By Geoffrey Croft
City taxpayers will build billionaire Donald J. Trump a Jack Nicklaus-designed golf course under a proposal being voted on today at 2:30 by the mayoral-controlled Franchise and Concession Review Committee (FCRC). Under the terms of the sweetheart deal, the city won’t see a penny for the first four years of the 20-year concession, according to the agreement obtained by NYC Park Advocates.
And considering the project’s price tag, the city is unlikely to make back its investment over the full two-decade pact.
According to an internal Parks Department document NYC Park Advocates has learned project costs have ballooned to at least $191 million dollars, easily eclipsing the $70 million price tag for California’s Crossings at Carlsbad, “the most expensive municipal golf course ever built.”
The price includes more than $ 35 million to build a replacement park and new waterfront esplenade which were suppoed to be covered by the project's orginal developter.
The person in charge of the deal for the Trump Organization is Ronald Lieberman, former head of the Parks Department revenue division.
Under the Radar
The Parks Department dumped a press release announcing the proposed deal with Trump on a Friday, the day before Christmas Eve. The financial arrangements were conspicuously absent in the announcement. The shocking terms of the proposed agreement were quietly released in the City Record last week.
Pay to Play
Green Fees. In a further bilking of taxpayers, the city would allow Trump to charge the public up to three times more than the fees at other Parks Department golf courses.
The public has been repeatedly assured by city officials that costs would be comparable. Parks Commissioner Adrian Benepe told The Wall Street Journal in 2009, "The intention is to keep [prices] in line with other city courses and not charge as premium." Apparently that intention has changed.
Trump would also be permitted to increase green fees annually.
In the shadow of a public housing complex, Trump plans to charge $100 for a round of golf (Monday-Thursday), compared to $31 at other city courses for most of the day and $125 on weekends and holidays, as compared to $49.50.
Trump will charge non-residents $25 more on weekends without the approval of Parks or the city. Regular city courses charge non-residents an additional $8.00 for p.m. 18-holes and $6.00 on twilight apply for all others.
Inflation. Trump’s prices are based on May 2010 projections, the agreement points out, but the facility isn’t slated to open until Spring 2014. Should we assume the prices will be even higher when the course opens?
Golf carts. And not to miss a trick, golf carts will be rented at a rate of $25 per rider, as opposed to $37 per cart at the city's other courses.
Private Uses. Trump would also be allowed to completely close the golf course to the public on any day for private tournaments and outings, league play, and junior or youth programs. Requests to close the facility "shall not be unreasonably withheld" by the Parks Department, according to the terms of the agreement. He would also be allowed to use up to 20 percent of starting times Monday through Friday for private tournaments and outings.
To further maximize his earning potential, during the hours and days the golf course is not ordinarily open to the public Trump shall be entitled to conduct special events in any banquet or other catering facility. Listed banquet events include weddings, civil unions, renewals of vows, bridal/baby showers, birthdays, family reunions, and afternoon teas, to name just a few.
In addition to the golf course concession, the city would also build Trump a waterfront park snack-bar concession called "Donald's Joint."
For the People?
According to the agreement, Trump can expect the city to deliver a 18-hole, 72-par Jack Nicklaus Signature Golf Course, plus a 350-yard lighted open air driving range practice facility (270 feet of it artificial turf). "The practice facility will also include a putting green with sand traps for short game practice."
A snack bar, food service facility, pro shop, and ample parking will also be built. The facility will be New York City's "first tournament-quality golf course,” according to the Parks Department.
A 7,158-yard long layout from the back tee provides two “returning nines” that meander through grass dunes “reminiscent of the links courses of Scotland and Ireland," according to the Parks Department's website. The city is installing 1 million square feet of sod, creeping bluegrass on the fairways and tees, and the "greens will be walk mowed."
This is a far cry from the original municipally-minded master plan created by Robert Moses, dating back to at least 1949. It called for approximately one-quarter of the 222-acre site to be devoted to golf with much of the rest designated as ballfields and picnic areas.
Payments to the City
Trump is required pay the city nothing through the first four years of his 20-year contract. Years 1-4: No Fee. Year 5: $300,000 or 7% of Gross Receipts plus 3% of sublicense gross receipts. By the 10th year, he is required to pay $360,000 or 7% of Gross Receipts plus 3% of sublicense gross receipts. By year 20, he is required to pay the city $470,000 or 10% of Gross Receipts plus 3% of sublicense gross receipts.
That is a far cry from the original deal. According to the original contract, Ferry Point Partners was required to give the city $1.25 million in the first year and that would increase to $3 million by the end of the 35-year contract. Overall, the city would have collected at least $63 million. Alternatively, the city could have taken 5 to 11 percent of the project’s revenues for the first eight years, and more after that, if that amount was greater than the minimum payment.
Trump's sweetheart deal doesn't end there. Not only are his minimum annual fees much smaller than those paid by the city’s other golf concessionaires -- his percentage of gross receipts will also be less, according to several licensing agreements reviewed by NYC Park Advocates.
The 18-hole golf course in Brooklyn’s Marine Park, for instance, compensates the city as follows: In each operating year, the licensee shall pay the city license fees consisting of the higher of the minimum annual fee. (Years 1-5: $325,000; Years 6-10: $475,000; Years 11-15: $575,000; Years 16-20: $675,000)
In Van Cortlandt Park in the Bronx, the golf course’s 20-year agreement calls for the city to collect, in years 1-5, the greater of $300, 000 or 17 percent of green fees and cart rentals and 10 percent of merchandise, snack bar/grill, and other revenue, plus 35 percent of resident ID card fees. In years 6-10: The greater of $400, 000 or 18 percent of greens fees and cart rentals and 10 percent of merchandise, snack bar/grill and other revenue, plus 35 percent of resident ID cards. In years 11-15: The greater of $475, 000 or 19 percent of green fees and cart rentals and 10 percent of merchandise, snack bar/grill and other revenue, plus 35 percent of resident ID cards. In years 16-20: The greater of $550,000 or 20 percent of green fees and cart rentals and 10 percent of merchandise, snack bar/grill and other revenue, plus 35 percent of resident ID cards. In addition, in the event that the licensee operates a new full-scale restaurant/banquet facility, the licensee will pay an annual percentage of gross receipts derived from the operation of the restaurant/banquet facility according to the following schedule: 5 percent of gross receipts less than $2 million; 10 percent of gross receipts between $2 million and $3.5 million; and 15 percent of gross receipts over $3.5 million.
Trump will be paying less than a hotdog vendor in Manhattan.
Sixto Guerrero, 36, has lived in the Throggs Neck Houses for 11 years. Virtually all of that time the site has been under construction. He was shocked by news of Trump’s deal.
"Just terrible, terrible," said Guerrero, 36, a restaurant cook and father of three. “It’s for rich people. A lot of people here don't have jobs. We don't have the money to play golf.”
"And what about the jobs? Are people in the communty getting jobs?"
He pointed to Ferry Point Park on the west side of the bridge. “Very bad condition – it’s dangerous,” he said over the weekend. “We have just a small park, and they’ll have all of that,” Mr. Guerrero said pointing to the construction site.
State taxpayers may also be on the hook, according to the license agreement, as the Triborough Bridge and Tunnel Authority (TBTA) and the New York State Department of Transportation are required to build at no cost to the city or to Trump "an exit ramp from the Bronx bound lanes of the Bronx-Whitestone Bridge to the entrance access to the Licensed premises." On Friday, neither agency was aware of this requirement, according to sources.
The FCRC authorized the Parks Department to utilize "a different procedure to enter into the concession with Licensee." The Trump Organization was selected through a public Request for Offers issued by the Parks Department after the city failed to attract a developer to build the clubhouse for the scandal-plagued project.
Trump Golf Links At Ferry Point Park has committed to a $10 million capital investment to design and construct a clubhouse.
Smoking is strictly prohibited on the premises.
Perks for Nicklaus
Famed golfer Jack Nicklaus is receiving $1.25 million for design services along with some other taxpayer-subsidized perks.
Expenses. "When Nicklaus visits the site he will travel by private aircraft, helicopter, and other expedient methods of transportation, and company will allocate a share of his expenses for the private aircraft travel to such site visit based upon other travel scheduled in construction with such visit, which allocated shall be invoiced by company to consultant for payment hereunder."
"Company" is Nicklaus Design LLC, and "Consultant" is Sanford Golf Design, which the city is paying. This agreement was executed on August 14, 2008.
Trump Golf Links At Ferry Point Park concession has a total of 25 website addresses.
The old Ferry Point landfill was supposed to become a golf course in 2001, but the Giuliani administration’s original developer, Pierre Gagne's Ferry Point Partners, walked away in 2006 amid rising costs (but not before collecting nearly $15 million from the city). The next year Mayor Bloomberg decided taxpayers should pick up the full tab for the golf course next to the Throggs Neck public housing project near the Whitestone Bridge.
"It's a mess,” admitted Bloomberg on November 23, 2007. “There was a contract entered into long before our administration. . . . It turns out it was a terrible contract. But that doesn't mean you go criticize the guys that did it because, for all I know, I would have done the same thing. Maybe at that time it appeared to be a great contract."
Compared to the previous administration’s "terrible contract," the mayor has shanked, committing to spend many times more than the original public allocation.
For a decade, the city allowed the previous developer to occupy part of the community's park, including a baseball outfield. The developer was supposed to rebuild a nine-acre replacement park and a 19.5-acre waterfront esplanade along the East River. Now the city will pay for both projects at a cost of at least $35 million.
(In May 2004, the firm New York Dirt, said by the FBI to be controlled by Gambino capo Gregory DePalma and his soldier Robert Vaccaro, was caught dumping 8,400 cubic yards of fill at Ferry Point. By DePalma's own crooked calculations -- caught on an FBI wiretap according to the Daily News -- this added up to as much as $42,000 per month. New York Dirt had been collecting the money at Ferry Point every month since 2001.)
Not Going Green
The city has not committed to maintaining the golf course using non-chemical, pesticide-free organic methods. Under the maintenance guidelines, they will cut the greens daily and will allow the use of fertilizer and pesticide applications.
Shaky Ground. Future Costs?
Since the golf course will be on top of a decommissioned landfill, the city is anticipating the "possibility of significant future settlement." Consequently, the Parks Department secured a Fire Department waiver to allow Trump to store fuel in two 1,000-gallon above-ground storage tanks.
Ask the Neighbors
"They are sticking it to the poor,” said William DeJesus, 52, another father of three who lives in the Throggs Neck Houses. “We can barely afford groceries."
Trump has money, he noted. “He should pay for it out his own pocket. Why are we paying for it? That's why our taxes are so high. The billionaires should pay for their own thing. We need more for the community, not this. They took our park. They never asked us what we wanted. That's why the city and state are in this financial mess - greed.
"Nothing for the poor people."
Raymond and Amy bought their house on Emerson Avenue two years ago, anticipating the golf course would be finished by now.
"We bought the house as an investment," said Raymond, a telecommunications worker who asked that their last name not be used. "The realtor mentioned it as a selling point. Prices have fallen since we bought.”
"We were happy they were doing construction. Now we have to wait two or three more years."
“We researched it, and the mayor and the Parks Department said it would be done by November 2011," added Amy, a mother and a public school teacher in the Bronx.
"The kids in our school don't have paper towels or soap, but we have money for this? It doesn't make sense. The mayor has the wrong priorities."
New York Daily News - January 9, 2012- By John Doyle, Daniel Beekman and Larry Mcshane