Flagler Beach government has issued a withering letter informing Flagler Golf Management, the company that’s run the nine-hole Ocean Palms Golf Club at the south end of town for the past seven years, that it was again in default of its lease, and has 30 days to fix the problems. The city will sever the lease if it is not satisfied after 30 days.
The problems this time, as the city sees and experiences them: insufficient or vacuous record-keeping. Not complying with a request for an audit. Failure to operate the restaurant, though keeping the restaurant open is an explicit requirement of the lease. Poor maintenance to the point of making it “an embarrassment” to the city. And allegations of illegalities such as staffing the operation with volunteers, which would violate labor laws, infringement on a 2.9-acre jut of a property the city doesn’t own within the course’s rectangle, and unaccounted use of federal covid aid dollars.
It’s not a surprising development. Relations between Flagler Golf Management and the city have at best been tolerable, and have often approximated a local cold war, with Flagler Beach having to claw through the company’s iron curtains for records and accounts over the years. On the other hand, after the grounds had gone fallow and ugly with neglect and overgrowth for a decade, to the displeasure of the scores of residences around it, the company has kept the greens relatively busy, if fitfully so.
It may not be a surprising development, but City Manager William Whitson’s letter is by far the most systematically documented list of grievances and the most harshly expressed.
Some members of the Flagler Beach City Commission have been very vocal in their criticism of the company, verging on wishing to be done with it. Others have been more indulgent. Whitson is discussing the letter at the commission’s meeting this evening, alongside Drew Smith, the city attorney who has dealt with Flagler Beach Management from day one.
The first letter that informed Flagler Golf Management that it was in default of its lease with Flagler Beach government in 2017 was barely over a page long, was written by Smith and addressed Terry McManus, the company’s owner, listing a series of violations in a dispassionate, almost neutral tone. McManus “cured” the violations in time. The arrangement, in place since 2015, resumed–fitfully, problematically, but continuously since.
The second default letter went out on Feb. 3. It’s six pages long. It’s addressed to “To Whom It May Concern,” itself an indication of how frayed and vague the relationship between the golf club and the city has become: McManus is in prison, serving a four-year term on a drunk driving conviction (imprisoned because it was his third within 10 years). Whitson wrote the letter this time, adopting a tone both more personal and more prosecutorial.
It addresses violations lease section by lease section, with examples, quotes from correspondence, uses words like “woefully,” “extremely concerning,” and allusions to “a complete waste of everyone’s time,” and it fires recurring verbal indictments: “Failing to keep proper financial records shows a complete disregard for your obligations to the City, for the community you serve, and, frankly, your own business operation.” “City staff should not have to take time away from their day to day duties and we should definitely not have to pay the City Attorney to hound you for records you have a duty to supply.”
The word “failure” appears six times in six pages. The language verges on outrage: “The condition of the property is embarrassing. Simple tasks like cleaning up litter and dead vegetation are not being performed. The overall appearance reflects a business owner that does not take pride in ownership. This community deserves better with regard to the conditions of public property and the Lease requires better.” Whitson, citing a section of the lease, wrote that it “prohibits you from allowing the course to become a source of embarrassment to the City. Your inattentiveness to the property has done exactly that.”
The city requested to conduct an audit of the the golf course operation in July. The company has yet to comply even though in December the company acknowledged having most of the records making an audit possible, only for the city’s auditors to discover over the following few weeks that the records supplied were insufficient.
Why the audit? The city doesn’t explicitly say that it suspects wrongdoing, but almost goes that route toward the end of the letter: “Finally, in reviewing the financial records that have been supplied to the City, I note that the Flagler Golf Management, LLC received a Paycheck Protection Program loan.” The Paycheck Protection Program was part of the covid-relief bill of 2020, enabling companies to borrow money to pay employees. “While there is no wrongdoing in the receipt of those funds, the records received by the City thus far also do not allow us to ensure that those proceeds were for the purposes allowed. The City has no role in the enforcement of the Paycheck Protection Program but I must advise you that if we find any reason to question the use of those funds or other grants or loans received, I believe it my duty to report any such concerns to appropriate the governmental agencies.”
Whitson in his introduction termed himself “disappointed” to be writing the letter. He included as attachment the correspondence between the city and the company or its attorney, Adam Franzen of Fort Lauderdale. The exchanges between Smith and Franzen are more friendly than Whitson’s letter “To Whom It May Concern,” but also more circuitous and piecemeal, never getting to the heart of the matter no matter how much Smith probed.
The lawyerly probity is a front, of course: an indication of the more confrontational nature of the relationship was evident in Franzen’s July 21 letter to Whitson from Tiffany McManus, Terry McManus’s wife and now the president of Flagler Golf Management, who said: “This letter is to notify you that all future letters. notices, etc., need to be mailed to my attorney, Adam Franzen,” and so on. In other words, McManus, who operates the course a few dozen blocks from Whitson’s office, was asking that all communications be channeled through a lawyerly pipeline 250 miles south. It is why, when asked today whether he had any working relationship with McManus, Whitson said he had none, and had “never met the lady.”
Though the letter gives Flagler Golf Management 30 days to meet the demands from the date of the letter’s issuance–Feb. 4, making March 2 the deadline, unless it only counts working days–Whitson has scheduled a March hearing for th company to present and defend its case before the city commission.
“If you disagree with my determination that any of the above are a default under the lease, you may present that to the City Commission at the hearing,” Whitson wrote. “If you believe you have cured all defaults described in this letter, you may present that evidence to the City Commission at the hearing. Ultimately, the City Commission must make the final decision as to how to address these defaults. I believe that given the history of the operation and the nature of some of the defaults, the City Commission has the right under the Lease to terminate the Lease and I encourage you to come to that hearing prepared to explain why they should not. To the extent you have a sincere desire to continue operating the golf course, I hope you will come prepared to offer a plan to ensure that this conversation will never happen again.”
It last happened in November 2017, when a similar hearing drew a full house. It is unlikely the March 10 hearing will do so, as residents have long ago tired of the plotline’s tediousness.