Local Government and Politics, News

Lynn’s CFO recommends the city reject $340,000 Gannon Golf Course bid

LYNN — The Gannon Municipal Golf Course could be left without a management team and forced to close if the city can’t negotiate an agreement with the incumbent team before the end of the month.

The City of Lynn is seeking to lease the property to a firm that would provide professional management and maintenance for the 190-acre golf course, along with operating and managing the banquet/restaurant facilities, bar concession, function hall, pro shop and snack shop.

Golf Facilities Management Inc. (GFMI), co-owned by Chris Carter and Steve Murphy, has been overseeing the property since being awarded a five-year contract in Dec. 2013, which expires on Dec. 31.

Michael Bertino, the city’s chief financial officer, has recommended that the Lynn Park Commission, which meets on Tuesday night, reject the $340,000 bid submitted by GFMI to manage the course, as it was nearly $100,000 less than the city received last year from the lease, according to James Lamanna, the city’s attorney.

The Office of the Inspector General has ruled that the company’s alternate higher bid of $470,000, which was based on a potential increase in membership rates, is “considered a non-responsive bid that cannot be lawfully considered by the Park Commission,” according to Lamanna.

The Inspector General has informed the city that the current contract with GFMI can be extended for a year, if the Park Commission opts to reject the $340,000 bid on Tuesday night. City officials and GFMI would have to agree to the terms of a one-year extension.

If the bid is rejected and the company and city don’t agree on a one-year extension by Dec. 31, the course would be without a management team and would have to close. It’s the offseason for golf, but functions and events are still being held at Gannon. The city would then put the property out to bid again.

“Given CFO opinion, I believe a rejection is very possible,” Lamanna said. “Had the bid come in somewhere between $400,000 and $425,000, the likelihood a rejection would occur would have been substantially reduced … We don’t want to hurt them, but we want to do what’s in the best interest of the city.”

The firm pays $425,000 annually with its current lease, along with an additional $39,000 revenue share to the city from an increase in membership rates put in place about a year ago. Under the new Request for Proposals (RFP) for the property, 50 percent of revenue generated from potential rate increases would go to the city.

Bertino has recommended that only bids higher than the amount the firm is currently paying be accepted, according to Lamanna. Bertino could not be reached for comment in time for the Item deadline.

Carter said GFMI submitted the best bid it possibly could. He said the biggest impact on the golf industry is the minimum wage increase, which is incrementally increasing each year starting next month until it hits $15 an hour in 2023. He said the increase is going to impact all of the company’s staff, which also has significant equipment needs. Those costs brought their bid down.

Carter said he was surprised with the news about the second bid being rejected, but understands that the RFP required respondents to submit bids based on current rates, rather than potential rate increases. He said GFMI hopes to work out an agreement with the city to continue overseeing the course.

“It’s really in the city’s hands,” Carter said. “We’ve done what they asked us to do. We’re just concerned with our contract ending on Dec. 31. We would like to get something in place before then. My main concern would be making sure we can still operate the golf course as of Jan. 1.

“We hope to be working for the city of Lynn going forward. We really love and enjoy being up there. It’s a wonderful asset to the city and we hope to be involved in it going forward.”

If the bid is rejected, there’s a 45-day period before the city can put the property out to bid again. Lamanna said the city’s law department will be recommending multiple bid options to attract more interest. GFMI has been the only respondent both times Gannon has been put out to bid.

One option would be to allow bidders to bid on a five-year lease, as recommended by the Inspector General, with a possible one-year extension. The most recent RFP was seeking bids for a lease period that would be from Jan. 1, 2019 through Dec. 31, 2023.

A second option would allow bidders to bid on a 10-year lease, which Lamanna said would make it easier to financially afford to purchase or rent equipment to operate a golf course, restaurant, bar and banquet facility. The Park Commission would be the authority on deciding which option is selected by the city.

Lamanna attributed the past lack of interest in the property due to the general feeling that golf is a declining sport, which doesn’t attract younger people and has an uncertain future.

In October, Gannon Golf Course, located on Great Woods Road and built in 1929, was put out to bid for the second time, as required by the state to comply with bid laws for open space following unanimous approval from the Lynn Park Commission.

Before the city’s requirement, the Gannon Building Association, a non-profit, had a long-term lease to manage the golf course.

Sean Cronin, senior deputy commissioner of local services for the Department of Revenue, who oversees the city’s budget, has relayed to city officials that in order to achieve a balanced budget, they need to have better revenue from both the Gannon Golf Course and the Lynn Auditorium.

Bertino has required that 35 percent of the lease revenue go into the city’s general fund, up from the 10 to 12 percent required during the first bid process. The remaining 65 percent of the lease revenue would go toward the city’s revolving account for Gannon, which are funds that go toward fixing the course.

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