'Patch' bidders call city's rejection 'ridiculous'

Group vying to operate golf course told it must have business license

Questions are being raised again about the fairness of Augusta's procurement process after the city rejected its only offer to privately operate the municipal golf course because the company lacks a business license -- something its organizers say is impossible to obtain until it takes over the public course.

"We think it's a Catch-22 situation," said Scottish golf course developer Brian Hendry, one of three partners who incorporated The Patch in Augusta LLC to bid on the management job.

The company's fee proposal was returned unopened, and its attorney filed an appeal with the Procurement Department on Wednesday.

The Patch in Augusta is a venture among Hendry, Savannah-based developer Michael J. Kistler and Scottish golf pro Ronald Macdonald. The group wants to upgrade the course and clubhouse into a play spot for Masters Tournament patrons, keeping green fees for local players "fair and reasonable" the other 51 weeks of the year, according to a business plan on file with the procurement office, which The Augusta Chronicle reviewed under an open records request.

The plan says that by charging a premium during Masters Week, the company could earn an extra $147,000. That figure is almost what "The Patch," or Augusta Municipal Golf Course, cost taxpayers last year.

In 2009, the operation off Highland Avenue lost $170,000, and this year it is expected to lose $150,000 to $200,000, according to Recreation and Parks Director Tom Beck.

Amid continuing debate over whether to privatize the course, sell it or continue subsidizing it to accommodate its working-class regulars, the commission voted in June to solicit management proposals, then make a decision based on what kind of responses came back.

A dozen invitations to bid went out, but Hendry's company was the only taker, the bid documents show.

The Patch in Augusta is incorporated through the Georgia Secretary of State's Office and has a federal tax identification number. Organizing attorney Benjamin McElreath said he tried to obtain a local business license, but was told by the License and Inspection Department that if the company would be operating at the municipal golf course, it would need to first show proof of a lease there.

"To reject it for the reason they did is ridiculous," Kistler said. "They're using a technical default, which I don't believe would hold up in court."

Procurement Director Geri Sams was out of the office the latter part of last week. Quality Assurance Analyst Phyllis Mills referred questions to Sams, but said the golf course bidder had opportunities to ask questions beforehand and raised nothing about the license issue. Had it done so, the problem might have been resolved, she said.

The Public Service Committee voted to reissue the request for proposals. Beck said that, under the circumstances, the next one might need to be amended to give leeway on the license requirement.

Despite innuendo to the contrary fueled by the divide over privatization, Beck said he's certain there was no effort to derail the prospect of outside management. The lack of responses, he said, has to do with the tough economic climate for public courses and the city's insistence that pay-and-play rates remain in the current $20 to $35 range.

Commissioner Joe Bowles, who has long been pushing for privatization, said the commission should forgo another bid process and grant Hendry's company's appeal.

The Patch in Augusta should get leeway if they tried to obtain a license, but were rebuffed, said Robert Mullins, the plaintiff's attorney in several suits against the Procurement Department.

"If that's the case, they shouldn't be required to have one," Mullins said. "And they shouldn't have been rejected."

Business licenses are based on gross revenue and range in price from $82 to $10,338.

A plan for 'The Patch'

Elements of a business plan for operating Augusta Municipal Golf Course submitted to the city by The Patch in Augusta, LLC:

- Redesign the clubhouse with a Scottish flavor, adding a fully-stocked pro shop

- Existing members won't be asked to raise extra money

- No more quarterly memberships -- full membership plans only

- Create a signature hole patterned after Augusta National, with flowering trees and shrubs and an air-conditioning system

- Lay practice areas with Astro Turf

- Manicure trees, fairways and greens

- Charge premium green fees during Masters Week to raise an additional $147,000. Local members wouldn't be excluded from play, but would be required to pay the going rate.

- Keep regular prices "fair and reasonable"

-- Johnny Edwards, staff writer

Who's behind The Patch in Augusta LLC?

The Patch in Augusta LLC is a venture among Scottish golf course developer Brian Hendry, Savannah, Ga.-based developer Michael J. Kistler and Scottish golf pro Ronald Macdonald.

Hendry is leading the ongoing $15 million redevelopment of Hazlehead Golf Course, a municipal course in Aberdeen, Scotland, originally designed by Alister MacKenzie, the architect of Augusta National Golf Club.

Kistler, the president of Savannah's Development Associates Inc., owned and operated three golf courses in Georgia and Florida in the 1980s and 1990s. He built and designed Crosswinds Golf Club, a public course beside Savannah International Airport, operating it from 1998 until he sold it in March. He also owns the New South building near the Savannah River levee and the Freightliner of Augusta diesel truck dealership.

-- Johnny Edwards, staff writer

Procurement department accusations

The Procurement Department has been the subject of a flurry of lawsuits over the past four years accusing it of unfairly rejecting prospective contractors. In one filed by the Association for Fair Government claiming a rigged system -- a suit later dismissed on summary judgment -- the city's answer to the complaint revealed contracts repeatedly have been awarded to companies that lacked proof of a business license.

- Virginia-based Seabury Aviation Planning won a contract for an air service consulting position in 2009, with the license requirement waived because the other bidder didn't provide one either, court documents show.

- Arizona-based Head Penn Racquet Sports won a bid to provide tennis balls that same year, and because no other bidder provided license information, the license requirement was overlooked.

- In a 2008 bid for inmate toiletries, North Carolina-based Bob Barker Co. Inc. provided no license, but because it submitted the lowest bid and other bidders were also noncompliant, it got the job anyway.

- In an affidavit on file in another lawsuit filed by a rejected bidder, Quality Assurance Analyst Phyllis Mills said vendors have never been required to obtain Augusta business licenses, that it wouldn't make sense for them to be forced to obtain one before they get a contract award.

-- Johnny Edwards, staff writer

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