Advance Golf Partners abruptly ended its relationship with Oakmont July 14, sending the OVA scrambling to find a temporary operator and a new lessee to keep the courses open.
In a letter to members, AGP said it was sorry to have to leave, but it would not disclose its reason.
“There is a huge hole in this story that we simply can’t talk about. We truly wish we could, but we can’t,” said OVA President Steve Spanier in his report at the July 21 board meeting. “Our lawyers have very good reasons for telling us not to talk. If you were us, and your legal counsel advised you not to talk, and you talked anyway, you’d be guilty of not correctly serving the community by upholding your fiduciary responsibility. I’d love to hold a town hall meeting and tell you everything I know. Not being able to explain this situation and defend our actions is the most difficult thing of all.”
AGP took over operations of the courses Feb.6 with great fanfare and promises of a brilliant future for Oakmont golf. The west course was opened for golf in May and renovations had been started on the former Quail Inn and the Pro Shop on the East Executive Course along with upgrades to the courses themselves. Golfers have returned to the courses in significant numbers not seen in years, perhaps in part due to pandemic lockdowns.
Tom Kendrick, OVA vice president, presented a financial accounting provided by Treasurer Elke Strunka. The total costs for the golf asset to date is $4.3 million, which includes the purchase price of $3.6 million, real estate commissions and escrow of approximately $89,000 and a loan pre-payment penalty of $250,000. Another $297,000 accounts for tenant improvements such as services, furnishings, construction, equipment, HVAC and fees and permits. Kendrick said AGP retained about one percent of improvement costs, or $2,847. AGP returned $75,000 of the capital reserve fund, when the lease terminated. “The money that was spent was invested in the property. It’s ours,” he said.
“There will be additional costs related to improvements (going forward),” he said. “We plan to account for all the work that is being done. This is work we have to do and will take full advantage of as we go forward. There is complexity everywhere you look and we are dealing with it.”
Kendrick said a wholly owned subsidiary called Oakmont Village Property Corporation (OVPC) has been created to “define and carry forward” all reporting and accounting for the operations of the golf asset. He said OVPC will allow for independent reporting, with “obvious cross over,” in some areas, but with the ability to keep things separate from other OVA business and more understandable for members.
Spanier said despite the unexpected interruption, he is very optimistic that a new lessee will be found in less than two months and the current temporary operator CourseCo, Inc. is expected to be one of the bidders along with Billy Casper Golf.
Spanier said he was not surprised that several companies offered to run the club on short notice. While he said he could not discuss certain details, we are “confident that what happened to AGP is extremely unlikely to happen to either of the two operators we’re considering.”
“CourseCo and Billy Casper Golf are interested in long-term lease agreements to run the club. Following competitive bidding and negotiation periods, we hope to have a lease agreement in place with one of them in the next 60 days,” he said.
CourseCo is a local bay area company and Billy Casper Golf is a national owner operator of 140 golf clubs across the country.
The construction is expected be completed in September.