The Sebring City Council heard three quite different proposals Tuesday to lease the City’s golf course in a nearly 3 1/2 hour long workshop.
The City Council plans to make a decision on leasing the course at its Feb. 19 City Council meeting.
The order of the presentations was determined by Mayor John Shoop picking them from a random draw with the Blackmon Family picked first followed by H&L Golf Group and then Sports Med.
The Blackmon Family continues to finance the extensive renovation of historic Harder Hall and seeks the nearby municipal course as an amenity to the hotel while also maintaining it for use by the community.
Robert Blackmon said at its core their proposal is about relieving the City of a longstanding financial burden while preserving and improving a public asset.
Over the past four fiscal years, the golf course has lost the City $1,694,684 and is projected to exceed this year’s estimated loss of $333,045.
“This is not simply a decision between golf course operators,” he said. “It is a choice between short-term management proposals and a destination resort anchor proposal with long-term capital at risk.”
Blackmon said the golf course and Harder Hall have always been intertwined.
He noted that operating a golf course at a profit is a challenge.
“We do not need the golf course itself to be profitable,” Blackmon said. “We are willing to backstop any and all losses that may be incurred.”
The Blackmon financial terms call for a lease price of $1 per year, for a period of 99 years. The Blackmon’s anticipate spending $250,000 per year in capital improvements.
Harry Leonard of H&L Golf Group, based in New Jersey, said he can go into golf courses that are not profitable and make them profitable with little changes here and there and then move on to capital improvements.
He spoke of initial improvements and adding landscaping for the Sebring course.
Leonard said with the six full-time City employees currently at the golf course, there would be a savings of $30,000 per employee when they become part of H&L Golf. Also, there would be a $60,000 savings in the clerical work that the City does related to the golf course. That is a $240,000 savings with just those two things.
H&L proposes paying the City $200,000 the first year and annual increases of 3% per year. The 20th year would have a lease payment of $350,701.
Mike Stewart presented virtually for Sports Med explaining that the winter weather in North Carolina prevented the CEO/president of the company from traveling.
Stewart said they are proposing a long-term vision to transfer an under-utilized asset into multi-use sports and recreation campus that serves not only the residents of Sebring, but attracts visitors, while respecting the City’s financial realities.
Their vision is to engage parents and grandparents alike, which is a larger segment of the population than the golfing segment, he said.
The Sports Med business plan calls for reimagining the golf course with modern amenities and enhanced playability, developing a collection of flat fields and diamonds for soccer, baseball and softball, renovating the pro shop and restaurant and integrating family entertainment components (playgrounds, walking trails, event spaces, dog park, etc.).
According to Sports Med, the projected cost of redevelopment of the Sebring Municipal Golf Course is estimated between $20 million and $30 million.
The Sports Med five-year projection of revenue and operating expenses includes an annual lease payment of $1,798,110, based on $25 million financed at 6% over 30 years.
Council President Josh Stewart initiated the Council’s comments on the proposals.
The only major concern he had with the Blackmon proposal is the lease. It would be wonderful if they kicked in some money per year, but he understands the financial reality that a negative $250,000 is worse than getting the $1 a year lease payment.
On the lease term he would rather see something closer to 50 years or 25 years.
With H&L Golf Group, the idea of the payments is very nice, but he is concerned about performance and being able to deliver that. There was an explanation on their bankruptcy, but that happening so soon it is a big red flag so he has concerns there.
Sports Med has a really cool concept. This idea was visited in the past and the price tag was very high, Stewart said. It still puts the City at risk.
Councilman Leonard Carlisle agreed with Stewart that the term of the Blackmon lease should be shorter than 99 years with 25 years being plenty.
“With H&L Golf, anybody who has been in business is going to have financial trouble,” he said. “With a performance bond you really can’t lose.”
Stewart said the performance bond is a rolling one year agreement, so we could be back here in two years.
Carlisle noted that Council could be back here in two years with any of the proposals.
The Tourist Development Council proposed a sports complex for the golf course property, which is a great idea but the finances is what gets me, he said.
Councilwoman Rebekah Kobelschatz said she has similar concerns and thoughts on the lease performance of H&L Golf and the sports complex is similar to what Council has considered before.
Harrison Havery said the Sports Med proposal has the highest benefit if everything goes perfectly, but he is very hesitant of the lease payment of $1.8 million and if something doesn’t go right the City will be in the same spot it is now – funding a loss.
Havery is excited that the H&L Golf proposal provides money back to the City consistently. The Blackmon lease terms should be changed a little bit as 99 years is too long, he added.
Mayor John Shoop said they are good proposals, but what they need is a long-term economic benefit not just to the community, but to Highlands County. He was focused on the best overall proposal that will propel the City into the future.
Most of the public who commented supported the Blackmon Family proposal.
Local resident Dianne Juve noted that she grew up in St. Petersburg during the time the Vinoy Hotel was closed. It cost about $92 million to renovate the Vinoy and St. Petersburg has become an art center and its now an entirely different city.
HGTV gave Sebring an incredible start and now people have heard of Sebring, she said. If the City supports the Blackmons because they have that vision and create a resort, people will come.
Frank Cartisano, with the Sebring Historical Society, said one presentation claimed they would make the golf course a sports facility.
“I was thinking of the YMCA area and we are already doing that,” he said.
The other presenter said he would pay the City $250,000 and take over something that has lost $300,000, Cartisano said. He asked if that presenter was going to make that $300,000 and come up with another $250,000.
If the City isn’t smart enough to make it work, how is this other man going to change it and make it profitable for the City? he asked.
The Blackmon family wants to develop it and make it nice, Cartisano said. The Blackmon family has a proven their track record and laid money out of their pockets, he added.