The Flagler Beach City Commission this evening voted 4-1 to approve a settlement with Flagler Golf Management, the company that took over management of the nine-hole Ocean Palms golf club at the south end of town in 2015 after years of disuse.
The settlement is only a potential resolution. It may be more easily grasped as an agreement to delay further hostilities.
It gives Flagler Beach Golf Management nine months to find a buyer that would assume the club-management lease with the city. If a buyer is secured, the lawsuits end, the city refunds Flagler Golf Management all rent payments made into an escrow account at the court since the beginning of the dispute, and waives all unpaid utility bills. (Some of those payments have been paid into the escrow account, some have been paid directly to the city.) That would not be a small gift–or incentive–for Flagler Golf Management to find a buyer.
If a buyer is not found, the city, which owns the land, will get possession of Ocean Palms, the rent payments will all still be due, as will all owed utilities, as will attorneys’ fees. On the other hand, Flagler Golf Management’s lawsuit against the city will also resume. If the management company violates settlement terms before the nine months elapse, including through destruction of property, the settlement will be voided.
The company questions whether the city itself complied with the lease, accusing the city of unfairly treating the company, giving it little time to address failings and operate profitably.
The commission’s vote took place in the open-session segment of a special meeting, its first half hour held behind closed doors. Local governments may hold closed-door sessions to discuss unresolved litigation.
Commissioner Rick Belhumeur cast the lone dissenting vote, after some hesitation. “I just don’t like the lease we’re stuck with,” he said. The lease potentially could extend to 2050. Short of restructuring it, he said “I don’t want to pass it through to somebody else for 27 years.”
But while the lease-holder has the option to renew twice for 10 years after the lapse of the initial 15 years, there’s a considerable condition: the city can reject the renewal if average gross revenue at the course is less than $200,000 a year. The average may not include sums from lessons or the pro shop.
The continuation of the lease under a new buyer also enjoins that buyer from doing anything with the property other than run it as a golf course. The city has no intention of using it for any other purpose. Residents around the golf course have worried from time to time about the city turning it over to development.
The relationship between Flagler Golf Management and the city has not often been good since it started eight years ago. Some of the difficulties were unintentional.
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The lease was signed in 2015. Hurricane Matthew struck in 2016, Hurricane Irma struck in 2017, and the city ripped through large parts of the course that year with a drainage construction project that shut down operations. Some of the challenges were self-inflicted, at least on Flagler Golf’s side: its owner, Terry McManus, was sentenced to an unusually harsh four-year prison sentence on a DUI conviction in October 2021. His wife, Tiffany “Belle” McManus, took over.
Though Terry remains a managing member of the company–his and Tiffany’s name remain as the owners of the company, according to the documents they filed with the Division of Corporations this year–he signed a power of attorney allowing his daughter, Jordyn McManus, to make all decisions in his name.
But even under Terry McManus, the city and the golf management company traded barbs and accusations of poor management, poor accounting and unpaid rent, or unfairly charged rent, when Flagler Golf Management took account of the effects of storms and construction. There was a reset. Construction ended. The club rejuvenated. Then in July 2019, Terry was arrested, and his case occupied him until his sentence more than two years later, when he turned the business over to his wife.
Covid struck next.
Fifteen months ago the city voted unanimously to break its lease with Flagler Golf Management and evict it (Belhumeur had just lost his re-election bid and was to be off the commission until last March). The city cited that long list of conflicts, allegations of poor or lacking accounting and the tumultuous contractual history. The company sued the city days later.
Ocean Palms has continued to operate under Flagler Golf Management, though City Commission Chairman Eric Cooley said the facility was “in compliance with the finances,” but not necessarily with the way the course should look. He called that part “out of compliance,” until the city attorney suggested he not go further.
City Attorney Drew Smith negotiated the settlement with Flagler Golf Management during a settlement conference earlier this month. The conference was attended by City Commissioner Scott Spradley, who is also an attorney, but he attended in the capacity of a city representative, since a representative was required to be at the table.
“Should anything come up with the golf course, you hear from the community or from staff or just from this point forward for this period,” Smith advised his commissioners, “just remember to call me if anything you hear, any chatter. Call me and let me know, keep me in tightly in the loop on that, on what’s happening with that golf course.”
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