The Flagler Beach City Commission voted 3-2 Thursday to sell the nine-hole Ocean Palm Golf Club it bought in 2008. The sale price would be $801,000, or $100,000 less than what the city paid for it, when it acquired an additional 3 acres a decade ago.
The course has been a perennial loss for the city even with the two golf management companies that have run the course since 2015. The buyer is the current lease holder, Ocean Palms Golf Club, owned by Jeff Ryan. The sale price averages out three appraisals of the property.
Commissioners Rick Belhumeur, Eric Cooley and Scot Spradley voted to sell. Commission Chair James Sherman and Commissioner John Cunningham voted against.
Ten residents addressed the commission, three of them in support, six dubious about the sale and some wondering why the proposal by the 10th speaker–Anthony Stewart, who is offering to lease the property at a far higher cost than the city is getting now–isn’t being considered.
“The tenant expressed an offer in purchasing the golf course,” Spradley said. “That’s why we’re here. We can’t sell the golf course to anyone else without the lease going with it. That’s just the way it is.
The sale agreement is precise. Ryan’s financing plan is not. He and an investor were as vague about it as they have been since the commission began considering the sale starting last spring. But the closing is contingent on the buyers certifying their financing to the city. “If they did not have financing by closing, there would not be a closing, and the deal would not go through,” City Attorney Drew Smith said.
The due diligence period is ahead, as is the adoption of an ordinance. The purchase and sale agreement “starts making it binding,” Smith said. “So you still do have quite a bit of wiggle room. But once this is entered, you are moving down the road to culminating a sale of that property.”
For many in town, the fear is that the sale is the first step toward eventual development of the golf course into housing, as was the case with the Matanzas Woods golf course in Palm Coast.
The agreement includes a declaration of restrictions and covenants as added protection with the deed restriction requiring the property to remain a golf course. The deed restriction may be removed by a future commission, but requires a unanimous vote to be eliminated.
Commissioners added a right of first refusal: if Ryan were to sell the course, the city would get first preference. The city also has a “right of re-entry,” giving it title to the land again (after a lawsuit) if the deed restriction is violated.
“As long as I’m in this seat, it will always stay a golf course,” Commission Chair James Sherman said. “That’s my word.”
Commissioner Scott Spradley also sought to reassure residents. “When I open an email at my city email address or my law firm address, I’ll get in there too, and it says the subject will be golf course,” he said, quoting from emails. “Dear Commissioner Spradley, please don’t sell the golf course. Commissioner Spradley, please sell the golf course. It’s one after another, after another. And I have talked to a lot of people, and those who are in favor and those who are against, and I will say that in my experience, which may not be representative of the entire town or of this board, but in my experience, many of those who don’t want it to be sold have a fear that it will be converted into something other than a golf course. And I just spent five minutes telling you how I do not believe that is ever possible, that it could happen.”
In addition to the deed restriction, the covenants ensure the city has its easements for drainage and lay out a framework for the redevelopment plan.
“I remember that place before we bought it, and it was quite a mess,” Commissioner Rick Belhumeur said. “We bought it to protect the people that lived around it and the residents of city that wanted it to not be developed, that was, that was the goal, to keep it from being developed. And of course, the people that lived around the golf course the longest were the biggest proponents of that, and they’re the biggest proponents of selling it now, because they know if we don’t sell it, there will never be a golf course again, because we’re not going to put the money in it.” and people like Terry aren’t going to come in and offer to do it over again, and we’re not going to be stupid enough to accept it.”
The only way to ensure it’s a golf course again is to sell it to a private concern that will make it so.
Belhumeur did not mention that Ryan had assumed the lease on just such a promise–without a sale as a condition. The course only deteriorated to the point of becoming unusable. Selling it became Ryan’s new pitch to the same promised end: a sale would enable the sort of needed investment to make it a handsome golf course.
Once the sale closes, “we would be able to hit the ground running as fast as we can, to scrape the property, to regrade it, to bring the property to conformity,” Jay Livingston, the attorney representing Ryan, said. “Ideally, it would be ready within a year.” The one-year process includes a one-year extension. “We believe everybody will be very happy with the result once we get there.”
Ryan described it as a seven-month project. “I’ve dedicated 21 months of my life to get to this point, and I’m really looking forward to the seven or eight months of the renovation to get golf back in Flagler Beach,” he said.
Spradley wanted more details about financing. So far, Ryan had offered no details. He did not offer any Thursday, either.
“We have both public and private funding options,” Ryan said, before saying it’s more his partner T.J. Seoni’s department than his. Seoni stood next to Ryan, who continued: “We have a substantial amount of money into the project that gets counted towards our loan with the SBA,” meaning the Small Business Administration. He did not say what that amount is. The loan is not approved. It is “at that threshold” of approval, awaiting the sale and purchase agreement.
“I figured that would be the case, you need to own the property before you can get it,” Spradley–an attorney–said. “But still, you must have some idea of what sort of, to the extent you are willing to say, what sort of cash are we talking about, and what is the timeline do you expect to have a loan close?”
Seoni talked a lot, but provided no numbers.
Spradley tried again: “Is there operating cash to enable you to continue what you’re doing now?”
“A lot of operating cash has already taken us to this point,” Seoni said. “We’re waiting for the financing approval.” Again: no numbers.
Seoni seemed to contradict his partner that they are “on the threshold” of loan approval, since they have not yet fully determined which route to go for a loan: “We’re looking at a couple of different options,” he said. “We would rather go the SBA route with a local bank, because that makes the most sense. It’s a local project, rather than bringing in investors from God knows where. We don’t want to do that. So we really feel confident with this SBA portion that we’re working with.”
Commissioner John Cunningham, who voted against the sale with an “absolutely not,” was skeptical that Ryan hadn’t known for much longer than he let on that he would be buying the course–an implication that some sort of backroom dealings had taken place with the administration. Livingston sharply rejected the implication. “Since I was advising them, I can tell you that they were aware that they did not have a chance to buy the golf course until it’s approved by you tonight or at a future meeting,” Livingston said. “So everything they’ve done to date has been at risk and in good faith, and any implication to the contrary is false.”
“I have a whole lot of emails that were given to me that say otherwise,” Cunningham said.
“Yeah, they all work towards this point,” Livingston said, “but my clients are intelligent enough to know that you guys are the gatekeepers, and nothing can be sold without your approval.”
Cunningham said the whole deal lacked transparency and considered the contract “unacceptable” in its present form. Livingston said Cunningham was welcome to make a motion to change any portion of the agreement.
“The word transparency has been thrown out there quite a bit. I’d like to use the word maybe fatigue of this golf course,” Commission Chair James Sherman said, running through the dismal history of the course, its previous “criminal” management ownership, its hemorrhaging dollars all along.
To Cooley, the course’s history has been “painful,” and he has no interest in public-private partnerships. “You all know from all our strategic planning meetings how I feel about public-private partnerships,” Cooley said. “They are my nemesis. I do not like them. I do not think taxpayers benefit.” He does not believe in government being in the golf, bait and tackle or bowling alley business. Continuing to attempt to make a failing arrangement work will not do. If the aim is to protect homeowners around the golf course, the sale and deed restriction will do that, he said (winning Mayor Patti King over to his point of view).
Dusty says
Selling 32 acres within a block of the beach for $801,000 dollars without any other bids didn’t raise any eyebrows at all. The 3 yra votes wouldn’t even consider putting it up for public vote. Hopefully the neighborhood supporters won’t complain when they do not have any control over the hours of operation or the traffic, noise, and lights from the new clubhouse right across from their condos.
Schmael says
Commissioners don’t stay forever. It will be homes some day. Look at Marineland. Shame on Cooley, Belheumer and Spradley for approving the sale. Do you know the killing the new owner can some say make in building homes. Please someone else run for Commissioner because the two that are up for reelection need to go now!!!! I’m sure they think they are doing the right thing but just taking one offer is ridiculous. They just don’t want to deal with the course any more. My guess is they never even go near there.
don miller says
of course they can’t get a loan solidified until they have a sale intent in hand from the City. Now that they have Flagler Beach’s agreement in hand, they can shop loans.
Ryan Jones says
Three commissioners argued to willfully turn a blind eye to the past mismanagement of the golf course, in hopes the current lessee will be better as an owner. We are giving the bank to the bandits. There’s no way this ends well.
The buyers balked a bit when Cunningham pushed to increase the down payment to the standard 5% – so $40k down instead of $10k. That response says a lot about the buyer’s financial position to fully execute.
I hope these guys live up to the hype, for the sake of our community, but based on past performance, it feels a lot like wishful thinking.
NJ says
This is another reason WHY Palm Coast should FORGET the Sports Complex because it will be a negative drain from the Palm Coast Budget every year therefore causing a yearly INCREASE in Property Taxes!
Cut your losses says
Now maybe Palm Coast can realize that they should cut thoer losses at Palm Harbor0 ??
TR says
@NJ, this golf course is at the south end of Flagler Beach. Has nothing to do with Palm Coast.
Motherworry says
I gotta ask those who beat the drum how about house’s on the golf course.
Do you not think that the past owners did not think of development? They did and found for a couple of reasons it was not feasible. The majority of the land is not build-able. The cost of the infrastructure was to expensive. Basically not enough profit.
Give this new guy a chance. If he screws it up, it’s his money not the tax payer’s.
Ed Danko, former Vice-Mayor PC says
The bottom line truth, governments can’t run a business and has no business trying to run a business. Another reason Palm Coast needs to sell Palm Harbor Golf Course, which has lost millions and millions and millions of dollars, and yet the City Council, lead by Vice-Mayor “Tax & Spend” Pontieri continues to double down on stupid wasting taxpayer dollars running a failed business, while at the same time increasing your property taxes to cover up their inexcusable failures.
Michael John says
I live in Flagler Beach.
I bid $2 million. I smell a rat!
I’ll call my VP banker son and have the money next week.
This is not the way to do what’s
Best for the City.
Laurel says
Are you serious? This sounds like outright corruption! Does the City Attorney say this sale is legal? Ask! With no bids other than one? Hell, my husband and I will buy it for $802,000! These commissioners *sell* all that land, in a beach town, for peanuts? That’s a giveaway. No one else would lose so terribly on Beach real estate. This should be investigated, a long with the investigation whether the Sunshine law was ignored.
Flagler Beach residents, y’all need to see that this action is stopped! This is a sham!
Jane Gentile Youd says
I hope the final sale document require the property to be golf or at least recreational ‘ in perpetuity’ as well as proof, in writing, that the buyers have the total amount of cash at least 2 weeks prior to closing or deal is off. If course has to close until another buyer is found so be it but no sale without full amount of cash – no financing deals please – and, once again, recreational in perpetuity. But I don’t live in Flagler Beach and I respect the entire commission ( Eric Cooley has been my political mentor for years) but this is my personal opinion.
Too many slips between the cup and the lip keep coming to mind. I feel real queezy about this but I again I am not an attorney nor a Flagler Beach rep. Just my vibes…
Lisa Giorno says
Several petitions were signed asking commissioners to slow down this process and offer public workshops for community input on how they would like this land to be used.
Several ideas were submitted such as a park, nature preserve with walking trails, sports complex, community gardens, playgrounds, and golf course run by a dependable and trustworthy new lease holder.
When at first our commissioners stated “The golf course is not for sale” even during the time discussion via emails about a sale with current lease owner , we were told if it did become for sale there would be workshops to discuss how to move forward with community involvement.
Sadly this did not happen.
There is not a lot of trust in current leaseholder as his track record for property maintenance/ management is not a good one.
The property was leased with understanding that maintenance and improvements would be made and golf course and clubhouse would be operational. This has not been the case. Why lease wasn’t enforced is yet another question.
A proposal by a local company with proven business success in other communities , to lease property at 10x the current lease amount , profit share 2% and run a smaller version of top golf type driving range was submitted and not considered.
So here we are …..
Giving up ownership of a beautiful piece of priceless coastal property to private owners.
We can only hope the proposed buyers truly make the golf course a beautiful place and that the planned construction of a 15,000 square foot building as well as larger concrete parking lot will not worsen the already problematic drainage and area flood issues.
We can only pray this venture is successful and profitable so the property doesn’t move towards development if acquired as collateral for investors. Million dollar investors have millions to spend pushing for rezoning.
If this fails and we no longer own property…. Shame on the commissioners for letting go of city ownership . As many have said reelections are coming up …
Think about who you want making decisions for us since at this time it seems although they were voted in many choose not to listen to their constituents wants or needs .
Larry says
Same thing would happen to the new Sports Complex being considered west of US-1 …but at a much higher cost ($110 MILLION) to all Flagler County taxpayers.
Let’s hope that Flagler County denies moving forward with the $110 million Sports Complex money pit. Every possible red flag has come up with the proposed sports complex.
The Villa Beach Walker says
Selling the golf course makes perfect sense for the City of Flagler Beach. The golf course has been a recurring expense on the City budget since its original purchase in 2008. If the buyers can arrange financing and complete the sale, then the private property will immediately start generating property tax income for the City. Everyone should listen to Commissioner Cooley’s opinion that the purchase of the golf course should not be financed with public (tax dollars). When the golf course eventually opens and starts generating revenue, the City, County, and State will start collecting sales taxes. If the buyers can’t arrange financing and complete the sale, the City can end the lease and start talks with other interested parties.