Beach, golf course differ over contract

VIRGINIA BEACH

The city's private-public partnership with the Heron Ridge Golf Club is in the rough.

Ten years after the golf course opened, a city auditor's report claims the club is interpreting the contract incorrectly and excluding some income from a revenue-sharing formula.

The dispute has meant Virginia Beach has missed out on about $7,800 in income. It's a small amount now, but during the course of the 40-year contract, it could grow to as much as $10,000 to $20,000 a year, City Auditor Lyndon Remias said.

"The important thing, whether it's $5,000, $6,000, $7,000... is the city receiving the proper amount," Remias said.

At issue is whether green fees and cart fees for different levels of membership should be excluded from revenue calculations. Heron Ridge representatives think so. City officials disagree.

Beach officials and Heron Ridge's partners have met to discuss whether the contract should be changed.

"They're working together," said Glen Pierce, the PGA director for the course. "They've had some discrepancies and are trying to clarify that."

Sharing in Heron Ridge's revenue was meant to be an added benefit of the main lease, said Mark Wawner, who helps the city manage its private-public partnerships.

Under the terms of the deal, Heron's Ridge gave the city $25,000 on opening day, another $25,000 a year later and guaranteed that the city would get at least $90,000 a year in tax revenue. In exchange, the city provided the 185 acres, which it had bought for $1.6 million and spent $492,000 getting water and sewer to the property.

Heron Ridge has paid between $91,612 to $108,242 in each of the past eight years, above the guaranteed amount.

"It's a good partnership and a good relationship," Wawner said.

The dispute over green fees and cart fees is, " a very, very, minor issue," he said.

City officials included the revenue-sharing formula in the deal because they thought golf courses would be very profitable and help Virginia Beach draw tourists, Wawner said.

That never happened.

I n 2006 the city bought the former Virginia Beach Tournament Players Club for $4.5 million. That golf course opened the same year as Heron Ridge. The same company that manages Heron Ridge now also manages the former TPC course for the city.

"We built a whole lot of golf courses, and they're all struggling," Wawner said.

I t's unclear how much city officials expected to make from the revenue-sharing program with Heron Ridge. Wawner said he didn't know. Beach budget officials said they couldn't find a cost analysis in their records.

The city is required to keep such analyses for only about five years, said David Bradley, the Beach's assistant budget director.

Remias said the city should maintain such records for its public-private partnerships.

"They should be kept as part of the contracting, so that we have some monitoring of the agreement," Remias said.

Deirdre Fernandes, (757) 222-5121, deirdre.fernandes@pilotonline.com