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Golf course manager Rhoads offers lease to pay off course, gets termination notice
At its December 23 special meeting, councilmembers directed Laws to sound out Rhoads about his lease and begin possible negotiations. Prior to discussing the lease, Laws handed Rhoads a termination letter, which in short implied that regardless of whether or not a sale or lease occurs, Rhoads management contract with the city would be ended, effective 180 days from the date of the letter (December 30).
“The city may also terminate the Management Agreement for convenience pursuant to Section 14(d)(i). The City is exploring alternatives to the sale of the golf course which include a possible lease. Such alternatives may require termination of the Management agreement. You are hereby notified that, in the event the Management agreement is not sooner terminated due to sale of the golf course as described above, the Management Agreement shall be terminated effective 180 days from the date of this notice,” stated the letter written and signed by Laws.
City councilmembers will discuss the sale of the golf course at its Tuesday, January 7 meeting during the study session. Tuesday’s discussion comes on the heels of two public hearing attended by nearly 100 citizens who nearly unanimously suggested they didn’t want the golf course sold.
Rhoads, who has been the only golf professional and manager since the course’s opening in 1992, took over the overall course management in 2010 following a search for a new management team. Rhoads contract is valid through June 30, 2015.
In 2010 the then city council opted to hire Rhoads Golf LLC despite a search for a new management team, led by then councilmember Billy Siegel, who recommended hiring a Las Vegas firm, Par 4 Golf Management. Siegel provided the only vote for his own recommendation. Council voted 4-1 to hire Rhoads, leaving Siegel out in the cold.
According to the management contract signed by Rhoads and city officials, should the city consider the possibility of selling the course, a notice of possible termination must be given to the management team.
However, the letter’s final paragraph suggests that regardless of a sale, the management agreement will be terminated due to “convenience.” It is unclear what the definition of convenience is in regards to the management agreement.
Rhoads did in fact discuss the lease with Laws at the December 30 meeting. In his lease Rhoads is proposing a lease that will run through 2030. Rhoads Golf would pay the city $200,000 per year. He also suggests that perhaps he pay $192,000 toward the debt service and $8,000 to a city run capital account for future maintenance issues. His plan would pay off the $3.5 million debt after 17 years.
Rhoads’ lease stipulates that his company would assume the daily operation of the course and continue it as a public facility with daily and monthly rates. Community tournaments and events will continue to be offered as will junior and senior golf programs.
The lease goes on to delineate his responsibilities in regards to the golf course as well as the city’s. The important part, stated the report: the city will continue to own the course.
Rhoads, who didn’t read the termination letter fully upon receiving it, understood its ramifications later after dissecting it at home. “On December 30 I met with Jeff Laws and he handed me the termination letter,” said Rhoads. “It was pretty disappointing. What they’re saying is that whether they sell it (course) or not, I’m out. Unless I agree to they’re lease agreement.”
Rhoads says he understands the reason for the first part of the letter regarding the notice of termination if the city sells the golf course, but the final paragraph left him somewhat perplexed.
Contacted by The Leader, Laws was more circumspect, denying that the letter was an attempt by the city to get rid of Rhoads. “We can’t continue to go down this road,” he said in referring to financial issues regarding the course. He said the city is simply preparing itself if other alternatives, such as a lease, or other arrangements are made.
Laws also provided a proposed lease, put together by councilmembers, to Rhoads. In addition to requiring that the course remain public it echoes many of the stipulations cited by Rhoads in his proposed lease, which includes continuing with public tournaments, the promotion of youth and senior golf and continuing relations with local schools.
The kicker, said Rhoads, is in the city’s lease details regarding finances. For starters the city would like a 30-year lease and have Rhoads put $1 million dollars up front. Furthermore the city would require that for the first 14 years Rhoads Golf would pay the city $250,000 a year.
Other stipulations include:
- Requiring annual payments of $100,000 a year for the remaining 14 years.
- If the city were to lease the golf course the city would want to transfer all risk to the person leasing the golf course.
- The city would like to have a 60-day escrow to list the property for sale or lease.
Laws made it clear that the financial terms are subject to negotiations. However, all totaled, at the end of 30 years Rhoads Golf would have anted up a little over $6 million and the city still owns the golf course.
The Tachi Yokuts offered to buy the Lemoore course for $5 million and pay in three installments, including a $2 million lump sum in 2027.
Recently, it was announced at one of the public meetings that a group of investors had asked for additional time to pursue an offer. However, Laws said he hadn’t received any additional information from the group.
“I don’t know what’s going on down there,” said Rhoads. “I don’t want a 30-year lease. I just want to pay off the golf course. That’s a purchase plan, not a lease plan.”
