DAYTONA BEACH — About a week before an Arizona company was hoping to buy the pair of golf courses at LPGA International, city commissioners might have derailed the pending sale.
   

By the time Mayor Derrick Henry gaveled the meeting to a close, Consolidated-Tomoka Land Co. President and CEO John Albright was afraid the sale his company had been working on for five months had just slipped away. Even worse, Albright is worried no one else will want the golf courses his company bought from the city two and a half years ago.

“What buyer in his right mind will want to close on this after what just happened?” Albright said late Wednesday night. “What kind of welcome mat was this?”

Albright said he was just trying to clean up an agreement to get C-Bons, also known as CBIGG Managment, comfortable with closing on the sale. The master agreement amendments would be crucial to any sale of the golf courses, he said.

“We didn’t expect this,” Albright said.

Dale Folmar, CBIGG’s vice president of operations, said he didn’t walk away from the deal when he walked out of City Hall. He said Thursday he’s still deciding what he wants to do, but he’s “disappointed and frustrated.”

“We have to strongly consider if we want to be supportive of a city that has so little trust,” Folmar said.

He found comments commissioners made about him and his company “alarming” and said it was a first in his three-decade career.

“It was offensive when the mayor said maybe this isn’t the place for you,” Folmar said.

When the sun came up Thursday morning, Albright was still befuddled by what happened in commission chambers 12 hours earlier.

“We, and I, didn’t realize that having an experienced, well-capitalized owner and operator of golf clubs who was willing to come in and buy the golf club and deploy new capital to bring it up to expectations of the community and the LPGA was going to get a rough reception at the City Commission,” Albright wrote in an email Thursday morning to the mayor and city commissioners.

“What do you want me to tell the 125 employees at the golf club?” Albright said in the email. “What do you want me to tell the LPGA? Who else would want to submit them to this process? I am open to ideas. I would think we all want new companies and new taxpayers to come into our community so we learn and benefit from best practices and new capital. New taxpayers are good to diversify the economy and grow tax base. What was before the commission was not an approval of the sale; it was simple items to clean up an old master agreement.”

CBIGG, a U.S. subsidiary of a Chinese conglomerate, has a binding contract to buy the two LPGA courses for $3.6 million. The proposed sales price is more than double the $1.5 million Consolidated-Tomoka paid the city in early 2017 to acquire the courses along with a three-hole practice course and a two-sided driving range, clubhouse, pool, and fitness facility.

But the sale was worth more than $1.5 million to the city. Consolidated-Tomoka gave the city about 30 acres of land around Municipal Stadium. And the Daytona Beach-based company made good on its promise to the city to make improvements to the LPGA golf courses, including spending $300,000 in the summer of 2017 to replace the greens at the Jones golf course, the primary tournament course.

Consolidated-Tomoka also committed to pay the city a $1 surcharge for every round of golf played, which could have reached $700,000 if the company had retained ownership of the golf courses for 10 years. The company has so far paid the city $140,000 in annual per-round surcharge fees.

One of the amendments commissioners had been slated to vote on Wednesday night proposes to transfer the requirement to pay the city the surcharge, which demands a minimum of $70,000 annually, from Consolidated-Tomoka to CBIGG. The surcharge fee would end when CBIGG paid the city a total of $560,000.

On its website, CBIGG describes itself as a subsidiary of a Hong Kong-based conglomerate called C-Bons Group engaged in “real estate, tourism, personal care products, pharmaceuticals, textile and media industries.”

Formed in 2012, CBIGG owns 26 golf properties across the country, including the Sweetwater Country Club in Texas that once served as the headquarters for the LPGA. The golf courses at LPGA International would be CBIGG’s first in Florida.

If the sale falls through, that will be a relief to some golf course members and LPGA neighborhood homeowners who have been worrying what kind of shape the 657-acre LPGA Golf Club property would be in under CBIGG’s ownership and whether the Arizona company wants to turn some of the greens and fairways into homes.

Mark McCommon, who lives near the courses, told city commissioners he doesn’t think the seven-year-old CBIGG has enough experience to take over the two courses.

“We will lose tournaments, we will lose play and the value of all of our homes will be reduced,” McCommon said.

Folmar acknowledged it’s not a decades-old company. But Folmar, who’s based in Texas, said he has worked in the golf industry for 33 years and many other CBIGG employees have spent long careers in the golf course ownership and management business.

Folmar said his company is not engaged in real estate development. CBIGG is focused on the $300 million worth of golf courses it owns, he said.

That didn’t ease the worry of either McCommon or Skip Hammers, a homeowners association president who has lived in the LPGA neighborhood for 12 years.

“The pending sale is really a fear of the unknown,” Hammers said.

Hammers is afraid it could become like the Indigo Lakes neighborhood golf club that’s owned by a foreign company trying to use half of that 18-hole course for homes. Scott Bullock, vice president of development for Consolidated-Tomoka, noted during the meeting that the LPGA golf course property would need a rezoning approved by city commissioners before that could ever happen.

Bullock also noted that Consolidated-Tomoka “owns quite a bit of property” around the LPGA golf courses, so the company has “a vested interest” in what happens on the land.

Folmar said his company has already drawn up plans for improving the LPGA courses, starting with the clubhouse. He said a lot of maintenance has been deferred on the property, and his company intended to spend hundreds of thousands of dollars in the first 90 days it would be the owner.

“Our intention is not to run it into the ground,” he told city commissioners before they voted to delay any action. “Our ultimate goal is to create a great golf course for people.”

Hammers said the LPGA neighborhood revolves around the two courses, and decisions that will be hugely consequential to homeowners there shouldn’t be rushed. City Commissioner Ruth Trager also wants to downshift.

“I do not feel there’s any reason this should hurry,” Trager said. “I don’t like being rushed on something this important to our residents.”

City Commissioner Dannette Henry, the mayor’s sister, suggested CBIGG officials meet with LPGA neighborhood residents before closing on the sale to help citizens catch up with what’s happening.

Bullock said there was no intention to hide anything in the land sale, but he pointed out it was a transaction between two private companies. He said the request before city commissioners was just to clarify “a lot of old legal documents.”

“We didn’t think of it as your approval for the transaction,” Bullock said.

Although homeowners are just learning details of the sale this week, the deal is inches from the finish line. Adam Rieck, an attorney for CBIGG, said the company can’t slack much off the pace it’s been keeping.

Rieck said “if it extends too long” CBIGG may need to look for another opportunity.

“If it doesn’t go right now, I don’t know what happens,” said Rieck, who’s based in Dallas. “You can’t stand out there forever waiting.”

Those comments didn’t sit well with the mayor, who reminded Rieck there are a lot of homeowners around the golf courses.

“Your tone doesn’t resonate well with the community,” Henry told Rieck.

Henry said he doesn’t know enough about CBIGG and added he didn’t “like anything about their presentation.”

“We have a history of working well with Consolidated-Tomoka, but at some point we have to look at the residents, too,” the mayor said.

A local entity looked into buying the LPGA golf courses, but that party’s offer was 40 percent less than what CBIGG has been prepared to pay, said City Commissioner Rob Gilliland. That local buyer struggled to figure out how to break even, Gilliland said.

It’s still possible the sale could be revived, but on Thursday Albright and Folmar were still raw from city commissioners’ comments. Folmar said commissioners didn’t understand what they were voting on and “completely lost scope.”

“They were just voting on the surcharge and they got into the integrity of who we are,” Folmar said.

Albright hopes things can be worked out.

“Believe me, the community is much better off having a sophisticated golf course owner/operator involved with the LPGA who can bring relationships and capital to bring the club to its full potential,” Albright said.