Possibly ending the city’s 17-year ownership of the Palm Harbor Golf Club, the Palm Coast City Council will look for a buyer for the 146-acre course and backyard to hundreds of properties in the C-Section.
The council today directed Acting City Manager Lauren Johnston to draft a request for proposals, or RFP, which will include the condition that the land remain a golf course in perpetuity. The provision would be similar to the arrangement in the works in Flagler Beach, where the city is planning to sell its nine-hole Ocean Palm Golf Club at the south end of town to its current operator.
The council is framing the initiative as an “option” and as information-gathering rather than an absolute commitment to sell. But it would also be the first time in the course’s history that the city has taken this step. In 2016, when it considered it, then-Council member Bill McGuire, the course’s harshest critic because of its chronic losses, dissuaded his colleagues from issuing an RFP, but only because he said there’d be no buyer. At the time, golf as a sport was in a severe recession, with courses closing and going bankrupt in droves. The sport, aided by the Covid pandemic, has recovered somewhat since.
Several residents addressing the council today begged it not to sell the grounds or to permit it to be sued for anything other than a golf course.
“I absolutely 100 percent agree that this property should and always remain a golf course,” Council member Charles Gambaro said. “It’s had a long history with our city, and I think it should be maintained. My question is, as we look at efficiencies, cost savings and efficiencies, is it worth the time to take a look to see if a private entity would do a better job in running it.”
“Not a fair way, not conservation, but an operational golf course,” Council member Theresa Pontieri said, though as City Attorney Marcus Duffy noted, once the city sells the course, it cannot control who goes bankrupt and who doesn’t. The Matanzas Woods golf course was sold to an operator on similar pretenses–that it would always remain a golf course. The operator went bust. The 278-acre course turned into housing tracts for the most part, to residents’ consternation.
Gambaro’s proposal was in the context of the latest state-of-the-course staff presentation about Palm Harbor to the council. Parks and Recreation Director James Hirst summarized the course’s recent financial history, the raising of rates to close deficits, the outsourcing of ground maintenance to a private contractor, and the projected small surplus for 2026, but not if capital improvements are included.
A council member and even the acting city manager were under the impression that previous councils had not made “cost recovery” a priority at the golf course. That is not accurate.
From 2009 to 2017, the council year after year pressed then-City Manager Jim Landon and his administration to turn a profit at Palm Harbor. (See reporting from 2013, 2014, 2015, 2016 and 2017, for example.) “At the time it was promised that we can open this golf course and it would pay for itself and we would not have to subsidize it with tax dollars,” a despairing Landon said in 2016. That year, the council discussed selling it, but faced the same immediate, visceral public opposition that the current council faced in January when it first spoke of selling it.
In 2017, the city gave up trying to break even and redefined the golf course instead. It was no longer a club, or a stand-alone “enterprise fund,” as it had been until then. (An enterprise fund is like the city’s utility or its stormwater operations: they are expected to be fee-based and self-sustaining.) Palm Harbor would henceforth be considered just another city park, run by the city. “Today we are hoping to change the conversation and go into a whole new direction,” Landon said at the time.
The Palm Harbor Golf Club’s moss-shaded greens symbolize the original Palm Coast and tug at the hearts of its users, who call it a gem. But the course’s bunkers could be metaphors for money pits: the 18-hole course has been deficit-ridden since the city took ownership in 2008, with operational deficits exceeding $3.5 million and capital deficits closer to $9 million. The general fund always closes the gap. In essence, taxpayers are subsidizing a fee-based golf club where they may not play unless they pay.
“I want to make sure that cost recovery is actually cost recovery, and that we’re running at 100 percent every year,” Council member Ty Miller said today. “But then once every five years, we’ve got to drop two grand on the golf course or any specialty equipment that the golf course needs and things like that. I want us to be saving at cost recovery for that moment, so that when it happens, we don’t pay anything out of the general fund.”
The budget isn’t structured that way, in essence hiding the true costs of the golf course. “Capital is not included in this budget,” Acting City Manager Lauren Johnston said. “So when we talk about replacing the bunkers or the greens at the time whenever they’re needed, it would come out of your CIP budget, not out of the golf-specific budget as of right now.” CIP is the city’s capital improvement plan.
“Previous city councils have considered the golf course an amenity, and it’s been in our capital improvement program, like other parks and facilities,” Johnston said.
Miller wants that capital cost included in future budgets. “This is a true cost recovery versus cost recovery for operations,” he said. Pontieri agreed, though she had other reasons to oppose continuing to carry the course on the city’s books as well.
“I have a really big issue with spending taxpayer dollars each year to undercut private business, which is why we decided in the last year or two to try to be cost recovery,” she said. She was “disappointed that capital improvements were not included in that, because I don’t think it really allowed us to fairly say we were cost recovery if we’re not looking at capital improvements as a part of what that actual cost recovery looks like.”
The city administration will appraise the property, as that is required for any sale of city land. The RFP will be submitted to the council for approval in coming weeks.
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