LYNN — The clock is ticking for the city and the incumbent management team to negotiate a one-year extension to continue overseeing Gannon Municipal Golf Course after their bid for a new contract was rejected by the Lynn Park Commission Tuesday night.
If an agreement can’t be reached by the end of the month, Gannon will be left without a management team and the course will be forced to close. Following the rejection, the city can’t send the property out to bid again for at least 45 days.
The City of Lynn is seeking to lease the property, which is located on Great Woods Road and was built in 1929, 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.
The Park Commission unanimously rejected a $340,000 bid from Golf Facilities Management Inc. (GFMI), the incumbent team, because it was nearly $100,000 less than the city received last year from the lease, according to Steven Babbitt, chairman of the commission.
GFMI, co-owned by Chris Carter and Steve Murphy, has been overseeing the property since being awarded a five-year contract in December 2013. It expires on Dec. 31. The team was the only respondent to the city’s Request for Proposals (RFP) and was vying for a new five-year contract.
“I have nothing against the operation,” said Babbitt. “I think the course is run very well. I think it’s more the financial consideration of where the city is. This is concern over city finances.”
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. The RFP called for 50 percent of the revenue generated from potential rate increases to go to the city.
In addition to rejecting the bid, the Park Commission also gave the green light for the city to commence negotiations on a one-year contract. In the meantime, the city’s law department will draw up a new RFP to attempt to lease the property again with either a five-year or 10-year contract option, to attract more bidders.
James Lamanna, the city’s attorney, said there may be no interest in the extension from the incumbent. The amount that can be negotiated for the one-year extension is capped at 25 percent more than what the firm is paying for its current lease base, or a little more than $530,000.
Carter said the challenge of a one-year lease would be the company’s equipment needs for the course or keeping staff that weren’t guaranteed jobs.
“We will discuss with the city to see what our options are,” said Carter. “We want to move forward and do the best thing for the golf course and functions we have booked.”
If an extension can’t be negotiated by the end of the month, when the firm’s contract expires, the golf course will be forced to temporarily close. It’s the offseason for golf, but functions and events are still being held at Gannon.
Carter said GFMI submitted the best bid it possibly could. The incremental minimum wage increase, which begins increasing in January and will hit $15 in 2023, is going to affect all of the company’s staff. That increase along with the firm’s significant equipment needs brought their bid down.
The company had also submitted a higher $470,000 alternate bid, which was based on a potential increase in membership rates, but the Office of the Inspector General ruled that the bid could not be lawfully considered by the Park Commission.
Lamanna said the RFP asked for bids to be based on current membership rates, and other respondents weren’t given the option to submit bids based on potential increases.
Carter asked the Park Commission to consider the $340,000 bid and factor a rate increase that could be coming next spring in good faith. He said that would raise the amount of what the firm would be paying annually in the second through fifth year of the lease significantly.
But Lamanna advised the commission against considering anything above the bid that was before them. If the commission approved the bid, he said the city would “be bound at $340,000 and cross our fingers that a rate increase would occur.”
Sean Cronin, senior deputy commissioner of local services for the Department of Revenue, which 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.
City officials have 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.