BELLEAIR – There is little doubt the town of Belleair will be buying the Pelican golf course, or the Belleview Biltmore Golf Club, as it is known today. The bigger question is what to do with it?
That was what faced the town’s Finance Board on Jan. 15 and the board members decided they will have to talk about it much more before they make any kind of a recommendation to the Town Commission.
Assistant Town Manager J.P. Murphy had just conducted a feasibility study into the purchase of the course, and he got straight to the point.
“Let’s be clear, we like the idea of purchasing the golf course because we want to get the development rights,” he said. “Once we buy it we can then decide to retain the golf operations or we don’t have to.”
Murphy’s report revealed some financial numbers that, for the first time, shed some light on the operation of the facility, which is at 1501 Indian Rocks Road.
For the past three fiscal years the golf course has operated at a loss. In 2012 for example the gross profit of the course was $1.83 million while the total expenses were more than $2 million. That was a loss of just over $200,000, about $40,000 less than the year before.
Murphy blamed the way the course is run for the losses.
“Our studies show that poor management contributed to the downward trend in profits at the course,” he said. “There were some questionable entries made in the books.”
He also noted that the restaurant at the club was to blame for much of the loss.
“The food and beverage has been a loss leader there,” he said. “It is the anchor which brought that ship down. For example they have $20,000 of food on hand when I’m being told by golf people that all they want are a few burgers and a snack; that would be good enough.”
He said that while the marketing for the course has been spotty, there is a good membership base that should be an attraction for a management firm or a future lessee. He also noted that overall the course is in good shape and it does not require a lot of capital outlay.
Murphy presented the Finance Board with four options for the future of the course:
1: Once the town bought the course it could continue to operate it. The town would assume all the risk but get all the profits.
2: The town could retain control of the course but hire a management firm to run it. There would be the opportunity to make some money from that deal.
3: The town could enter into a long-term lease with a golf course operator and realize some financial gain from the lease itself.
4. A hybrid of the other three options, mix and match as it were.
Later Town Manager Micah Maxwell added another option. Buy the course, take development rights off the books and sell it right away.
Faced with those options board members began peppering Murphy and Maxwell with questions.
Mary Griffith wanted to know if under a lease agreement the lessee would be compelled to keep the course in good shape. Murphy replied that any lease would contain a set of standards or the lessee would default on the deal.
John Prevas asked if the golf course was damaging the aquifer with the chemicals necessary for fertilizing. Board member Tom Lokey noted that the government heavily regulates golf course chemicals. Maxwell said the aquifer should be OK.
After the questions were asked it was back to Murphy to discuss more of what he discovered in his study, and having the town run the golf course was not something he would recommend.
“We found that in cases where municipalities are running golf courses they don’t make as much money as a management deal or a lease arrangement would make,” he said. “Some cities are OK with taking the loss and writing the checks because they want their residents to have that recreational opportunity. I don’t think we’re in that position.”
Murphy said once news of the town’s intention to buy the course got out, several people have come forward with offers to run the course, and in at least two cases, to buy the course. He suggested it would not be difficult to enter into agreements whichever way the commission ultimately decided to go.
The whole idea of buying the course came about because the owners, the Ades Brothers of Miami, were threatening to foreclose on the mortgage of the Belleview Biltmore Hotel, another of their properties, to escape having to pay $250,000 in fines because of the dilapidated state of the hotel.
In addition the brothers would not agree not to develop the golf course into Townhouses, something the commission did not want to happen.
By buying the golf course for $3.5 million the town agreed to wipe out the fines, but would then be able to take the development rights for that property off the books. The Ades Brothers also had to give the town $50,000.
Already the $250 a day fines have begun piling up again because nothing has been done to improve the hotel property.
Town Manager Maxwell told the Finance Board that a town-hired appraiser has pegged the value of the golf course at $3.5 million, but that could go down once the development rights are removed.
Board Chairman Tom Olson said it was obvious the options were down to two. “Operating it ourselves is not feasible,” he said. “The hybrid idea is no good, so we either recommend hiring a management firm to run it, or enter into a lease agreement.”
He then suggested that the board consider recommending a lease agreement until it is clear what should be done with the property. Member Tom Kurey agreed.
“I think a lease is what we should do absolutely,” he said. “A management deal leaves us with all the risk and I don’t think that is the way to go.”
The board agreed to bring the matter up again at its next meeting. Maxwell said he hoped to be able to conclude the deal to buy the course by early February. He hoped the Finance Board would have a recommendation for the Commission shortly after that.