The principals of a company that operates a local golf course warn that Forsyth County is about to pay $9 million too much for Lanier Golf Course and are doing so, in part, to settle a lawsuit.
In a recent letter to the county commission, Sequoia Golf and the Canongate Golf Clubs President and CEO Joseph Guerra questions a proposed deal between the county and Affiniti Golf Partners of Alpharetta for the 172-acre site.
According to the plan, the county would pay $9 million and an entity named Affiniti Lanier LLC would pay $3 million to course owners Jack Manton and George Bagley Jr. In turn, the county would lease the course to Affiniti for 99 years.
The proposal, which has not been signed, does not name the tenant's principals.
Sequoia and Canongate operate Windermere Golf Club and have made an offer for Lanier Golf Course.
Guerra's letter contends the $12 million price tag for Lanier is "at least four times the fair market value given the condition of the property, the requirement of capital improvements and the prices recently paid for competitive properties that one could argue are better located and in better condition."
The county has spent about $24,000 to have the golf course off Buford Dam Road appraised at least five times, though the amounts of those appraisals have not been made public.
Commissioner Jim Boff, whose district includes the course, said the most recent appraisal was in June 2009.
Commissioner Jim Harrell, who worked on the Affiniti deal with Boff, has said the county buys properties based on their highest and best use. In the golf course's case, that would be as a development.
The site is zoned for agricultural use, but is designated by the county's future land-use map as an activity center.
That designation, according to the county’s comprehensive plan, means a development on the property could consist mostly of commercial use, with residential structures mixed in.
Manton has said the property could be worth $25 million to $35 million as an activity center.
He and Bagley filed suit against the county in 2007 after the commission denied their request to rezone the site to a master planned district.
Wellstone LLC wanted to buy the property, contingent upon its rezoning, and build a 772-unit residential development with a 300-unit continuing care retirement community.
The company joined the course owners in the suit, but dropped out early in 2009 after moving its headquarters to Texas.
The case is expected to go to trial within a few months.
In his letter, Guerra also maintains the $12 million is really intended as payment to settle the lawsuit “and not in line with the spirit, intent or historical acquisitions associated with the funded $100 million green space bond.”
Boff said the most recent appraisal of the property is still valid and shows the fair market value of the course.
He said the criteria used to gauge the property’s value does not include whether the amount would settle the case.
“You can review it and I don’t think anywhere you’ll see, ‘Oh by the way this will get you out of a lawsuit,’” Boff said.
Guerra also took issue with the fact the county has not conducted a request for proposal, or RFP, process for the golf course. He suggests commissioners thoroughly investigate any entity making a proposal for the site.
“They’re making decisions in a vacuum as opposed to looking at the full spectrum and strengths and weaknesses of the best practices as it relates to golf course contracting,” Guerra said Monday.
“I’m sure that if they put this out to RFP that Affiniti Golf and Sequoia Golf would not be the only two proposers. There would be many proposers.”
Guerra said his company has since 2003 acquired 23 properties in the Atlanta metro area, including one in Forsyth, and consider “ourselves expert at the valuation and acquisition of golf course properties.” The bottom, he notes, “has fallen out of the market.”
Sequoia has made an offer and countered Affiniti’s bid.
In his letter, Guerra described the proposal sent Friday as “reluctantly ... in desperation and in direct response to top the ‘air of inevitability’ associated with the highly publicized proposal made by Affinity Golf outside any RFP process.”
Guerra said he never got a straight answer on why Boff and Harrell seemed to prefer Affiniti’s offer to the ones his company previously submitted.
In a revised offer that Guerra said mirrors what Affiniti has offered, Sequoia proposes the county buy the course for $12 million, with the company putting up $3.5 million of that and entering a 99-year lease.
As a result of the higher amount, the company would have to cut the funds available for improvements to the course.
Boff said Sequoia’s first proposals implied the company would buy the golf course and “was not what the situation reflects, [which is] the concept that the county would own the property completely and there would be somebody who would help defray the cost of the golf course by paying upfront lease money in order to operate the golf course.”
Sequoia would spend no more than $500,000 on renovations, which “the golfing consumer would either not notice or likely take for granted.”
Those improvements could include maintenance equipment, drainage and bunker renovation.
Sequoia has also pitched two options for membership. One would offer all county residents an opportunity to become Canongate Golf members with no upfront initiation fee for a year.
New residents would have six months from the date of their housing purchase to join. Monthly dues would be $150.
“In essence, Canongate Golf is a proxy for public golf: It has all the benefits of being a member of a private club, but at a price of a typical daily fee round of golf,” Guerra said.
The second option would be 60 percent private and 40 percent public play.
Affiniti has proposed spending about $600,000 in improvements, which include new signs, clubhouse renovation and removing the pool and tennis courts.
The company has proposed keeping Lanier a public course, but has not released details regarding fees.
Boff pointed out that the deal with Affiniti is not finalized and that the board hasn’t discussed the golf course situation enough to have determined whether there will be an RFP process.
“I’m certainly not against an RFP,” he said.
Commissioners postponed discussion of the issue at their March 9 work session.
Boff said the matter could resurface in the coming weeks.