We spoke last month with Ron Tapp, the co-founder and chairman of the Portofino Club, and were left with the impression that it can be difficult right now to differentiate a non-equity club from its competitors.

Ron, who had been a worldwide managing partner at Andersen Consulting, launched the club in 2002, and grew it to 75 members by the end of 2004. 2005 saw growth slow, as result of this increased club competition (they added 12 members), but some changes to their membership plans and club structure have been made so Portofino is better able to compete in the now more crowded marketplace.

We liked the sound of some of Ron’s changes to his club structure – for example, he said that club membership agreements would reflect the commitment not to use the refundable portion of the membership deposit for club operations. In fact, those funds are transferred into a separate LLC that is used to acquire real estate – and they intend to acquire properties using about 60% cash, the rest debt. Again, sounds reasonable and on the conservative side.

Ron is hoping that in ‘06 the flexibility and family-orientation of his plans will attract members that cannot afford the membership deposit fees of Exclusive Resorts, Quintess, etc ($300K+). For example, his Infinity Plan is a $225,000 deposit, and annual dues of $25,000 – and allows any adult child over 25 (or parent) to use the club unaccompanied.

Portofino, with about 88 members, has passed that very early, “charter” phase, and Ron, as one of the co-founders, seems to understand the need not to leverage the business too aggressively, or to spend operating funds too quickly. This is important. He now faces the task of carving out a niche for his club, in what are still very early days in the evolution of this new category.