The Detroit City Council broke an earlier deadlock to award a two-year contract for the Chandler Park, Rackham and Rouge Park courses to a new management firm, Signet Golf Associates II. In Brevard County, Fla., commissioners took steps to continue with the transfer of The Savannahs course on Merritt Island to a homeowners’ association, and of The Habitat and Spessard Holland courses to a new non-profit organization of local residents called Golf Brevard.
The destiny of several municipal golf courses in Detroit, Mich. and Brevard County, Fla. became clearer with decisions announced on March 20.
As reported by C&RB on March 20 (http://clubandresortbusiness.com/2018/03/new-vote-scheduled-determine-fate-three-municipal-courses-detroit/), the city council of Detroit was scheduled to vote on a new management-firm arrangement for three city courses (Chandler Park, Rackham and Rouge Park). That vote was taken, The Detroit News reported, with a 5-4 decision that will now allow a new management company, Signet Golf Associates II of Pinehurst, N.C., to oversee those courses for the next two years.
The three courses are expected to be open in time for the golfing season after the council approved the $180,000 contract, the News reported. Leading up to the vote, there had been an announcement by city officials that the courses would close on March 23 after a contract with the previous management firm, Oakland Township (Mich.)-based Vargo Golf Co., ended.
City spokesman John Roach said the golf courses will now open at their regular time, which is typically in mid-April, the News reported.
Councilman Scott Benson, who was absent for a previous vote that ended in a 4-4 deadlock, cast the deciding vote to award the contract to Signet Golf, the News reported.
Council President Brenda Jones, who cast one of the “no” votes, criticized the city for not including Detroit’s golf advisory board in the decision to select Signet, noting that the advisory board did not believe Signet was the most qualified bidder, the News reported.
“I don’t know why we put people in place if we are not going to listen to the advice that they give us,” Jones said.
Glenn Pulice, a member of the golf advisory board and 31-year PGA professional who currently works out of the Royal Oak (Mich.) Golf Center, told the News that he believed the city was not transparent with its selection of Signet.
Signet, he said, was not the most qualified bidder, because other contenders managed more golf courses of a similar size and scope as those in Detroit.
“The city acted before I could give any input,” said Pulice. “It has not been fair, it has not been transparent.”
Council President Pro-Tem Mary Sheffield, who cast one of the “yes” votes, said that while she agreed with some council members’ concerns about the selection process, it was important to pass a contract to keep the courses open, the News reported.
“It’s not the best contract,” Sheffield said. “ But at the end of the day we do have a situation right now where we can see golfers not being able to golf this season.”
Another council member who voted “no,” Janee Ayers, said she remains concerned with a potential conflict of interest because a Signet associate, Sirius Golf Advisors, was involved in the National Golf Foundation study on city courses, possibly giving the company an advantage over others bidding on a contract.
“That in itself leaves too much open space for impropriety in my opinion,” Ayers said.
The city’s Office of Contracting and Procurement led a six-month process to select a company that could manage the three city courses, the News reported. City administrators had not planned to extend Vargo Golf’s contract, voicing concerns about the conditions of the courses under its oversight. The Rackham course is a Donald Ross design
Vargo Golf’s owner, Robert Vargo, went before council before the March 20 vote and thanked the council members who rejected Signet, the News reported. He said Signet should not have won the contract.
“The fair-and-just system will be challenged,” Vargo said. “I will guarantee that, because this was a sham.”
Even though the Vargo Golf bid was higher by $15,000 per year, the city would have saved money by renewing its contract, Vargo said, because his company already has the equipment and expertise for running operations at the courses,
There will also likely be a delay in alcohol sales at the golf courses this summer, because it takes at least three months to transfer the liquor licenses, Vargo added.
“My staff worked to make sure those courses were in good shape,” he said. “It would have been a seamless transition for the city.”
Peter Dejak, owner of Signet Golf Associates II, had said in a previous interview that he plans to engage the local community with the golf courses and promote a “Golf Detroit” logo, the News reported.
“We’ve met with a lot of local groups and they are very excited about working with us,” Dejak said. “Our goal was to create that Detroit identity and also work on improving the golf courses and building up revenue.”
Signet Golf Associates II currently owns two golf courses, the News reported: Redbridge Golf Course in Locust, N.C. and Tempest Golf Club in Gladewater, Texas, and Dejak told the News that the firm has been able to double the revenue at Redbrige through marketing to more people.
“With our smaller company, we are very hands-on,” Dejak said.
Florida Today reported that three golf courses in Brevard County, Fla.—The Savannahs on Merritt Island, The Habitat in Grant-Valkaria and Spessard Holland, which is south of Melbourne Beach—will be out of the county’s hands by October.
C&RB reported earlier in March on the deals that were in the works for the courses (http://clubandresortbusiness.com/2018/03/brevard-county-fla-nearing-deals-three-golf-courses/) and on March 20, Florida Today reported, county commissioners on voted 4-1 to approve transferring The Savannahs course to The Savannahs at Sykes Creek Homeowners’ Association (HOA).
Interim Assistant Brevard County Manager Jim Liesenfelt said he hopes this transfer could take place by May 1, Florida Today reported.
Separately, Florida Today reported, the commissioners voted 5-0 to work toward reaching a deal to transfer operation of The Habitat and Spessard Holland to a new nonprofit organization of local residents called Golf Brevard.
“It’s very exciting,” County Commission Chair Rita Pritchett said, referring to the county being poised to get out of golf course operations.
The golf course business has proved to be a financial strain for the county and its Parks and Recreation Department, Florida Today reported.
Under the revised offer that was presented on March 20 by Sonia Bosinger, an attorney for The Savannahs at Sykes Creek Homeowners’ Association, The Savannahs golf course would revert to the homeowners’ association, and a newly formed community development district would lease the golf course property from the association for at least 25 years, Florida Today reported.
- Brevard County would pay the community development district $700,000 to cover deferred maintenance on the course, in two annual payments of $350,000, Florida Today That was down from a previous offer that had been discussed, through which the county would pay the community development district $960,000 in three annual payments of $320,000.
- Under the arrangement approved by the commissioners, Brevard County would provide the community development district a $1.2 million line of credit for use in golf course operations, and capital improvements with a fixed interest rate of 2.75 percent to be repaid over 15 years, Florida Today The interest rate was raised from a previous offer of 1.25 percent.
- The community development district would be able to draw from the line of credit for 24 months after the loan closes, and the homeowners’ association would obtain what’s known as a “surety bond” to collateralize the line of credit, Florida Today assuring that the county would get its money back.
In a newly added provision, the HOA agreed not to sell the golf course property for at least 10 years or until money from the line of credit is paid in full, whichever term is longer, Florida Today reported. If the golf course fails financially, however, the HOA would have the right to sell the course, subject to county zoning rules.
Golf Brevard’s proposal for The Habitat and Spessard Holland was presented to the county commissioners by Tom Becker of Indialantic, who chairs the 10-member Golf Brevard Steering Committee, Details fo the proposal included these provisions, Florida Today reported:
- The county would assist Golf Brevard with transition costs, deferred maintenance and potential losses totaling $250,000. Of that, $100,000 would be paid by November 1, with the balance of $150,000 paid by December 27.
- Golf Brevard would start to repay the county’s initial transition fund of $250,000 when the nonprofit’s financial reserves reach $360,000.
- Golf Brevard also dropped its initial request for a $200,000 line of credit.
- Becker said Golf Brevard would work with county staff to finalize the deal so Golf Brevard could take over operation of the courses no later than October 1.
- Becker added, though, that he didn’t want to rush the process, to assure that a smooth transition of the courses takes place.
- Golf Brevard first wants to line up a manager of golf operations for the courses, Becker said.
The county had an unsatisfactory experience with a management firm of its own, Florida Today noted, when Integrity Golf Co. LLC took over operations of the three courses, starting on February 1, 2016, but then notified the county that it was terminating the management agreements, effective July 30, 2017, because it was losing money on the operation. (http://clubandresortbusiness.com/2017/07/integrity-golf-ends-agreements-three-brevard-county-fla-courses/).
International Golf Maintenance Inc. was then contracted to temporarily provide operation and maintenance services for the three courses while the County Commission considered its long-term options. And in October 2017, Florida Today reported, commissioners in directed the county attorney’s office to begin legal action against Integrity, for its alleged breach of its 10-year agreement.
Brevard County Manager Frank Abbate said the county would aim to have the deal with Golf Brevard completed by August or September, Florida Today reported.
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