Town Discovers Operating A Golf Course Presents Problems

By: Rob Harris

The failure of private clubs occasionally leads local governments to step in and take ownership of golf facilities. Sometimes, this is seen as an opportunity to acquire for a public use golf resources that previously were limited to a small subset of local residents. Other times, governments have acted as a defensive measure to prevent the facilities from decaying or being put to arguably less productive uses, with the resulting reduction in property values. In both situations, governments find themselves fulfilling a previously unaccustomed role.

Several years ago, the Town of Woodbridge, Connecticut was confronted with the closing of a longstanding country club. Rather than have the facility be transferred to a developer who sought to build homes on much of the land, the Town negotiated to acquire the golf course.  The Town then outsourced operations to a company that had an existing portfolio of courses under management. Late last year, prompted by an impasse in negotiations with the management company regarding its ongoing contract, the Town  created a public commission to oversee golf course matters.

Early this year, the Town opted to put the management contract out to bid. The Town received proposals from several companies, including the existing manager. Notwithstanding certain Commission support for the existing manager, the Town proceeded to engage Billy Casper Golf to manage the club.

Now, the Town has announced plans to retain litigation counsel to commence legal proceedings against the former management company. According to the Town, the company owes $250,000, which accrued last year when the company breached starting in July its monthly $50,000 payment obligation to the Town.

Because much of the Town’s official business was conducted in executive session, it’s difficult to develop full and accurate information on what transpired. However, politics being what they are, public officials often find their actions second guessed in ways that do not exist in the private sphere.

This may be a simple collection matter, precipitated by financial pressures. Alternatively, there may be substantive defenses and claims that the management company will assert in response. In either scenario, a negotiated resolution, with or without the benefit of mediation, likely will come sooner rather than later.

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