To more skepticism than support from residents, the Flagler Beach City Commission on Thursday voted 4-1 to enter into negotiations to sell its chronically ramshackle 37-acre Ocean Palm Golf Club to Jeff Ryan and a partner, who have held the property’s lease for over a year and a half.
The property may be deed-restricted. But a deed restriction is only as good as a commission’s vote. If the course is sold, there’s no guarantee against a future commission approving the land for development. It would only take a unanimous vote of the commission to do so.
Ryan in June sent the city a letter of intent to buy the run-down, nine-hole property. He and a partner, Tanuj Seoni, say they will invest $6 million to turn the property into an attractive 12-hole golf course with a 20,000 square-foot clubhouse. A resident questioned how the investors intended to make back that kind of money on a 12-hole course, saying the math doesn’t work.
“The obligation under a letter of intent is negotiating in good faith,” City Attorney Drew Smith said. That does not mean the commission has voted to sell the property. However downplayed, it is a significant step toward that end. “What you’re negotiating first is the purchase and sale agreement, which puts together the basic terms of what the ultimate sale is going to look like. Then you move to closing. That’s when the deed is on.”
The commission must first approve the sale agreement. That would be followed by due diligence, one of the steps that allow the commission to scrap the sale. Before closing, the commission will have to approve an ordinance ratifying the sale at two public hearings, both times giving the commission more chances to pull out.
The city conducted three appraisals that averaged $800,000. (They came in at $794,000, $810,000, and $800,000.)
“Our vision for Ocean Palm is really a USGA specifications-greens, modern irrigation, environmentally responsible upgrades,” Seoni told the city commission. Ryan was not at the meeting. “We want to have a welcoming clubhouse and offer community-first programs, bridge clubs, brunches, couples golf league play, whatever is needed will be designed to increase home value around the area.” He said “this is not a land flip or a speculation play. It’s about restoring a community-based asset and building something Flagler Beach can be proud of.”
“If this is this gentleman’s dream, where is he tonight?” Corey Montague of Ocean Palm Drive asked.
Other residents were also not so sure about Seoni’s promise. “We’ve talked about Jeff’s experience and the new era in golf,” Ryan Jones of Ocean Palms Drive, neighboring the course, said. “We haven’t seen proof of that, and I think that’s really the only reason I personally have heartburn with this project.” If Ryan had maintained the course better than he had, there may have been greater confidence in his claims that he would turn the course around.
A few residents are heartily behind the sale.
“I want the golf course sold,” one of the property owners on the rim of the course said. She’s lived on the golf course six years. “No city should be in the golf course business.” Chris Conklin, who also lives on the course, called the course “a disgrace” that is nothing like a golf course. “But we keep pushing back against a guy who has a dream,” he said.
Ideally for Ryan, Commissioner Scott Spradley said, he would buy the property, get financing and “he’s off and running. From the city’s point of view, what I’m getting from the residents, including those who would support a sale to the right owner, is: how do we ensure that the timeline is complied with? How do we ensure that we don’t wind up where we are presently, with a golf course that is at best, equal, if not worse, than what it was when the tenancy began? So I don’t know how benchmarks could be incorporated into an agreement if the sale occurs on the front end of that.”
“That is the dilemma,” Jay Livingston, Ryan’s attorney, said. “All I can tell you, from our perspective, is that they intend to move forward.” But he’s leaving it to “the creativity of the attorneys,” meaning himself and Smith, to hold the owner to his obligations. The commission may not be comfortable with that.
Smith immediately made clear why. “Once that deed is signed, you do not have a level of control,” Smith said. The most the deed could say–and that’ll be part of the negotiations–is that it would take a unanimous vote by the commission to abrogate the deed restriction, which is that the property should always be a golf course. The commission also could make the deed conditional on a certain amount of money invested,” Smith said, without explaining how those amounts would be defined or verified. If it’s not, the property would revert to the city.
City Commissioner John Cunningham, who voted against negotiating, is skeptical of losing ownership. “That’s what my concern is, that if we don’t own it, the city doesn’t own it, somebody else owns it. They could do whatever they want,” Cunningham said. “It could be 10 years, 20 years, whatever, down the line, and you’ll see a subdivision going in there. I’ve done it. I know it can be done.”
Livingston outlined the renovation plans according to an ambitious 28-week timeline, and said Ryan needs the sale to line up investors. The physical driving range would be replaced by a “digital driving range.”Existing retention ponds will be expanded. All irrigation will come out of one of the ponds on the site.
“If we did not at least open the door to have negotiations and understand some detail,” Spradley said, “then we’d be doing a disservice. In fact, not opening the door to negotiate, then would mean the opposite. Then we’re closing the door, and the city would stay in the golf course business, which of all the potential miserable failures you could imagine, that’s probably the biggest one.” He doesn’t see a downside to negotiating and sees a lot of upsides.
To Commissioner Rick Belhumeur, “I say stop the hemorrhaging. Ever since we bought this place, this cost us millions of dollars, maybe not multiple millions, but it cost us $950,000 just to buy the property,” he said. The city will not be making that money back, if it sells at the average of the appraisals. Belhumeur listed the sums the ciy spent on the course since 2008. “It’s cost us a lot of money, and it’s time to get out of it,” he said, sounding like some of the Palm Coast City Council members who want to sell Palm Harbor Golf Club for the same reason. “We can’t do it, but it’s been said by all of us up here that we failed miserably at it, and it’s time to bail. It’s just keeps costing us more and more money, and as long as we keep it, it’s going to keep costing us more money.”
Commission Chair James Sherman is behind Belhumeur.
Mark Imhoff, who has led the opposition to the sale, asked for a citywide survey to poll residents’ wishes. He cautioned the commissioners about the buyers’ background. He warned them that golf courses have been purchased only to be turned into development tracts–as was the case with the Matanzas Woods golf course in Palm Coast. Another resident questioned why Ryan entered into the lease in the first place if he wanted to buy the property, and how he squares the fact that he has no money now, but has “all kinds of investors” lined up to help should he buy it. She doesn’t see why the city would sell.
RJ Santore said selling the property is premature, preferring to renegotiate the lease rather than sell. “We don’t know what the next 20 years will bring to this island,” he said. “This could be very valuable property for the city.” But Doug Wilty, an A1A resident, said whatever complaints there may be about Ryan and permitting or lack of water at the course are not his fault. “We’ve got a chance to make this very nice golf course,” he said. “Give this man a chance to do it. He’s got good intentions. Look at the place right now. It’s a mess. You’ve got nothing to lose at this point.”
Just a thought says
You cannot possibly compare what happened to Matanzas golf course to Flagler Beach. At the time, Matanzas was the most beautiful golf course in Palm Coast. Then the 1998 wildfires decimated the course and most of the homes as well as all the trees and vegetation. Very difficult to come back from that tragedy. The difference is Flagler Beach Golf Course has just been run down.
The Villa Beach Walker says
Negotiating the sale of Palm Harbor may not be the worst idea, as it addresses several problems.
There is the cart and the horse problem of the current leaseholder and his partner. They are talking about a purchase and making a six-million-dollar investment. It’s logical that they have some ownership stake or at least standing to try and raise those monies. The City’s entering into negotiations gives them that standing. However, this also allows the City to make specific requests.
The first thing the City should request is that the leaseholder abide by the terms of the current lease. The property is shabby and not being maintained. The leaseholder / potential buyer should address that. After all, they are looking for investors, pretty up the place.
Another such request might be a 10% deposit (since the City can’t entertain other offers) and setting a deadline for buyers to prove that they have secured funding. Has the leaseholder been paying the City anything before or after they requested the shutdown?
Based on the funding deadline date, if proof of funding isn’t secured within twelve months, the deposit may not be refundable.
Another point to consider is that at some point, these negotiations could terminate the existing lease. That way, if another suitor comes on the scene, the City would be free to entertain other offers.
If the sale moves forward, the City could also build in a ‘deadman’s switch’ into the contract. That way, in 5 or 10 years if the City Commission changes (and the deed restriction is removed) and the owners move to sell the course for another purpose, a contract clause might call for the seller to remit 25% of the sale price back to the City.
I have faith in the Flagler Beach City Commissioners that they’ll do the right thing.
Dusty says
It’s a land grab nothing else. Have they opened the bidding for the property? Why not? Is Jeff Ryan the only choice? If the city wants to make money they could just lift the restrictions and open the property up for public bidding. If a developer could only use a portion of the property it could easily yield up to 50 quarter acre lots that would sell for 175 to 250 thousand dollars each. So $8 to 12 million. They would face significant citizen resistance if they did that so let’s just let it go quietly. Regardless if they do not act in the best interest of the residents that bought property on the golf course they and not just the city might be personally liable in a class action.
Dusty says
If the city wants to sell it they can vote away the restrictions and open bids to the public. The concept will have significant resistance but why take 800K when 40 to 50 quarter acre lots would yield 8 to 13 million dollars. Speaking of bids is this the only person interested in bidding? Has the city aired the possibility of sale and notified the public in case someone else may want to buy it? Regardless the commission should be acting in the best interest of the citizens and those that bought the property because it was on a golf course may seek counsel.
Tadpole says
37 acres for $800,000 ?
That’s 21.621 per acre.
Google real estate per acre in Flagler Beach.
Google price per acre in Flagler Beach is $230,600 per acre.
Some people need to have to learn to do math. Others did it years ago.
Linda Morgan says
What if….We keep the property and turn it into a beach side park! Landscape to protect the surrounding home owners view and put out picnic tables, use the clubhouse. Maybe rent out golf carts. There is already parking and bathroom facilities. Lets keep this gem of land in our control. We bought the land for $900,000 and want to sell it for $800,000!!! Land does not depreciate, buildings and homes do. Any thoughts?
Mothersworry says
Some of you folks make me smile.
I have a few comments:
Those waving their pom poms and posting signs first out to look at the golf course and ask, how many acres are in fact buildable ? Do you not think that if it was possible one of the hundreds of developers would have grabbed it?
I think it was determined prior to the first lease, only the land where the driving range is located is buildable.
In other words not enough buildable land to develop and install the associated infrastructure and turn a profit. Also based on info and belief the sewer system will not be able to handle a large increase. St Johns might have a bunch to say regarding any development that might adversely impact their their storm water project on the golf course.
To repeat the exercise of residents offering up use suggestions, been there done that. Some may recall what some people advocated for. A dog park, an equestrian center, a daycare, an ice skating rink and the list went on. It was decided that the best use of the land was that it remain a golf course. All one has to do is some research on this. Be very careful what you wish for as you might get it.
Rest assured not everyone is affiliated with the group that oppose’s Mr. Ryan in his endeavor. A very large number of folks are in support of Mr Ryan.
Slip of the tongue says
The Villa Beach Walker who said, “Negotiating the sale of Palm Harbor,” surely meant “Ocean Palm.”
Right?
Uh….right?
Richard says
Tadpole,
Before criticizing others, you may want to research the difference between a period and a comma. Changes the meaning a little.
John says
You got to be pretty smart to see through all these scams coming out of this area Flagler County is one of the most corrupt counties I’ve ever lived in hands down Andy danced go away
Loves Flagler Beach says
For this piece of land to become a successful golf course, I suggest we look at other courses in Flagler County along the beach: Hammock Dunes, Hammock Beach, both courses along the ocean, and those courses supported by wealthy residents.
For this course to look like those, would require huge sums of money. $6 million to develop it, but then you have to sustain with members. How much can you charge for a round of golf – a round of golf on a 12 hole course ? Is this even possible or just a dream? I believe this is a land grab, and someone is planning to develop it for homes or condominiums in the future.
Don’t sell this property for such a low price. Government should not be in the golf course business when there’s so many other privately owned courses. Turn it into a park, or sell to a developer with requirements to build decent buffer zones along homes and public facing roads.
don miller says
The point made that there would be reason believe that the golf course grandiose rehab would be for real if we had seen some improvement since it was recently leased. There has been none. Every permitting deadline for improvement has been missed. To the contrary, the new lease resulted in a closing. The City leased the golf course to be a golf course and you really think it will become one with this recent track record.?? The business model will never work and everyone knows it which is why the delays. The goal is the cheapest per acre subdivision in florida. The flagler beach commission knows the truth behind what they are really up to but won’t tell the public. All it needed was the irrigation repaired , the course reseeded, the clubhouse expanded a little, condition returned to the 2008 level which made money and they couldn’t even get that done. Know you want us believe grandiose plan.
Tim says
John how is Flagler count one of the most corrupt county in Florida?
Louie knows says
First of all, the city did not pay $ 9oo,000 for the property. I confirmed this by talking to Mr. Bruce, then Flagler Beach City Manager. He was directed to bid up to $ 500,000. He bid up to $ 495,000 and the city was the owner at the Flagler County Clerk of Court’s office auction. As such, perhaps $ 800,000 0r so is not such a bad price for the City ?
FlaglerLive says
The combined price of both properties Flagler Beach bought several years apart was at or near $900,000. The city bought the course first, then it bought an enclave that forms the current driving range.