The Rackham, Rouge Park and Chandler Park courses are scheduled to close on March 23 if a new operating agreement isn’t in place, but city council is now reconsidering whether to award a contract to a new management firm, Signet Golf Associates II. The courses have been operated by Vargo Golf Co., which also holds liquor licenses and owns golf carts used at the properties, for seven years.
The Detroit (Mich.) City Council was expected on March 20th to reconsider a contract for private management of three municipal golf courses that will close on March 23rd if a new operating agreement isn’t in place, Crain’s Detroit Business reported.
Last week, City Council deadlocked on a 4-4 vote over a recommendation by Mayor Mike Duggan administration’s that Pinehurst, N.C.-based Signet Golf Associates II be awarded a $90,000 annual contract to operate the Rackham, Rouge Park and Chandler Park golf courses, Crain’s Detroit Business reported.
Duggan’s administration immediately reacted to the council’s failed vote by warning that the golf courses would close Friday after a contract for the existing operator, Vargo Golf Co., expires on March 22.
The issue was back on the council agenda for reconsideration at its 10 a.m. meeting on March 20, Crain’s Detroit Business reported.
Vargo Golf Co., which has operated the three courses plus a fourth city course, Palmer Park, for seven years, is pushing for the council to consider its second-highest bid of $105,000 and keep existing operations in place, Crain’s Detroit Business reported.
“City Council is being told this is the only option they have: Pick this company or they close,” said Ed Maciejewski of Oakland Township (Mich.)-based Vargo Golf. “And that’s just not true.”
Boysie Jackson, Detroit’s Chief Procurement Officer, told the city council last week that the city would not recommend another contract with Vargo, which has operated on one-year contracts for the past two years after having a five-year contract to run the courses, Crain’s Detroit Business reported.
Maciejewski and company owner Robert Vargo said operation of the clubhouses would be chaotic in the coming weeks and months if their company is not retained. With spring-like temperatures of nearly 60 degrees, golfing began in earnest on March 18, Vargo said, with more than 200 rounds played at Rackham Golf Course.
Vargo Golf also owns the golf carts at each course, Vargo added, meaning a new operator would have to pull together carts and other equipment in the matter of a few weeks.
In addition, Vargo Golf holds the liquor licenses at the two of the Detroit courses, Crain’s Detroit Business reported.
“The league people are going to go crazy when they find out there’s no alcohol at Rouge and Chandler parks,” Vargo told Crain’s.
City officials have pursued a two-year “bridge” contract to create a long-term strategy for making capital improvements to Rouge Park on Detroit’s west side and Chandler Park on the city’s east side, Crain’s Detroit Business reported, with plans to then bid out a 15-year contract in 2020.
The Duggan administration also wants to put the city-owned Rackham course on the market to be sold — a proposal that drew immediate backlash from council members last week, Crain’s Detroit Business reported.
Charlie Beckham, the mayor’s group executive for neighborhoods, said earlier in March that the Palmer Park Golf Course would close. The course has been operating with just nine holes for the past two seasons because of costly capital improvements needed on the back nine holes, Beckham said.
City Council members raised questions last week about Signet’s ability to manage the courses, Crain’s Detroit Business reported.
The Request for Proposals (RFP) dated November 17, 2017 says the minimum qualifications for a golf course operator is a company that has at least “five years of experience providing the services requested in the RFP for projects of similar size and scope,” Crain’s Detroit Business reported.
“Your company must currently, successfully operate and manage golf courses of similar size and scope,” the RFP stated.
Peter Dejak, owner of Signet Golf Associates, acknowledged before City Council that his company is currently only operating one course, Pine Ridge Golf Club in Locust, N.C, Crain’s Detroit Business reported. The company is in the midst of renovating another golf course in Gladewater, Texas, according to its website.
“When you only have one currently, it kind of disqualifies you off the bat,” Robert Vargo told Crain’s Detroit Business. “The RFP doesn’t say construction, it says managing. It doesn’t smell right.”
Dejak and his business partner, John S. Wait of Sirius Golf Advisors, said they have run 25 private and municipal golf courses since 1995, and that the Texas course is still being operated by Signet while it’s being remodeled, Crain’s Detroit Business reported.
They declined to address questions from Crain’s about their operation, pending the outcome of the anticipated revote.
“We will be open for play,” Wait said on March 19, Crain’s Detroit Business reported.
Vargo said he wants city officials to prove Signet is “more qualified” than his company, which has had to work on one-year extensions for two straight years primarily “because purchasing didn’t have their act together,” he claimed.
“We’ve never seen a purchasing department work this hard to ram a contract through,” Vargo said.
John Roach, a spokesman for Duggan’s office, declined to comment on the contract dispute when contacted on March 19, Crain’s Detroit Business reported.
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