Wednesday, July 29, 2009

Golf Course deal falls through


The future of The Golf Course in southeast Cape Coral is once again in doubt as negotiations to sell the property fell through Monday.

Florida Gulf Ventures, the owner of the 175-acre site of the golf course, sent a letter to the Trust for Public Land, the non-profit organization looking to buy the course, indicating its termination of a purchase agreement.

The two parties had signed a purchase agreement on April 7 which outlined the appraisal methodology, but both sides are now at an impasse over the price and appraisal methods used.

"Florida Gulf Venture is very disappointed that TPL is unable to move forward with the terms as negotiated, and has in fact requested a reduction in our price by 30 -50 percent," the letter reads, in part.

The purchase of the golf course was to be one of the first steps in a plan to restore the course, which has been shut down for the past two years by Florida Gulf Ventures due to lack of profitability.

Under the plan, the Cape Coral Community Redevelopment Agency would buy the course from TPL and lease the course to a private company. The company would then restore the golf course and build a hotel and other amenities to attract players and make the course economically viable.

Now that plan appears in jeopardy, but CRA executive director John Jacobsen still has faith a deal can be struck between the parties.

"I'm very confident that we're going to get there. I think it's going to be deliberated for some time," Jacobsen said.

Jacobsen is nonetheless frustrated with the negotiation tactics he says have been used by Florida Gulf Ventures. In a memo sent Tuesday to CRA board members and city council members, he questioned the company's seriousness in the negotiation process.

"A major problem in this process to date has been that TPL ... has apparently had to deal with negotiators who are unwilling to negotiate, but with the logic of a two year old, wants what they want," the memo reads, in part.

William Nolan, president of WPN & Associates, a consulting firm representing Florida Gulf Ventures, agreed negotiations would continue.

"There is some continuing dialogue with the CRA. Where that's going to go, I don't know," Nolan said.

The exact difference in price between the TPL and Florida Gulf Ventures has not been divulged by either party. Nolan said he was not involved in the financial negotiations.

Representatives for the TPL could not be reached Tuesday.

The CRA's plan to acquire the golf course is contingent on TPL's ability to buy the course from Florida Gulf Ventures.

"That was the whole crux of the plan to have the TPL buy the golf course and then lease it to the CRA," said City Councilmember Dolores Bertolini, a main proponent of efforts to restore the golf course.

Meanwhile, the CRA has annexed the golf course and surrounding area - nearly tripling its size in the process - to be positioned to buy the course. State statutes prevent the CRA from spending money outside its boundaries.

There does not appear to be a back-up plan for the CRA should the TPL prove unable to buy the property, but Jacobsen said it was still prudent to annex the area because the deal will go through eventually.

"We need to be at the ready to purchase this golf course," Jacobsen said.

Cape Coral Golf Club owners seeking mulligan

They end talks with trust, hope to work with Cape

By Brian Liberatore • • July 29, 2009

The best and perhaps last hope of saving what once was The Golf Club of Cape Coral is unraveling.

But officials say there is reason to believe the 175-acre course could wind up in public hands, rehabilitated and reopened.

The property’s owners, Florida Gulf Venture, want more money before it’ll relinquish the defunct course to the public. On Monday, the owners terminated a purchase agreement with the Trust for Public Lands, a national nonprofit which was negotiating on behalf of the Community Redevelopment Agency.

The trust specializes in preserving green spaces and has the resources to purchase the property and transfer it to the CRA over time at no extra cost to taxpayers.

“I think this is just a stage in the negotiations,” said CRA executive director John Jacobsen. “It’s not over. There’s no place else for them (Florida Gulf Venture) to go.”

The course’s owners closed the course in 2006, claiming it was not profitable. Attempts to turn the land into a mixed-use development or sell it as a golf facility failed, as did efforts to sell the property.

The course has devolved into a weed patch weighing down the value of nearby property.

Late last year, the CRA announced plans to resurrect the facility and brought in the Trust for Public Land to negotiate a deal.

But after 11 months of negotiations, the owners and the trust could not settle on a price. In a July 27 letter from Ryan Companies on behalf of Florida Golf Ventures, company V.P. Kent Carlson wrote, “Florida Gulf Venture is very disappointed that TPL is unable to move forward with the terms as negotiated, and has in fact requested a reduction in our price by 30-50 percent.”

Neither side would disclose the amount of the purchase price. The property this year is assessed at about $2.8 million for tax purposes.

Save our Recreation, a group of neighbors that has organized to preserve the property as a golf course, is holding to the position.

“If (the owners) are sitting there and trying to hold the city and everybody else hostage, fine,” said Joe Mazurkiewicz, who represents the group. “We’ll wait them out. We’re not spending any money. It’s clear that the city is united in that this will be nothing but a golf course.”

(2 of 2)

Carlson’s letter goes on to say company officials had hoped the trust could secure federal and private grants to boost the purchase price. But the assumption anyone would issue a grant to boost the owners’ profits, Jacobsen said, is ridiculous.

“Any state, federal or private grants that (the Trust for Public Lands) would seek would be on the CRA’s behalf for the ultimate purchase of the property,” Jacobsen wrote in a memo Tuesday to the City Council, “not as a gift to the investors to meet any made-up value they placed on the property above what the property was worth.”

While the owners have severed negotiations with the trust, they’re still hoping to work with the CRA.

“There is some discussions with the CRA on other options,” said William Nolan, a consultant speaking on behalf of the owners.

But the CRA, Jacobsen said, is in not position to offer more for the course than the trust.

“I’m sorry that they couldn’t come to an agreement, but I suspect that calmer heads will prevail and they’ll come back to the table,” Jacobsen said. “We’ll get there. It just seems we’re going to be a little longer until we come to a solution.”

Tuesday, July 28, 2009

Termination Letter

See PDF Attachment to read the termination letter.

View as Image:

View as PDF: termination_letter_20090727.pdf

John R. Jacobsen's response to termination letter


To: City Council, CRA Board of Commissioners

From: John R. Jacobsen

Date: July 28, 2009

Re: The next phase of the negotiation process for the former Golf Club Property: posturing and/or bluffing

Last night, July 27, 2009, I received a copy of a letter from the Ryan Companies on behalf of Florida Golf Ventures to the Trust for Public Land unilaterally terminating the Purchase Agreement with the Trust. TPL and Florida Golf Ventures had signed a Purchase Agreement on April 7, 2009, after months of negotiations for a purchase price desired by Florida Golf Ventures, and to be confirmed by an agreed upon appraisal methodology.

We understand that one of the major delays in the negotiation process has been the unwillingness of the appraiser to provide a professional opinion of value. This unwillingness by the appraiser has resulted in a serious problem in determining a value under the Agreement. Florida Golf Ventures sought a value we understand that was in effect seeking a bonanza based upon the unsupported allegation that they could place a regional mixed use shopping/office complex on the Golf Club parcel--with a mixture of densities and intensities so huge for the site that no realistic market study would come close to justifying this dream, unless you were to say that this truly "transportation access-challenged site" could capture ALL of the market demand for the entire region, and then some. The appraiser and the parties were unable, as we understand, to come to an agreement on methodologies on which to base the appraisal that would justify such a value, and therefore the appraisal has yet to be completed.

Despite that, as we understand, TPL made a firm offer based on a previous appraisal done for Florida Gulf Ventures’ bank over a year ago when the property was in the process of refinancing. While the CRA is not privy to the negotiations between the two parties, we understand there had been some progress made.

This unilateral termination by Florida Golf Ventures in no way ends the negotiations, as we believe this is just another strategy on the part of the seller to try to get a higher price or an attempt to negotiate without TPL’s involvement, and directly with the CRA in the hope that the CRA will offer a better price than one offered by the Trust. We believe that the Trust will remain open to further discussion despite the termination of this Agreement, and look forward to a new round of talks between TPL and Florida Golf Ventures.

It is important to note that the termination letter indicates that there are some basic misunderstandings on the part of the seller. This may have been wishful thinking on their part or simply a desire to get a price higher than an appraisal would justify. “Florida Gulf Venture entered into the agreement with the understanding that TPL, with its resources and relationships, had access to state, federal and private grants to fill any gap between the community's expectation and ours. To date, we have not seen the benefit of your relationships to fulfill those early commitments.”

Any state, federal or private grants that TPL would seek would be on the CRA’s behalf for the ultimate purchase of the property, not as a gift to the investors to meet any made-up value they placed on the property above what the property was worth. It is also important to make clear that this process was not about the “community’s expectations and ours,” as Florida Golf Ventures states, it was about negotiating a fair price based upon the appraised value of the land.

As TPL staff and CRA staff discussed at a recent meeting held with the knowledge and consent of Florida Golf Ventures, without an appraisal, and with Florida Golf Ventures having prepared a preliminary plan that was not approved by P&Z and such denial affirmed upon appeal to Council, the only document that provided any indication of value was the appraisal done more than a year ago on the same property. This is the appraisal that the owners commissioned in relation to the refinancing of the property, an appraisal that TPL had permission from the owners to show the CRA staff.

As we understand, TPL’s offer, based upon that year old appraisal, was indeed generous--but one that at least was supported by an appraisal, rather than simply a real estate speculator's dream payday.

Now that the owners have unilaterally terminated the Purchase Agreement, we will have to wait and see what they will do next.

This is likely just a step in their negotiation process. A major problem in this process to date has been that TPL with its experience and maturity in negotiating real estate acquisitions, has apparently had to deal with negotiators who are unwilling to negotiate, but with the logic of a two year old, wants what they want. This is problematic, as their apparent lack of sophistication means that we can not be sure what move they may make next--as it may be motivated by inexperience and emotion, rather than logic.

The reality of the 2009 Cape Coral real estate market rather than the mentality of the 2004-era hype may soon come to the owners, but it could take longer . . . at this point I can only suggest patience--the Cape Coral real estate market at the moment seems to indicate that little will happen with the property, and we can wait until the owners decide what path to pursue.

Do understand that as the Executive Director to the CRA, I am not speaking for the Board as it has not taken up this matter, and has deferred to TPL to use its expertise and experience to handle this matter. I write to simply update you and to express my personal opinion based upon my sporadic interaction with the TPL/Florida Golf Ventures negotiations.

Know that I remain very confident that the property will ultimately be acquired by the CRA and we will be able to begin restoration of the Golf Club. In the interim, the CRA will continue with our commitments to pursue the legal requirements that will allow the CRA to acquire the property.

A copy of the letter of the Purchase Agreement Termination Letter is attached.


John R. Jacobsen
Executive Director

Community Redevelopment Agency of Cape Coral
1231 Cape Coral Parkway
Cape Coral, FL 33904
239 549-5615

Sunday, July 12, 2009


Please plan to attend Tuesday evening.

The Second Public CRA Workshop

Golf Club to be discussed

Tuesday, July 14th, 6:30 pm

Cape Coral Board of Realtors

918 SE 46th Lane (Park in rear at Club Square)

See you there!