Orangetown Golf Lease Appears Threatened Future of Broadacres Remains in Doubt

BY ROBERT KNIGHT
CITY EDITOR
ROCKLAND COUNTY TIMES

A bitterly divided Orangetown Town Board Tuesday refused to sign a three-year “management contract” with a private firm to operate the town’s embattled Broadacres Golf Course next year, leaving the future of that nine-hold facility in limbo.

With only four of the board’s five members present (Councilman Thomas Morr was absent), the board split 2-2 on whether to approve the contract with Applied Golf to run the financially troubled short course for the next three years. They also failed to decide what to do in the alternative, with the two primary options appearing to be continuing to run the course themselves, at a substantial loss, or close the money-losing venture on the former Rockland Psychiatric Center campus in Orangeburg.

Town Supervisor Andy Stewart, the board’s only Democrat, had been hopeful that the council would agree to sign a contract with Applied Golf president Dave Wasenda, allowing his firm to run the beleaguered course for the next three years, in “partnership” with the town, and a 50-50 split of any potential profits.

After an hour of shouting and arguing over course history, finances and potential futures, however, he was able to gain the support of only one of the Republican Councilmen, Paul Valentine of Blauvelt.

Divided Board

Opposing the venture, at least so far, were Councilmen Denis Troy and Thomas Diviny, leaving the board bitterly divided 2-2 in Morr’s absence, with no way of breaking the deadlock.

Morr, it was noted, was at a business meeting and would be unable to attend and cast a ballot. Had he been present, he would have voted against the proposed contract according to Troy, who said he spoke with him by phone before the meeting.

Valentine, splitting from his three Republican cohorts on the council, praised the proposed agreement and said he was ready to make the motion to approve it, and to vote accordingly, at Tuesday night’s meeting. When it became obvious his motion would fail on a 2-2 tie vote, however, he opted not to make the resolution. His reasoning, Valentine explained, was that any vote that night would result in a 3-2 defeat, and seal the fate of what he views as a beneficial partnership between the town and Applied Golf.

Given the predictable outcome, he said he was reluctantly willing to wait another few weeks to see if one more Republican could be convinced to vote “yes” on the contract, thus generating a theoretical 3-2 approval.

Delay Risky

Wasenda cautioned the board that any delay placed the agreement in danger, however, because he said to be successful next year, his firm must begin planning, advertising and scheduling Broadacres’ operation by mid or late January “at the latest.”

As matters now stand, the Town Board has no more meetings scheduled for this month, and will not hold a business meeting until January 14, the earliest an agreement could be reached and approved.

Applied Golf is a private company headquartered in New Jersey which currently operates 12 other troubled golf courses under various lease arrangements with municipalities, golf clubs and other entities throughout the Eastern United States. Wasenda said the firm specializes in taking over financially troubled golf facilities and turning them around so they actually make a profit.

He has estimated that in 2014 the firm would continue losing money at Broadacres while it studies the existing situation there. They would try to break even the following year as they begin making operational changes, and would hopefully turn a small profit in the third year.

The contract would then be up for renewal, and Orangetown could either decide to continue partnering with Applied, or take the course back and try to continue making a profit on its own.

Plans Change

Wasenda acknowledged being contacted over the past several days by several Orangetown officials, and being informed that they were both skeptical of his earlier claims and the whole concept of entering a business “partnership” with him, rather than continuing to run the course themselves or actually leasing it to a private operator, with no town involvement other than collecting rent.

As a result of those conversations, Wasenda said he had significantly altered the terms of his original agreement, to make it more attractive to the town.

“Our goals (remain) to be a ‘partner’ with the town in this business venture,” he said in a letter to the council on Tuesday. “In an effort to stand by this commitment we have modified our management fees to $580,000 for 2014, $595,000 in 2015 and $620,000 in 2016 without any modification to our proposed professional services offered.”

“Please realize that our company has lowered our fees from the original proposal in an effort to work with the town, however, we feel the incentive driven ‘bonus’ provides us the opportunity to recapture some of that difference and in the process deliver a great product and remain profitable,” he added.

Lease Debate

The biggest drawback to an agreement with Applied appeared to be the reluctance of Councilman Thomas Diviny to go along with a “management contract” arrangement. He said repeatedly that he favored leasing Broadacres outright to a private operator, getting the town out running the facility altogether. The operator would pay the town rent under the lease arrangement, and take all of the financial risk of running the facility. Orangetown couldn’t lose money under such a lease arrangement, Diviny insisted, but would only gain.

Orangetown currently loses about $584,000 a year running Broadacres, Diviny added, and would both cancel that loss and gain rental revenue under his lease proposal.

Town Attorney John Edwards contradicted Diviny, however, and asserted that it would be “illegal” for Orangetown to lease Broadacres to a private operator.

Orangetown acquired the 65-acre facility as part of the much larger purchase of the former Rockland Psychiatric Center campus it bought from New York State a decade ago. The town has continued to operate it ever since, losing more and more money each year.

The town designated the golf course as “parkland” with New York State, and cannot divest itself of the facility without state approval, Edwards explained. That means the town must designate another 65 acres elsewhere at the RPC campus as parkland, and it must be of equal or greater value.

Diviny countered that the town already secured state approval to divest itself of Broadacres earlier this year, meaning a lease could be negotiated with a private operator. Edwards retorted that while this was true, the town still hadn’t replaced the land, and has so far only “unofficially” talked about a 35-acre parcel near Lake Tappan that still hasn’t been officially designated, and hasn’t met state approval for the land swap. Until the town officially designates this as parkland of equal value, the state hasn’t and won’t approve the transfer, he insisted.

Legality Debated

Edwards and Diviny continued their legal debate for more than 30 minutes as the two lawyers swapped opinions on the legality of Orangetown leasing Broadacres.

Edwards noted that he refused to draw up a proposed lease, as requested by Diviny, because it would have been illegal. He also refused to draft a “Request for Proposal” or RFP for the same reason, but credited Diviny for having eventually drafted his own RFP. It was that document, issued by the Town Board this fall, which led to the proposal submitted in November by Applied Golf.

Edwards said he was “pleasantly surprised” that any firm submitted any bid at all, and congratulated Diviny on his apparent success.

He added that this was not a “lease,” however, but a management contract, in which Orangetown was hiring Applied under a partnership agreement. Such a contract would be legal without Orangetown ever having to give up its’ parkland status at Broadacres, he said, and was more beneficial to the town and its taxpayers than a straight lease would be.

Diviny thanked Edwards for his faint praise but said he remained opposed to the Applied contract for multiple reasons. The town is taking a risk with the “contract,” the councilman asserted, whereas it would be guaranteed of making a profit under a lease agreement. Diviny also strongly opposed the data used by Applied in determining their potential profit and loss each year.

Wasenda said he used figures provided by Town Finance Officer Jeff Bencik, and Bencik strongly defended those figures under Diviny’s withering attack Tuesday.

Contested Figures

According to both Bencik and Wasenda, Broadacres currently loses about $424,964, after posting revenues of $584,000 against total expenses of just over $1 million.

Wasenda said Applied Golf proposes to generate revenues of $575,100 next year, $630,350 in 2015 and $665,600 in 2016. Net loss to the town would drop those same three years by $56,278, $203,773 and $213,523 respectively, with a total savings to the town at the end of the contract of 473,574.

By the time both sides agreed to continue disagreeing, at least for the time being, Diviny insisted on receiving several documents from Wasenda within the next week or two.

The company must show more clearly all of its expenses in operating Broadacres, including employee salaries and benefits, and must provide financial profit and loss statements for some of its other golf courses that would be comparable to Broadacres, Diviny asserted.

Valentine disagreed throughout the meeting with his fellow Republican councilman, saying that while he too originally wanted a lease, “I think this is a good idea, a good contract.”

“Half a loaf is better than nothing,” Valentine asserted, explaining he’d much rather sign a management contract with Applied Golf than continue having the town run Broadacres at its staggering recent history of losses.

“I was elected to be fiscally conservative,” Valentine added, saying anything the town does to cut the losses at Broadacres will be beneficial to the taxpayers. Looking directly at Diviny, he noted that the current plan estimates a savings of $286,000 in 2014 over 2013, and asked his fellow councilman rhetorically; “that’s not enough of a savings to satisfy you?”

“We don’t have to be part of a failure,” Valentine added, “We want to be part of a success, and I believe this will be a success.” He concluded by claiming “The ship is leaving the port, and we’d better be on board or we all loose.”

For his own part Wasenda warned that if he doesn’t get a contract by January, the offer to run Broadacres for Orangetown would probably be withdrawn. He said the firm is expert in running financially troubled golf courses, but must start the planning process for each of them by the first of year for them to be successful during the playing season from April through November.

A lot goes into the planning, including advertising and soliciting of additional golfers and rounds, purchasing materials, hiring and training staffs, upgrading greens and fairways and hundreds of other items, Wasenda explained. The staff must work exceptionally hard in the three months of January, February and March to insure a successful season, he noted. If he doesn’t have a contract by next month, he said he couldn’t guarantee the town he will even be interested in Broadacres.

He did promise to provide the Town Board with the additional figures and other documents they requested, however, both on the company’s existing golf courses and their financial predictions for the next three years at Broadacres.

Audience Supportive

Several residents spoke at Tuesday’s Town Board meeting in support o the contract with Applied Golf, starting with town golf course advisory committee member Michael Hogan of South Nyack, a 50-year resident. Government in Orangetown isn’t geared to make money on anything, Hogan asserted, claiming Broadacres lost $3 million over the past several years. The contract would benefit golfers and taxpayers alike, Hogan asserted.

Pearl River’s Michael Mandel called Broadacres “a millstone around Orangetown’s neck.” He too would prefer a lease to a management contract, but he called it “a good compromise over the current situation of staggering annual losses.”

Landscape architect Paul Kubarik of Tappan also supported the Applied contract, but urged the town to make sure it maintains the “beautiful” viewshed of the golf course from the nearby Palisades Interstate Parkway, which he called “breathtaking and priceless.”

Commercial and economic developer Hector May also strongly endorsed the contract, noting that he is a lifelong golfer and past president of the nearby Rockland Country Club in Sparkill. Citing losses of over $3 million in just five years at Broadacres, May said the town is obviously unable to operate such a venture and should turn it over to a firm that actually makes a profit running golf courses. “This dog don’t hunt,” May said of the town’s operation at Broadacres. Denial of a contract to Applied Golf over legal and political wrangling would be tantamount to “continuing the bleeding, and would be financially irresponsible,” May asserted.

Josh Dunf professed a “strong love” for Broadacres and urged the town to do everything in its power to keep it both operational and fiscally sound. He suggested the town consider running a golf school there, especially for youngsters, whom he claimed make up 27% of the town’s population yet remain virtually unexposed to the sport of golfing.

Larry Costello, another member of the town’s golf advisory committee, also strongly endorsed the Applied Golf contract and said he foresees even bigger savings than the firm is currently predicting.