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By Beach and Park District Commissioner Craig Ernst
“Great things are not done by impulse, but by a series of small things brought together. ”
– George Eliot
Despite the City Council and Greater District’s gridlock, change may be coming to Ocean Breeze Golf Course in Boca Teeca. As most know, residential home developer Lennar agreed to purchase Ocean Breeze Golf Course from Wells Fargo after default by the prior owner. In turn, the Greater Boca Raton Beach and Park District independently offered to purchase Ocean Breeze from Lennar for $24 million in its effort to preserve the last large tract of green space in Boca Raton. The Beach District wanted Ocean Breeze and Lennar wanted western Boca Municipal. Lennar thus “kicked started” golf course wars by offering to buy Boca Municipal Golf Course, trading one course for another plus some money. The City agreed it was a good time to consider selling Boca Municipal and asked for open bids seeking the highest and best offer. The sale of Boca Municipal Golf Course to either Lennar or GL Homes is still in process with City staff and elected officials reviewing lengthy contracts and securing the best financial and contractual terms to benefit taxpayers. They’re at least three taxpaying groups to consider: District taxpayers (119,475 – 2013 US Census), City taxpayers (about 87,428 – 2013 US Census), and Boca Teeca taxpayers (about 2,400 per “places.findthehome.com”).
But what about Ocean Breeze? The District must acquire a loan of $35-$45 million to pay for the purchase of the property from Lennar and to pay for the redevelopment of the abandoned, run-down golf course facility, parking lots, and hotel. Although the City has offered to assist the District with a bond issuance, routine lender restrictions require the purchase price AND subsequent redevelopment investment be justifiable, including the appraised value of the property. There are typically three traditional groups of methodologies for determining value: 1) The sales comparison approach; 2) the cost approach; or the 3) the income approach. The District is actively seeking to justify the purchase price and redevelopment costs via financial projections, which include a world-famous golf academy and hotel. If these or other necessary enhancements are not acceptable to the community, the financial viability of purchasing and renovating the facilities appears to be questionable.
My comments at the recent District meeting were in response to Mr. Dukate’s feedback that the local government purchase is simply taking too long.
Is this new commissioner really asking Boca Teeca residents to remove the deed restriction?
Craig’s response: Yes, removing restrictions will increase the value of the property significantly allowing the District to obtain a public bond issuance supported by an appraisal that is justifiable to all District residents. If restrictions remain intact, the deal simply falls apart and the golf course and facilities remain abandoned and are not redeveloped as such.
Is Commissioner Ehrnst suggesting that an 18 hole golf course would generate more revenue than a 27 hole golf course? He had been inquiring about the financial impact of acquiring the property for $24 million at previous meetings so this would be very inconsistent to question the financial impact and then suggest reducing the revenue capability by 33%.
Craig’s response: My suggestions are based on trying to get an acceptable financing arrangement to speed the process along. Relaxing the deed restrictions accomplishes this objective. Abandoned property produces NO revenue, and the longer it remains abandoned, the greater the redevelopment cost. Of course, all future design and redevelopment proposals are subject to review and acceptance by homeowners and district taxpayers.
At the end of the day, we need viable ideas and flexibility. If there is no flexibility, the golf course purchase may or may not go through. Just like homeowners with a mortgage, the bank will not loan on a below-market appraisal.
Something must justify a higher value. I encourage everyone to keep the dialogue open and transparent. Let’s get the best ideas on the table and revitalize the area.