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The City of Coral Gables has decided to cut ties with Coral Gables Country Club’s current operator after serving only 10 years of its 30-year lease term.
In March, tenant Coral Grand was notified that the city would not renew its tenth-year lease agreement to operate the country club at 997 N Greenway Drive due to failure to pay both base and percentage rent, according to Coral Gables’ spokesperson Martha Pantin.
The city notified operators of Coral Grand, which has been operating the Coral Gables Country Club since August 2009, that it had failed to pay rent on time for April 2020 and had failed to pay percentage rent for October 2017 to Sept. 30, 2018, and Oct. 1, 2018, through Sept. 30, 2019, which violates the initial lease, according to a nonrenewal letter sent from the city to the country club’s operators.
In January, the city commission approved a deferred payment plan under which Coral Grand would pay rent in full for August and September 2020 and pay 50% for October, November and December, totaling $95,650.31. Operators acknowledged being in default for failure to pay rent due Aug. 1, 2020, because they were impacted significantly by the pandemic, which was another violation of the lease agreement.
According to the deferred rent agreement, payments must be on time, and in the event the tenant fails to oay on time, the city has the right to exercise any of the remedies available under the lease or at law or equity, including the immediate and voluntarily vacation of the premises.
City records also show how city staff made numerous inquiries to the operators regarding the status of insurance claims, which were either not responded to or not responded to in a timely manner, the letter continued. At this point, Coral Grand was no longer eligible for a renewal.
City staff also found unpermitted work, property damages not reported to insurance, resident complaints, failure to return deposits to non-profits and schools for events scheduled during Covid-19, and additional for-profit companies registered at the property without the city’s authorization. The lease specifically includes a percentage rent provision based on gross revenue, Ms. Pantin added.
After numerous conversations with Coral Grand, which included its submittal of a March proposal, the tenant engaged legal counsel. In June, the city and the tenant’s attorneys reached a settlement agreement to amicably conclude an extended operator period effective through April 2022.
“We could not close on Sept. 30 because we would leave thousands of people who have booked events with us abandoned and potentially losing all their deposits,” said Anthony Di Donato of Coral Grand “So, we agreed with the city staff that they would allow us to stay until April of 2022 and would agree to terminate the lease and not sue them for early termination.”
“We felt it was the right thing to do, not from a legal perspective but from a moral perspective and making sure we, as an organization, fulfill our obligations to our community,” he said.
City staff said they had a bad deal because they wanted a contribution of $4 million in infrastructure, which is something Coral Grand was not considering doing, according to Mr. Di Donato.
On April 19, the city’s Procurement Division requested proposals for the tenancy and operation of the country club through which any interested proposer would make an initial improvement investment of no less than $4.5 million, agree to a base rent of $360,000 per year, escalating at 3% for each leasing year thereafter, and propose percentage rent participation based on gross revenues.
The city would consider an initial 15-year lease, with two additional five-year options to renew. Proposals were initially accepted through May 24 and were extended on three separate occasions, closing June 28.
The city received one response. That proposer, Barreto Hospitality, was found to be non-responsive, and the request for proposals was canceled. Coral Grand did not participate since it cannot be selected as it had failed to perform under terms of a previous contract with the city.
It is important to note that a final decision regarding the Coral Cables Country Club has not been made and the city manager is considering all options, Ms. Pantin added.
“I’m hoping that the city will now review this and say ‘well, we didn’t get a better offer. We didn’t get a better proponent the community really likes. Let’s renew their lease.’ That’s what I’m hoping for because it’s the right thing to do,” Mr. Di Donato said. “We’ve given him [City Manager Peter J. Iglesias] the opportunity to go out and find a better operator who will pay more, and he was not able to do that. I think he should give us the courtesy to at least speak to him and ask, ‘how can we resolve this and stay on, because that’s what the community wants.’”
https://www.miamitodaynews.com/2021/09/28/coral-gables-country-club-operator-leaving-but-wants-to-stay/
