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).
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