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.