Stuck In The Rough At Boca National Golf Course

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Stuck in The Rough At Boca National Golf Course

As the City Council and the Beach and Park District prepare for a scheduled ‘tee off time’ on May 13 with a joint session exploring next steps in the Boca National Golf Course (BNGC) saga, these elected officials appear to already be in the ‘rough.’ Now, over a year into this process, the hard-unanswered questions will be the ‘driving’ force to get back on the proverbial ‘fairway.’

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‘Bogies’ and ‘Double Bogies’ may already be on the players’ ‘scorecard’.

Why????

On April 1, the Beach and Park District received a 17 page ‘due diligence’ memorandum from Deputy City Manager George Brown regarding BNGC in preparation for the May 13 joint meeting of the City Council and the District Commissioners.
See City memorandum attached.

In summary, this memorandum details and reviews the District’s “Improvement Plan” by the City’s Municipal, Police, Fire, and Recreation Services Departments, all presenting their open questions, recommendations and concerns.
See District’s Improvement Plan attached.

Of course, ‘The devil, as always, is in the details.’

The memo appropriately raises relevant questions dealing with the minutiae typical of a staff review. Similarly, the District has spent nearly a year on minutiae to choose a professional golf course design team, gather public input, and create a design that, to some degree, meets community expectations of the interested and enthusiastic public.

To date, the District has purchased the Ocean Breeze property with the help of a $24MM long-term financing agreement with the City. An agreement where the District will relieve the City of millions of dollars of future operating and personnel costs by replacing the City as the entity to budget and manage the new public golf facilities. Within this agreement, the City has reserved an oversight and approval role for final development plans as they emerge.

The Deputy City Manager’s memo also, and, finally, raises many multi-million dollar questions as to where the money to actually replace the Municipal Course with BNGC is to come from.

Some questions seeking response are as follows:

  • (W)hat is the District’s level of confidence in the overall estimated cost?
  • Is the District requesting financial support from the City for the construction of BNGC?
  • If not, what is the source of funding?
  • Does the District have the funds to proceed with development?
  • What impact will the construction costs, including any financing structure, have on the District’s present and future revenues and ongoing operating obligations and expenditures?
  • Has a detailed financial plan been prepared for the District that includes BNGC as well as all other District plans, programs, and projects?

Until these questions are answered, the District and the City are stuck in the ‘rough’, while the public is the ‘gallery’ at the 18th hole anxiously awaiting them.

The District Commissioners have, twice, raised the topic of the City’s financial participation in the BNGC build out from the proceeds of the sale of the Municipal Golf Course. The City Council members equivocated on the topic of funding with barely a hint of commitment to using any of the proceeds for the BNGC golf course.

 

Perhaps this equivocation has some merit.

BNGC is only one of multiple items that the District must fund in upcoming cycles. Others include the phase two fields at the Spanish River complex and the Gumbo Limbo upgrades and renovations. All toll, these outstanding issues may actually approach the $50MM mark; a large enough number to rightly concern City Council members.

Since the last joint meeting and without a firm financial commitment, the District has been able to consider only individual components of the golf course project without tying it all together into an estimated total for the completion of BNGC.

Sources suggest the answers to the City’s questions will reveal that the District does not have the financial capability to develop and build this project even with forgetting about the other outstanding items mentioned above. Without a significant infusion of funds by a third party, the District seems to have put itself into a financial ‘rough’. The questions raised by the City’s memo ought bring to light these financial shortfalls.

As has been suggested elsewhere, the City could purchase the Ocean Strand property from the District. Such a purchase would provide funds to the District for BNGC without the District needing to consider an RPF process to sell the property to a private developer or arrange the necessary funding with a politically sensitive millage tax increase. However, a City purchase still leaves open the question of what total commitment can the District absorb with its current anticipated revenue streams?

To date, there has been no official purchase offer on the Ocean Strand property submitted to either the District or the City.

As indicated, there are anticipated deep financial gaps in the District finances; gaps that remain unanswered by the elected officials. The May 13th joint meeting will be the next opportunity to have these financial gaps discussed in public for a possible negotiated arrangement.

One solution: ‘Sale of Ocean Strand’….But at what purchase price?

Private sector interests have set the purchase price at $45MM. $45MM would go a long way in filling the financial gap the District is facing. If made, that purchase offer would come to the District in the form of an unsolicited offer to purchase. If the District were to entertain the possible sale of Ocean Strand, an RFP process could result in a higher purchase price; a result experienced in the City’s sale of the Municipal Course last year.

Given the history between these two governing bodies, the City and the District may not be able to agree on a formula for establishing the property’s worth for commercial development purposes. Hence, an RFP would be a neutral way to determine what price the property would bring on the open market. These dynamics have yet to be played out.

Instead of arguing over price, the ‘elected officials’ should be acting in a ‘resident responsible’ manner remembering that Boca Municipal and BNGC are the residents’ past and future public golf facilities. Constituents – the resident tax payers – should be made whole with golf facilities equal to the Municipal Course, and that should determine the appropriate City’s and District’s financial participation. The City has already infused financing for the land acquisition. Although the District did, at that time, indicate it may have to come back to the City with further funding requests. $28MM was not even a fantasy in those prior discussions.

Proceeds from the Municipal Course sale will provide the City unencumbered funds of some $65MM; a sum in excess of the cost for the Boca National course plus its parking, cart barn, clubhouse, and other facilities. With the sale, the City would have the financial ability to provide funding to the District for various projects that remain open; to wit: BNGC, Gumbo Limbo, and the Spanish River sports complex. Considering that the District seems to have committed an ‘unforced error’ on funding requirements for BNGC, the City Council, before committing to any level of funding, should be prudent in asking for assurances of how and from where future finances would be available.

Only time will tell whether there is the political will by the City Council to move forward in a facilitating direction.

With the closing on Municipal Course anticipated to be coming in the near future, coupled with the reality of ‘No Golf In Boca’ until BNGC is opened in late 2020 or 2021, the first order of business for the City and District should be to answer these multi-million dollar questions to avoid further delay; delay being the track record with these two agencies.

Delays and petty political bickering are simply unacceptable!

The District and City need to get out of the ‘rough’ and back on the course. The ‘gallery’ is impatiently waiting.

Al Zucaro
Publisher of BocaWatch

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Alfred Zucaro has resided in Palm Beach County since 1982 and has been a resident of Boca Raton since 2008. A graduate of Fordham University, he holds a Magna Cum Laude degree in Economics. Mr. Zucaro attended Nova University receiving a Juris Doctorate Law Degree in 1986. He is a member in good standing with the Florida Bar, practicing in the area of Immigration Law for the majority of his career. Currently he is manager/member of Palm Beach Investment and Finance LLC, a USCIS approved regional center identifying foreign investment leading to permanent resident status. Mr. Zucaro served as a City Commissioner in West Palm Beach from 1995 to 2002 and as the President of the City Commission in 2000/2001. He has also been a member of and/or served on the Economic Council, the Business Development Board, the Film and Television Commission, the Tourist Development Council, the Workforce Alliance and the Palm Beach International Film Festival. Of particular interest is his founding of the World Trade Center Palm Beach, an organization that focuses on international economic development. Married to Yvonne Boice, they are avid world travelers having visited 6 continents and dozens of countries since their 2008 nuptials.

8 COMMENTS

  1. Boca Municipal is such a pleasant place to play, easy enough to get tee times, layned back, relaxed and perfectly run I might add. Also reasonably priced. It’s a shame it has to go. But since it will be gone, it doesn’t look like Boca National will be ready any where the same time. That leaves Osprey Point which is not only more expensive, but hard to get a tee time. From what I hear, Boca National will be like Osprey. Just too bad for those of us that love Boca Municipal and its employees.

  2. How can local golf enthusiasts get involved in this process? We want a comparable golf solution to the one we had with Boca Municipal and most people are expecting better with all the hype. The park district and the city seem to be at odds? Why? They will get paid for land sold. The price to build and get started should come from those funds so no debt. Then they can run a reasonably priced course for all to play and maybe have tournaments etc to offset costs. Boca residents need to get what they expect and want not what a few decide. The golfers need a say! They need financial transparency. Where does the money go?

    • Thank you for your comment. You ask probing questions that at this time remain unanswered. Yes the City and the District are at odds. Why? Is any one’s guess. What seems apparent is that there will be NO GOLF IN BOCA RATON in the near future. Boca Muni is under contract; a contract which is scheduled to close in the near future. Boca National is years away from completion. This coming Tuesday at the District’s offices, the District will hold a public meeting where financing and other consideration are on the agenda to be discussed for all to see. I encourage you to attend. Perhaps your questions will be answered but I sincerely doubt it. The District is still formulating its proposals and the District’s financing options for the $28MM projected cost are limited. Again thank you for participating…Al Zucaro, Publisher

  3. Thanks for reply. Why does the district need financing? Why can’t they move forward with the proceeds from the sale of the other course? I thought that was the point of selling. Sell high then for around a 1/3 of the cost replace it. Promote it attract sponsored tournaments, golf schools etc. We have all the world class golfers living up the road in Jupiter and Bernhard Langer here in Boca. Please let me know when and where next meeting will be.Thanks

    • The simple answer to your question is that the Boca Municipal course is under contract for sale by the City not the District. The District has asked the City Council to use the proceeds from that sale to assist in the District’s financing needs for the Boca National Golf Course build-out. To Date, the City Council has not made a commitment to meet that request. The District has been asked to provide answers to questions from the city. The answers are being produced and will be on the District’s agenda for their special meeting at 5:15 P.M. this coming Tuesday, 4/23. This meeting will take place at the District’s new headquarters on St. Andrews Blvd. You may find it valuable to attend. I will be there.
      If you would like to chat further with me about this or other matters, I can be reached via phone at 561-644-1665. Al Zucaro, Publisher

      • Mr. Zucaro, is the August 31, 2019 closing date for Boca Municipal definite? If so is there any leeway to hold off for another year?

        • Mr. Place, I do not know the answer to your question. I suggest that you send it to the council members directly but think they might not actually know. However, your inquiry suggests that they should discuss the issue in an open city workshop so that all the public can become aware that the purchase and sale of the course closing is scheduled and that Boca Muni will be close years before Boca National comes on line, if it ever actually comes on line. Thank you.
          Al Zucaro, Publisher

  4. The problem with the new course is that our city leaders paid above market for a property with deed restrictions limiting its future use. These deed restrictions limited what could be done with the site thereby limiting the marketability of the site and rendering it less valuable. Poor financial decision.

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