom Fazio's acclaimed No. 8—and is in the process of restoring No. 4. ClubCorp has also renovated the 220-room Carolina Hotel, the registered national historic landmark that is the heart of the resort, and in April reopened Pinehurst's original inn, the Holly, which had been left for the pigeons by the previous ownership. Since 1984 the population of Pinehurst has more than quadrupled, to 8,200, and real estate has gotten so valuable that from 1995 to '97 the village's property taxes doubled. With the Open putting an exclamation point on all this growth and prosperity, Dedman should be enjoying the kind of canonization accorded James Tufts as well as his benevolent grandson, Richard Tufts, who ran the resort from 1935 to '62 and remains the most beloved figure in Pinehurst history. Dedman's, however, is a more muddled legacy.

"Dedman is an extremely unpopular figure in these parts," says Jack Glynn, Pinehurst's mayor pro tern. "Talk about arrogance. His company is seen as a bunch of bullies who are used to getting their way, through economic coercion and legalistic harassment. The overwhelming feeling here is that they take advantage of every opportunity to exploit the residents, and Dedman is recognized as the fellow who has called the shots on all of it." Glynn is referring to a series of heavy-handed p.r. blunders and bloody lawsuits that have stained Dedman's and ClubCorp's reputations in the Pinehurst area, perhaps irrevocably.

Since 1991 ClubCorp has been fending off a class-action suit from the members of Pinehurst Country Club, who allege that ClubCorp has denied them sufficient access to tee times and improperly raised their dues. (Pinehurst's 5,500 members pay an intiation fee of $15,000, plus $2,040 in annual dues to play Nos. 1 through 6, which are open to resort guests as well.) Late last year ClubCorp settled a lawsuit brought by its partner in the ownership of neighboring Pinewild Country Club, which alleged fraud and mismanagement, among a laundry list of charges. The suit, initiated in April 1996, reached such a bitter tenor that a private detective employed by Pinewild was quoted in The State, a Columbia, S.C., newspaper, saying that Dedman and his company were "a bunch of backstabbing, corkscrewing, double-dealing, lying, cheating, stealing sons of bitches." (ClubCorp eventually sued the detective, Bill Graham, and Tohato Inc., the Japanese company that co-owned Pinewild, for libel. The suit was folded into a seven-figure settlement paid by Tohato to ClubCorp.) The Pinewild affair spawned a double whammy of high-profile articles unflattering, to say the least, for ClubCorp—a Wall Street Journal piece in May 1998 and, less than a month later, a 3,500-word opus that made the front page of The New York Times business section. The stories dug up plenty of details from other lawsuits that have pitted ClubCorp against its members throughout the country.

All of this might have been dismissed as merely hard-nosed business practices had ClubCorp not started picking on the little people of Pinehurst. In November 1995 a 69-year-old village resident, Edmund Dietrich, wrote a letter to the editor of the local paper, The Pilot of nearby Southern Pines, in which he said that tips given to resort employees were being withheld. The company slapped Dietrich with a lawsuit for libel. (The suit was dropped.) More damning still, in March of this year it came to light that ClubCorp had threatened local businesses with trademark infringement for using the word Pinehurst in their company names. ClubCorp took the position that Pinehurst referred only to the resort's golf courses and facilities, and not in any way to the town itself, which was incorporated in 1980 as the Village of Pinehurst. ClubCorp's lawyer on the case, Stephen Trattner of Washington, D.C., went so far as to tell The Pilot, "I don't believe there is a Pinehurst, N.C. You may call it that, and the mail may get there that way, [but] you don't live in Pinehurst. You live in the Village of Pinehurst." Over 100 concerned calls to the local post office followed, as did a series of critical editorials, a flood of venomous letters to the editor and a crystallization of public opinion.

Being pressed on these issues annoys Dedman, who ordinarily radiates warmth and gentility. "Discussion of these matters is highly pernicious," he says. "It's like discussing the chastity of your wife. There is no way to win. You must look at the larger picture. These are temporary pimples on Elizabeth Taylor's face, obscuring the beauty. What we have done in Pinehurst is a beautiful thing."

To be sure, Pinehurst's courses, No. 2 in particular, have never been better, and the hotels have reached unprecedented levels of spiffiness. But there is more to Pinehurst than the happy face put on by the resort.