The leaseholders of the city-owned Ocean Palm Golf Club in Flagler Beach on Friday submitted a brief letter of intent to buy the 37-acre property on South Central Avenue that the city bought at auction for $490,000 12 years ago. The City Commission was expecting the letter. But it was also expecting the leaseholder to show how he would meet a set of milestones to prove that he’s capable of fulfilling his promises of turning the property into a functioning, attractive golf course. Those milestones were not in the letter.
A price has not been offered or been negotiated yet, but that’s expected “within a reasonable time,” according to the letter. The city commissioned three appraisals this year. They came in at $794,000, $810,000, and $800,000. If there is a sale, the sale price would be around $800,000.
The potential purchase of the property has been generating some opposition from users of the golf course and surrounding residents. They have raised concerns about the city losing control of the property, about a planned 20,000 square foot clubhouse, and about the current conditions of the course violating the lease. Last month the City Commission gave Ryan some relief, agreeing to let him close the course as he prepared his letter of intent, building plans and milestones for submittal.
Ryan wanted a seven-month closure. The city gave him one month, pending the sort of plans he would submit. The closure could be extended month to month. Ryan sought the longer closure to start renovating the grounds. The commission thought that was putting the cart before the horse. It wanted to see the plans first, including Ryan’s financing plans. Those plans were not included in the documents submitted Friday. Palm Coast attorney Jay Livingston, who is representing Ryan, said he was not authorized to speak on the matter, pending further discussions with the city.
“I’m hopeful this is but a starting point,” City Commissioner Scott Spradley, an attorney, said. “What I anticipated was that we’d see some proposal that had milestones, significant milestones of improvement, before there would be a sale approved. That’s the mindset that I have. I only speak for myself.”
But because of the concerns among the public and some commissioners and the history of the golf course and its disrepair over the years, “before selling this property the idea of having milestones to give the city confidence that this is the right course for this city I think is very important. This initial letter of intent had no such milestones, so I’m hopeful the tenant will reassess and there’ll be further discussions about milestone,” Spradley said.
The city has not put the potential sale out to bid. Spradley has heard the question raised a couple of times and was soon to have a discussion with City Attorney Drew Smith about it. “I see no reason for the city to proceed with a single bidder on something like this,” Spradley said. “I don’t know that that’s the intent. I’m going to look into what efforts have been made or will be made to seek interested parties.”
Commissioner Rick Belhumeur is more bullish on a sale. “We have no business continuing to oversee the operation of our municipal golf course when we are obviously incapable of doing so,” Belhumeur said today. “We have owned the golf course for over a decade and it’s time to stop hemorrhaging money. Let it go, take that money from the sale and spend it directly on stormwater wherever it can make the biggest difference.” He was referring to money the city spent when it first acquired the property, including thousands of dollars a year to mow it, money it spent repairing two roofs on the two structures there, and money it spent on the irrigation system, among other expenses, all before the current leaseholder.
“As far as the LOI, it needs to include another deed restriction requiring the owner to maintain all city stormwater infrastructure that is on that property,” he said. The property’s ponds are part of the drainage system, but they would be included in the sale. It’s been unclear whether the city would have easements to maintain the ponds or whether the buyer would be responsible. “That’s important in my mind, it’s very important. Something has to be in black and white about it,” Belhumeur said.
The city bought a 34-acre portion of the course for $490,000, and in 2022 added a 3-acre enclave and driving range for $459,000, paid for in cash. The course has not lived up to the city’s expectations–and promises to residents–under its two leaseholders since 2015.
The city severed its lease with the previous leaseholders after course conditions deteriorated severely. Those conditions have not been much better since, though the city has been more indulgent toward the current leaseholder, prompting some residents to flag the double standard.
The city is expecting just $3,100 in rent from the golf course this year (the city makes six times as much from golf cart registration fees) from the lease-holder, Jeffrey Ryan, who operates as Ocean Palms Golf Club LLC (with an s to Palm). Ryan also operates under Leisure Holdings LLC. The letter of intent was signed by a company principal, Tanuj Seoni. He and Ryan are Palm Coast residents.
“OPGC plans to use the Property for a golf course and clubhouse to provide valuable and high-quality recreation, dining and social gathering options for the residents and visitors in Flagler Beach,” the letter reads, using the acronym for Ocean Palms Golf Club. The course would remain closed while the grounds are redesigned and resodded with Seashore Paspalum and a new clubhouse is built.
That facility will include a restaurant, bar, indoor putting lab and short game practice area, golf simulators, and fitness area.
Plans call for a 100-space parking lot and a 20,000 square foot building with a 15,000 square ft. footprint (the second floor, or mezzanine, would be 5,000 square feet). The size of the building is scaled down from what had originally been designed as a 30,000 square foot building, though the footprint will not be different.
A timeline Livingston included with the letter of intent projects that the renovation would be accomplished in 28 weeks, or a little more than half a year, construction of the new clubhouse included.
“The deed conveying the Property from Seller to Buyer shall contain a restriction limiting the use of the Property to a golf course, a golf clubhouse, a clubhouse restaurant, and related golf recreational uses as described in the new clubhouse site plan,” the letter of intent reads.
City commissioners have pledged that any negotiations with Ryan and his company will be conducted in the open with ample room for public participation and no surprises.
flaggolfer says
I was wanting to know why the course hasn’t been open in over a month.
BMW says
So far, all talk, no action. One would hope the City does it due diligence on both their financial capability to purchase the property, the money to execute a construction plan and the financial means to maintain the course within a realistic budget. So far, all talk, no action. A true disgrace to Flagler Beach.
don miller says
An individual owning Ocean Palm is not the problem. Craig Shankland owned it before the City got it and he kept it profitable and in pristine condition. The problem is the current owner should have had a lease that required him to re-condition the course as it was laid out and prove he could manage that. Instead, you got a grandiose plan that will never work and never happen. No one wants to play a par three course with nothing but par 3s for a big green fee. They want an executive course which is par 4s and 3s as it is now. The bones were there when he took over and you’d have had a profitable nice looking course now, if Flagler Beach had done what I just said. Instead it is a string along. No details and no change in over a year ought to to tell you that. In fact there has been a change. There is no golf there now. He should have been required to keep it open no matter what. He has had a year to get financing. What happened now that all of a sudden it is still missing.? No City due diligence on any lessee’s viability. I have never heard of lease like this. The way the City has handled this deal proves it shouldn’t be in any type of business lease.
flaglergolfer says
I was hoping to learn why the course hasn’t been open for the past month.
Bo Peep says
800K for around 40 acres adjacent to the beach, really? This plan likely isn’t going to go anywhere but ito a developer. The course currently looks greener than it has since he took the lease because of the rain. City might want to hold on to the property instead of selling it. I hear that no one is making anymore of it