The operators of the city-owned Ocean Palm Golf Club at the south end of Flagler Beach are offering the city $801,333 to buy the 37-acre, nine-hole course the city has owned since 2013.
Meanwhile, John Patrick Capital, the investment firm, told the city last week that it was interested in making its own offer on the property, implying that it would do a better job running it than the current lease-holder.
City Manager Dale Martin received the proposal from the current lease-holder on Friday, and will be discussing the alternative proposal with the new interested investor soon. The City Commission has not yet discussed either. It is expected to discuss the $801,000 offer at its Oct. 9 meeting, by which time there may be more clarity on the John Patrick Capital proposal.
The city paid $490,000 for most of the Ocean Palms acreage in 2013, what would be equivalent to $687,000 in inflation-adjusted dollars, and it paid another $459,000 for the remaining acreage in 2022, or $527,000 in adjusted dollars. In sum, the city paid $1.2 million for the two parcels, in adjusted dollars.
Earlier this year the city conducted three appraisals that averaged $800,000. (They came in at $794,000, $810,000, and $800,000.) The appraisals include condition on the property, limiting its use to a golf course.
That condition is not guaranteed. If the course sells, the condition may be nullified by a future commission. The course could then be turned over to development, as was the case with the Matanzas golf course in Palm Coast a few years ago. It is rimmed by single-family houses and the Ocean Palm Villas’ condominiums at the south end.
For now, Ocean Palm is the single-largest parcel of unbuilt land in the city’s ownership on the island. Only the state and the Florida Inland Navigation District, a tax-supported state agency, and the county, own larger parcels. (The 44 acres the city owns south of Windsor Circle are mostly marsh.)
The Flagler Beach City Commission in mid-July voted to negotiate a sale with Jeff Ryan and Tanuj Seoni, the two partners who took over the lease in January 2024, after the city had battled with the previous lease-holder for most of the nine years they operated it. The lease also includes a profit-sharing provision, which kicks in after the course has earned more than $200,000 in revenue for a year. The city has never benefited from that clause. (See the lease here.)
The course has not been in better shape since the new lease-holders took over. In most regards, its condition has worsened, according to commissioners. Commissioners allowed Ryan and Seoni to suspend operations pending the outcome of the negotiations of the potential sale.
Commissioners also declined to issue a request for proposal (RFP) that would have allowed other interested parties to bid on the property. The lease does not include a clause that would have given first-rights preference to the current lease-holder.
That has raised some questions, including last week from John Lepak, a representative of John Patrick Capital, an investment firm interested in the course. “What’s concerning isn’t that it’s possibly going to sell. Maybe that’s the best path forward for that property,” Lepak told the City Commission last Thursday. “What is concerning is that if you guys sell it to the person who’s been operating it, I feel like you’re doing yourself a disservice. I think they failed in every regard. And the condition of the property is apparent.”
Lepak said John Patrick Capital has “fairly broad holdings with a concentration in golf,” including a management group with operations like Ocean Palm in Arizona and Palm Beach County, leasing golf properties. “We’re asking that you just reconsider this,” the representative said. “I know that there’s probably a formal process for that, an RFP, or something like that.”
“Are you wanting to make an offer to purchase the property?” City Attorney Drew Smith asked him.
“If you want to sell it, I’ll buy it,” he said. But he is not pushing for a sale as much as a lease arrangement.
“The best thing I can tell you is, if you’d like to make an offer, make the offer to the city,” Smith suggested.
“We will look at doing that,” he said.
Lepak submitted an 18-page prospectus to the commission outlining his group’s interest in Ocean Palm, and calling it “A Better Path Foprward.”
The prospectus describes the course as “currently inoperable” and its operators as underperforming or mismanaging. A sale would leave no future upside for the city, would have a “negative impact” on the community, and would go against residents’ wishes to keep the property as a public service, the prospectus states.
It then outlines the group’s own plan, which would provide for a restored golf course, including “night operations,” a “techn driver driving range,” a restaurant, a band stand, an ice cream stand, a dog park, sports courts and event space (it’s not clear how all those amenities would fit in the limited acreage in addition to what’s being proposed).
The group would lease the club for $4,667 a month and share 2 percent of all revenue with the city, apparently without a threshold, as the current lease calls for. (See the prospectus here.)
In an email to FlaglerLive, Martin, the city manager, today said he had not yet had the opportunity to discuss the John Patrick Capital proposal with the presenter, “but I expect to more thoroughly introduce myself and discuss that concept within the next week.”
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