ReportsAs a reminder, the lease with Lohmann Golf expired at the end of June 2011. Negotiations for a new long-term lease with Donovan Bros. Golf were held up over a proposed extension of the driving range. In the original instructions from City Council (5-0 vote), a small piece of property located between the existing driving range and Nature Park (but within the original footprint of the golf course property) was to be added to the park and landscaped by North East Trees, an urban forestry non-profit. In spite of this directive, the property became part of the negotiations with Donovan Bros. The golf management company wanted to extend the golf course into this previously unused land. Upfront cost for the extension was to be paid by Donovan Bros. but fully reimbursed by the city through rent credits.
19. Arroyo Seco Golf Course's status report on operations and finances during the transitional period (no staff report)
Citizen objection to the golf course extension and the city's failure to file CEQA (California Environmental Quality Act) documents resulted in a temporary agreement with Donovan Brothers. Since the expiration of the lease with Lohmann Golf, Donovan has been paid by the city to manage the facility. It is my understanding that they will be reporting to City Council on Wednesday on "the operations and finances" during this period.
As a reminder, under the long-term lease agreement being negotiated by the city and Donovan Brothers, the golf course management company would provide upfront capital for facility improvements to be reimbursed by the city through rent credits. The company would pay the city rent to manage and run the facility, and would cover operating expenses. Profits generated by the facility would go to the management company. In this arrangement, if capital improvements do not result in increased revenue the city is still fully responsible for the outlay of funds via these ongoing rent credits.
Under the temporary agreement, the city pays Donovan Bros. a fixed amount to run the facility, but keeps the profits. It is my understanding that capital improvements are paid by the city in this temporary arrangement, but resulting increases in generated revenue are kept by the city. In contrast to the long-term agreement, the outlay of capital for improvements is linked with an expected increase in revenue.
Through this long process I have written blog posts, newspaper editorials, and spoken at city council meetings explaining my position on the driving range extension issue. I have tried hard to be accurate in describing what I believed was being negotiated. If now, or in the past, I made any erroneous statements, I welcome corrections.
Previous blog posts:
April 20, 2011: City Council to Review Driving Range Extension in Closed SessionNative By Design Blog (Nature Park blog)
April 6: City Council Action Item 19: Driving Range Extension
April 1, 2011: Driving Range Extension on City Council Agenda
March 19, 2011: Golf Course vs Habitat
March 6, 2011: City Council considers extending golf course