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Golf cart company pays $1 a year to run business on city property
After securing a no-bid contract from the Bremerton City Council in October last year, Columbia Hospitality took over operations at the city-owned Gold Mountain Golf Club Jan. 1.
But just days prior to that, with no public notice or fanfare as 2012 came to a close, Bremerton Mayor Patty Lent and City Attorney Roger Lubovich signed a contract with the longtime former manager of the course, Scott Alexander, to run his private golf cart rental company, Alexander Cart Rentals, Inc., at the site.
The cost to Alexander to use 15,000 square feet of land at the course to run his private business is just $1 per year.
"As consideration for this lease, the Lessee agrees to rent carts to the Operator of the Golf Club at a substantially reduced rate," the contract states. "Such reduced rate being beneficial to both the Operator of the Golf Club and the City, the rent for this Lease shall be One Dollar ($1.00) per year."
In addition, the contract stipulates that the city "agrees to pay all charges for electricity, water, sewer, gas/propane, garbage, telephone, and for all other public utilities used at the premises."
The contract was signed Dec. 20, 2012, and runs through the end of this year. In addition to the $1 in rent, Alexander must pay a leasehold excise tax.
"The leasehold excise tax will be determined by the base lease payment Lessee paid for the Cart Pad in 2012 in the amount of $3,400 adjusted slightly to $3,600," the contract states.
Mayor Lent said this week that she did not negotiate the contract with Alexander, but did approve it. She also said that the city is not giving away taxpayer money to Alexander and his business by not having him pay utilities, noting that the city owned Rev. Martin Luther King, Jr. Library and Admiral Theatre also do not pay utility costs.
"What the city is doing is we own that pad. We own that golf course and to make money we felt Columbia Hospitality would have to negotiate all those things to make it work," she said. "Everybody that comes out to play golf will use those carts. If we got a break on those carts, it makes sense to me that we're willing to spend money to make money. I don't look at it as if we're giving anything away."
Lent said she wants to look at statements from the golf course for the first quarter of this year and evaluate income from greens fees, the driving range, carts, the pro shop and food service.
"We allowed Columbia to make the arrangements and we're looking at the bottom line — whatever it takes to market our golf course and make that a profitable situation for the city," she said.
Prior to Columbia Hospitality taking over Gold Mountain, Alexander was in charge. In 2012, he earned a course and facility management fee of $360,000, paid in weekly installments of $6,923. Plus, he was promised 10 percent of revenues over $2 million received from greens fees (not to exceed the management fee of $360,000).
While running Gold Mountain last year, Alexander paid $3,400 in rent for the 15,000-square-foot cart pad; $39,000 in rent for the clubhouse; and six percent of the gross revenue from cart rental and eight percent of the gross revenue from the driving range.
According his company's website, Alexander founded his business at the golf course in 1991 with a six cart trailer and 15 rental carts. The firm now has over 500 golf carts in its inventory, along with five trucks and trailers that can move 78 carts at any one time. The website boasts that during his 28 years as director of golf at Gold Mountain, the complex and his business "grew exponentially."
City Councilwoman Leslie Daugs, who used to serve on the city's Gold Mountain committee before Columbia Hospitality took over operations of the course, said she is not happy about the contract.
"Do I think it's fair that he paid a dollar and we're covering his utility cost?" she said. "No, I disagree with that because it looks like we're playing favorites. It looks shady."
Daugs said she only heard about the contract after questions arose during the city's recent utility rate study revealing the fact that the city was picking up the tab for utility costs associated with Alexander's golf cart business.
"I don't know if it is shady, but I'm thinking if you have a business you have to pay rent and some kind of utilities," she said. "Regular people have to pay rent and utilities. The fact that he never had to do that, I have a hard time with. Why do we give this business perks and not the other businesses that are coming into town. To this day, I don't know from a financial standing how he did with his business, but I know he's not hurting financially."
Daugs said that the council needs to reevaluate city contracts "because a lot of them don't come across our desk."
"It's not something that (the) council knew about because (the) council doesn't have to know about a contract unless it's over a certain amount," she said. "If it's over $25,000 it comes across our table and if it's not then it's something that the mayor knows about."