I’m not optimistic. Assessed Value $204,615. Code enforcement fines and interest exceeding $97,500 and growing. Where is this problem headed?
PALM COAST, FL – March 17, 2016 – The City of Palm Coast Code Enforcement Board, at its March 9th hearing, instructed the city attorney to foreclose on the Matanzas Woods Golf Course property to enforce a lien for accumulating code enforcement fines and interest. The owner of the former golf course property was there to contest the decision.
The total owed by course owner, Group Golf LLC, at the time of the hearing was $97,500; and growing daily. The 2015 assessed value of the 276 acres making up the former Matanzas tract is only $204,615. The 2008 assessed value of the closed course was $2.35M. The sister Pines and Cypress courses, both open in 2008, were assessed at $4.58M and $3.76M respectively. The course has been closed since 2007.
August 8, 2015 marked the first Code Enforcement Board hearing relevant to the city’s foreclosure move. The owner of the Matanzas Golf Course, Group Golf, was cited for failure to maintain the course in a code-compliant state. Acknowledging that the course was closed, the city relaxed the maintenance standards to allow mowing only. Apparently, details of how this was to be done were not bilaterally understood.
The picture to the right shows the famous Matanzas Golf Course 18th hole island green in its prime days.
Long after the 30-day appeal of the August findings had expired, the city cited Group Golf for continued non-compliance and sent notice of a November 4, 2015 hearing. Group Golf did not attend that hearing, claiming that the hearing notice was improperly delivered (to an old address). The city claims they met all the legal standards for notification.
With the defendant absent, the Code Enforcement Board imposed a lien on the property for the accumulated fines and interest to date ($30,000). The next event was the March 9, 2016 hearing, by which time the aggregate amount due had grown to $97,500.
Group Golf argued the following:
They did not attend the November hearing because they did not receive proper notice of the hearing.
Group Golf cited language in the Palm Coast Unified Land Development Code (LDC), arguing that the level of maintenance required by the August 8th findings did not apply, since the zoning had changed (reverted).
Applicable LDC language:
Duration and extension (of a Development Order): The negotiated Master Plan Development Agreement which results from a master planned development application process shall have a maximum duration of five years or be phased to ensure that development under a Master Plan Development Agreement proceeds in good faith and the development of the master planned development is not abandoned and is not suspended in a manner which is adverse to the public interest. Upon the five-year term being completed or a phase of the master planned development not being developed in accordance with the phasing schedule set forth in the Master Plan Development Agreement, the City Council may, after obtaining a recommendation from the Planning and Land Development Regulation Board, extend the term of the Master Plan Development Agreement or the master planned development phase. In the interim, no development may be continued or permitted relative to the master planned development and absent an extension approval by means of a development order within three months of the date of expiration, the property shall revert to the zoning district which was assigned to the master planned development property prior to the Master Planned Development District rezoning. A property owner may initiate a request for an extension prior to expiration.
Group Golf argued that the Master Planned Development Agreement, issued in 2007, had expired after five years. Further, there was no public record of the prior developer requesting an extension of the Development Order or of the city granting one. Therefore, the property should have reverted back to the zoning in effect prior to the Development Order. Group Golf claims that the prior zoning was Agricultural. Therefore, they argue, the standards of maintenance under which they had been measured, cited and fined were too strict. They should not have been cited.
GoToby.com discovered the August 30, 2007 development Order issued to Grand Woods; an entity of Landmar, who owned the Grand Club at the time. It clearly shows the Development Order effectively changed the property zoning from GCC (Golf Course Community, not Agriculture) to MPD (Master Planned Development). GoToby.com believes that Group Golf’s zoning change argument is negated by the language of the Development Order.
On a final point, the city points out that Group Golf did not appeal the August 8th findings within the allowable 30-day period. During that time, they could have presented their zoning argument, but they did not.
What happens next?
Group Golf’s actions to date have yet to demonstrate a position of positive financial strength. Faced with ongoing maintenance costs, mounting fines, penalties and interest, I cannot project a positive outcome unless the city steps back from, what I believe, is a strong bargaining position.
I think Group Golf would like to see a negotiated solution, but the city holds the stronger hand. A negotiated solution would calm the current problem, but do little to solve the ongoing ones. The current softness in the golf industry, the estimated $5 to $9 million cost to reconstruct the course and clubhouse, and the neighboring residents’ strong resistance to alternative development options does not bode well for a happy ending.
Clearly, Group Golf will be unable to market the property under current conditions. They have vowed to use the courts to battle the city’s actions. This will only delay a solution and likely dig the property owners into a deeper hole.
Absent either a negotiated solution or Group Golf’s total compliance, what are the options open to the city? They could effectively allow a “short sale” in the same sense that banks let delinquent mortgage holders “a way out” where both sides shared the loss.
Another option would be to let the foreclosure run its natural course. In the event of a foreclosure auction, there may be a third party willing to pay enough to make the city whole, or at least happy. But if no such third party emerges, then title would pass to the city. In that event, I would not want to be on the City Council given the current attention being focused on persistent operating losses at the city’s only municipal golf course.
Clearly, bringing the golf course back will not be an option for the city. Instead, the city will be faced with the same neighbors that fought the Jim Cullis development, causing him to back off; the same neighbors that are now complaining about the lack of ongoing maintenance that led to the city’s current code enforcement actions.
Death of a Golf Course
Designed by Arnold Palmer and Ed Seay, Matanzas Woods has been described as a "beautiful monster" and was once named one of Golf Digest's "Best New Resort Courses". Here it is in its prime and after brought to you from Google Earth. The views are from the same perspective and show the 11th green (bottom left), clubhouse and practice green and the island 18th green.
March 31, 2005 (Prime time)
December 31, 2007 (Closed)
December 6, 2010
January 19, 2012
January 14, 2015
A moment of silence, please.