Monday, January 12, 2015

Guest View-Diane Peters: Why You Should Sign The Tee’d Off in Oro Valley Petition (Part 3)

Here are even more reasons to sign the petition to allow a citizen vote on the The El Conquistador Country Club purchase. These reasons are found in the Agreement/ Contract for the facility.

As you will see, this contract was written for the benefit of HSL Properties and Troon, and to the detriment of the Town Of Oro Valley

Are you ready?  Here are just a few of the objectionable clauses in this contract.

Page 2 – Facility
If the Town purchases the facility, Troon will manage food and beverage service, all golf courses, part of the clubhouse, and the tennis courts at the hotel site.

Apparently, Troon will not be managing the pool or the 15 lighted tennis courts at the Community Center site. Therefore, Troon’s management of 31 tennis courts noted in the staff briefing is incorrect.

Page 3 – Operating Costs
Oro Valley will pay all operating costs for the golf course. This includes all supplies and equipment, the Troon management fee, employee costs, advertising and promotional expenses, administrative expenses, centralized services, operating licenses, fees and permits, grounds and landscaping, routine maintenance, insurance premiums, credit card and travel agent commissions.

Page 7, Sections 3.01 and 3.02 – Operational Standards / General Authority
Oro Valley is required to cooperate with Troon so that Troon will be able to operate the facility in accordance with the Operational Standards developed by Troon. Apparently, the Town is not allowed a say in the operational standards.

It will be Troon, not the Town, that implements all pricing, including green fees and rental fees. Troon has the right to provide complimentary or discounted use of the Facility, including food and beverages to existing or potential customers, employees and others. Oro Valley will be paying for other people to enjoy free or discounted rates.

Page 11, Section 4.05 – Personnel
If a Troon employee or Affiliate of Troon not employed at the Facility is temporarily assigned to the Facility, the Town will pay all costs for travel to and from the Facility.

Page 15, Section 4.10 – Operation Consistent with Resort Hotel
Resort guests will be allowed priority booking and reservations at all golf courses at rates not to exceed the rates charged to Oro Valley residents. Good luck reserving the greens for 7am on a weekend! You’ll be paying increased sales taxes for other people to play golf at their convenience and at your reduced rate. What a deal!

Of note also is the Appraisal Report which states: “According to our interviews with golf course managers, selling full memberships is a key to achieving profitability.” So non members, get in line behind resort guests and those with memberships.

Troon will operate the golf courses in part for the benefit of the Resort and in a manner which allows the Resort to retain its status as a franchised resort with Hilton Hotels and Resorts.

What? We’re paying Troon to help the Resort maintain its franchise status with Hilton Hotels?

Page 17, Sections 6.01 and 6.02 – Term of Contract / Renewal of Contract
This agreement is for approximately five years, commencing 12/18/14 and ending 6/30/19. Following this initial term it shall automatically renew for three consecutive 5-year periods.

The contract/agreement can only be terminated by the Town [the permitted transferee] with 90 days prior written notice to Troon and only if HSL Properties [the resort owner] consents to it! Read that again. HSL can block the termination of the contract by not consenting to it! With four consecutive 5-year terms (the original plus three automatic renewals) this means that the Town could be locked into this contract for the next 20 years!

Page 19, Section 7.01 – Payment Schedule
Troon is entitled to incentive management fees but there are no penalties if Troon does not perform to expectations. They will be paid a Minimum Base Fee of $144,000 per year or 2.5% of the Gross Revenues, whichever is greater.

Page 22, Section 8.07 – Reimbursement of out-of-pocket expenses
Troon’s out-of-pocket expenses shall be reimbursed by the town including travel, entertainment, telephone, electronic communication, postage, air express, recruiting (including agent’s fee), etc. This is in addition to the $144,000 management fee.

Page 26, Section 11.02 – Assignment by Owner
HSL has the right to assign the Agreement [Contract] to the Town of Oro Valley provided the transferee [the Town] agrees to assume all the obligations of the original owner [HSL] under this contract. Why should the Town be obligated to abide by a contract for which they never went out to competitively bid?

Additionally, once HSL transfers the agreement to the Town, HSL shall be released from any post-transfer liability.

Combine Sections 6.02 with 11.02 and what we have is a Town that is obligated to the terms of a 5-year and beyond contract that they didn’t negotiate and never saw, yet despite this, they can’t even terminate the contract without the consent of the Resort Owner! These are the most egregious sections of this contract.

I can see why the Majority-4 council enthusiastically voted YES. What with HSL having the final say on everything while the Town assumes all the costs, risks, and liability, Troon setting the fees and the annual budget while the Town pays all of Troon’s out-of-pocket expenses including travel and entertainment, and the Resort guests getting priority tee times at residents rates…well, Sweetheart Deals like this just don’t come along every day, now do they?

Diane Peters has lived in Oro Valley since 2003, moving here to escape the humidity of the East Coast. Combining her love of animals and writing, she wrote her first protest letter at the age of 12 to the Canadian Prime Minister in support of ending the annual baby harp seal hunt. Years later, she flew by helicopter to the ice floes off the coast of Newfoundland to photograph baby harp seals. Her other interests include reading, nature photography, traveling to National Parks, Native American history, art galleries, museums, and politics. In her past life, she worked at various University Hospitals in New England assisting in Oncology Clinical Trials and preparing manuscripts for publication in medical journals. Her husband is an Army veteran who served in Germany and South Korea. A former hippie, he attended the 1969 Woodstock Festival..


Richard Furash, MBA said...

Wow! That's really, really scary! Thanks for the synapses and articles Diane. I can't imagine anyone in their right mind would agree to this! We need to stop this monstrosity!

Richard Furash, MBA said...

Look up bad contract in the law book and you will find the stipulations noted by Ms. Peters above.

I smell a big rat, and the last name of the rat is spelled HSL!

I also smell a nice future "consulting" job for certain town officials with Troon. OV is not immune from GRAFT!

I remember when a certain past mayor got a very sweet consulting job with the local Regional Transportation Authority (RTA).

I hope the voters do not approve this plan.

Richard Furash, MBA said...

Putting HSL in the same classification as rats is doing a huge disservice to rats. We all know Lopez is slimy, but he outdoes himself here. He saw a bunch of suckers on the council and took advantage. If WE allow this to stand, then WE are the suckers!

Richard Furash, MBA said...

Has anyone heard from the majority 4 about this? I would love to hear them justify it.

Richard Furash, MBA said...

All due respect to this blog, finding information on it is very difficult. Where is Part 1 and Part 2 of this posting? Why not add links to them? Otherwise they are buried on the site. I came on the site to share the URLs with some concerned TOV people but can't do it if I can't find the information myself.

Richard Furash, MBA said...

Parts 1 and 2 are right here. Just scroll down.

Richard Furash, MBA said...

On the main page, scroll down.

Richard Furash, MBA said...

Scroll down to the bottom of the page and click where it says, "Older Posts." That will take you to the next page of posts. You can keep doing this on each page to go back multiple pages if you need to.

Richard Furash, MBA said...

You can also go to the search box in the top left corner of the page and type in...Diane Peters Part 1...and all 3 guest views will come up.