The city of Cape Coral, Fla. will soon begin contract negotiations with Troon Golf to manage the Coral Oaks Golf Course. The golf course has been losing money for the city as revenues from the golf course have not been able to keep up with expenditures over the past four years.

Troon Golf is being called upon to manage the city-owned Coral Oaks Golf Course in Cape Coral, Fla.

City Manager Michael Ilczyszyn said contract negotiations with Troon will start soon, the Fort Myers News-Press reported.

The golf course has been losing money for the city. Over the past four years, revenues from the golf course have not been able to keep up with expenditures, the News-Press reported. According to city documents, the city needed an additional $428,611 to cover expenses in fiscal year 2022, and a year prior, needed an additional $100,000.

In January, the city council agreed to request proposals for the golf course, the News-Press reported. Proposals were issued and received during the summer, and an evaluation committee was established and ranked them in September.

The other entities that put in a proposal to manage the golf course were Paradigm Golf Management Inc., Bobby Jones Links, and SSS Down to Earth OPCO LLC, the News-Press reported. Financial Director Mark Mason said all of the organizations have the ability to operate the golf course with their own staff but differ on monetary approach.

Several proposals included different forms of management or contracts, the News-Press reported.

Full management: Revenues and expenditures would remain with the city, and the city would pay a management fee but would have a profit share agreement.

Licensing: The licensee would retain all revenues and expenses, and share net profit/set aside a percentage of revenue dedicated toward facility improvements.

Lease agreement: Lessee holds exclusive responsibility for all operations and retains both revenue and expenditures while paying the city a lease fee and sharing the profit. This would be similar to existing lease agreements the city approved for Sun Splash Family Waterpark and the Boathouse Tiki Bar & Grill restaurant.

Staff scored Troon Golf as the highest of the proposals and recommended a five-year initial contract for full management that would operate with an annual budget, marketing, and operation plan approved by the city council, the News-Press reported.

A monthly management fee of $10,000, which includes accounting services and a 2.5% consumer price index increase each year, will be paid to the company, the News-Press reported. The terms to the company also include a reimbursement of up to $6,000 for travel expenditures annually and an incentive fee of a 10% annual increase in earnings or a 7.5% annual increase in total revenue from prior revenue – whichever the city prefers.

Councilmember Tom Hayden who was staunchly against outsourcing the course in the past said he changed his mind after witnessing Hurricane Ian and the continued deterioration of the golf course, the News-Press reported.

“This particular amenity is something very important to me,” Hayden said. “I started to shift my position that maybe we weren’t the right people to manage this golf course.”

Hayden sees the golf course desperately in need of maintenance, the News-Press reported.

“A couple of years ago when all this started, I saw what was happening in there that it needed a new irrigation system,” Hayden said.

Hayden estimates it would cost $1 million for a new irrigation system and require additional work, the News-Press reported.

“It needs a complete green rebuild if you are going to do that,” Hayden added.

He favored Troon Golf. “As we see growth in the next big part of our city, in the north, more people are going to want to utilize that facility, and I believe this particular company puts us in the best position to move forward with our growth.”

He also wants to see current activities, like golf tournaments, leagues, and children’s programs, continue as is, the News-Press reported, as well as the current employees staying on with their current salaries.

Mason said Troon will keep the 14 employees working at Coral Oaks employed, the News-Press reported.

“If the city council determines to outsource the management of the golf course, then by any of the methods, the city manager is committed to replacing the full-time employees in equivalent roles in the organization,” Mason said.

Mayor John Gunter agreed with Hayden and said the city shouldn’t be managing amenities like water parks or golf courses, the News-Press reported.

Mason said the management option is the most taken route for golf courses, but said the lease option would be explored and negotiated with the company, the News-Press reported.

Councilmember Robert Welsh was the sole voice on the council who wanted to keep management in-house, the News-Press reported.

“We’ve opened this can of worms every single year I’ve been sitting on this council, and I don’t think my decision has changed,” Welsh said. “We decided to put money into it, we are making it better, and I think we need to stay the course we’ve been staying and try to fix something that’s not broken.”

A committee of the whole meeting will take place in the future to discuss a negotiated agreement, the News-Press reported. Once the contract is agreed to, it will take three months for it to take effect, possibly by January 2024.