Council Approves Lease for Golf Course

has, for several years, been the focus of another kind of sport, Councilwoman Bridget Donnell Newton said on Monday.

“I’m just disappointed that we’ve had to come to this, that it was a political football that forced us into this,” Newton said shortly before the Rockville City Council voted unanimously to turn operations of the financially-strapped course over to a private management company.

The vote offered a rare moment of unanimity on perhaps the most divisive issue faced by the current council in its two-year term.

With the vote, the city will lease the course to Vienna, Va.-based Billy Casper Golf for 10 years, with the option to extend the lease for four additional five-year periods.

The city considered four offers to take over management of the course. BCG was the only company also to make a lease offer.

The lease will begin Jan. 1. BCG will pay the city $12,000 annually through 2016 and then $24,000 annually through 2021, for a total of $180,000 over the 10-year initial lease.

BCG estimates that it will spend more than $1.5 million over the 10 years in lease payments, revenue sharing with the city and capital investment. That includes $175,000 in 2012 for a new point-of-sale system, new golf carts, clubhouse interior and driving range improvements and a new pavilion to host tournament outings.

“I’m very impressed and frankly incredibly surprised by your proposal,” Councilman Piotr Gajewski told Joe Goodrich, BCG's senior vice president, who on Monday presented the council with his company’s proposal. “What surprises me is that you feel that there is a buck to be made in an environment that is incredibly competitive.”

Gajewski noted the many public and private golf courses in the region, including the nine golf courses owned and operated by the Montgomery County Revenue Authority.

Given the region’s demographics and the competition, "the golf course is actually performing under the benchmark it should be,” Goodrich said.

BCG is the largest operator of golf in the United States, with more than 120 courses in 27 states. “We have economies of scale,” Goodrich said.

Competitors “don’t have the systems and the tools that we do," he said. "We’re very confident we’ll be very competitive.”

Mayor Phyllis Marcuccio called the vote “a wrenching consideration” for those concerned about the course.

“The thought of someone managing it is a fine idea, it’s tremendous,” she said. “If we were able, capable on our own, I guess we would have done it. But we have not had the support internally. Maybe operationally—we’ve had a lot of good people—but we have not had the support to make the golf course a golf course that operates in the black. This may be the opportunity that will take us there. I certainly am hopeful that it will.”

Without the lease, RedGate was projected to be a drain of more than $4 million on the city budget by fiscal 2016. That is in addition to a $2.4 million operating deficit for the course that the council voted to close by shifting money from the city's general fund last year.

Councilman Mark Pierzchala said he called on city staff to ensure a motion he crafted to approve the lease was “air-tight” and could be passed before the current council finishes its term with a final meeting on Monday.

“I think that this is the Mayor and Council that has to deal with [RedGate],” said Pierzchala, who at various times over the past year has suggested closing the course and letting the property return to nature as parkland. “It’s been wrenching for everybody.”

In considering the course’s future, the city contracted with the National Golf Foundation on . The council voted unanimously in February to follow NGF’s recommendation and .

“We got a proposal that I don’t think any of us was expecting—one that allows RedGate to remain as a golf course for up to 30 years,” Pierzchala said.

Under the lease, RedGate will remain “the city’s golf course and at no risk and no cost to the taxpayer,” he said. “I think in some respects we all get just a little bit of egg on our face for various reasons, but in many respects we can all walk away as winners and say: ‘I saved the golf course,’ or ‘I saved the taxpayers some money.’”

Joseph Jordan, chairman of the RedGate Advisory Committee for the last seven-and-a-half years, called Monday “a very sad day.” The advisory committee had .

“It’s always been my contention, and continues to by my opinion, that the failure of RedGate rests squarely on the shoulders of the city—both senior management and council members. Not just this council but going back seven years,” Jordan said in testimony before the council.

“For the past seven years I’ve been imploring various councils to ask staff to reconsider the business model currently in use at RedGate and to model it on what is exactly in the Billy Casper Golf proposal,” he said.

A director of golf—a position that the advisory committee endorsed but that the council declined to create—would have helped the city move toward that business model, he said.

While Jordan predicted that Monday's meeting could be the last time he testified as chairman of the advisory committee, Goodrich said that some BCG-managed courses have advisory groups.

Marcuccio said she was ready to put the issue behind the council.

“I am shocked that the guy who wanted it to go back to nature has had a change of heart,” she said.

Pierzchala took exception to Marcuccio’s comment.

“My concern has always been with the taxpayer subsidy for golf,” he said. “What we were given by the National Golf Foundation was the least expensive way to get out of that subsidy.”

When the council voted, in September 2010, to shift $2.4 from the city's general fund to close the course's operating deficit, Pierzchala suggested that the city forgo the report by NGF, for which the city paid $25,000. Instead, he suggested that Rockville immediately solicit private management proposals.

“The fact that it’s taken so long to solve it, it’s not on me,” Pierzchala said. “I’ve tried to expedite it as much as possible.”

Pierzchala and Newton are seeking reelection on Nov. 8.

Gajewski, who is challenging Marcuccio for mayor, said that the mayor had had a change of heart of her own.

“You taped a statement about three weeks ago in which you promised that you’ll defend the city against entering into any leases of parkland without a citizen referendum,” he said. “I’m very happy for you that you will break that promise tonight and vote for this lease.”

The lease was what the council was looking for “because it takes the risk away,” Gajewski said.

Art Stigile, a Rockville resident and , called the proposal “a win-win for everyone.

"It’s a win for golfers who will be able to continue playing RedGate. It’s a big win for taxpayers because the golf course will be operated at zero cost to taxpayers.”

Councilman John Britton agreed.

“This is so financially good a deal and I think institutionally good a deal that Mr. Pierzchala could not help but accept it and keep the golf course and keep some of the green space,” said Britton, who is not seeking reelection.

The city “didn’t have the wherewithal” to market the golf course as needed, he said.

“I don’t think we could ever match your marketing acumen and expertise," Britton told Goodrich. “And that in my mind was one of the key flaws in how we were operating.”

Jordan, in his testimony, complained that RedGate staff was not involved in the evaluation of the management proposals submitted by the private firms.

Goodrich said BCG “look[s] forward to meeting and interviewing” RedGate staff.