How does a city buy a shuttered golf course, turn around and sell it for $1.5 million less than they paid for it and still walk away smiling? Welcome to Groveland, Florida.
This story goes all the way back to the good economic times of the early 2000s and involves a series of bad decisions.
Groveland City Manager Mike Hein has taken questions about such large real estate losses and was willing to talk about them. “It was evident that there needed to be some explaining,” he told Florida Daily.
In the early 2000s, Groveland wanted to grow quickly. The sleepy town on State Road 50 west of Clermont and east of I-75 needed more water to grow so it cut a deal with the St. Johns River Water Management District (SJRWMD) to secure what Hein called “assured water supply.” The city agreed to build a two-mile water pipe from a lake to where the water could quickly recharge the Florida aquifer. Asked if this was a bad deal, Hein refused to judge the actions of past managers but all of them were fired. The pipe was supposed to be built by the end of January.
Faced with virtually no good options, the city found a solution. It could buy the old Palisades Golf Course, closed since 2014, and cap that area’s well, no longer using the water and satisfying the SJRWMD at a cost of $2.3 million.
Why not just go back to the SJRWMD and ask if Groveland could use less water, Florida Daily asked Hein.
“I think there is great value to the city to have the consumptive use permit in the amount of water it allotted so that there is a security of the future growth of the city,” Hein said, noting Groveland still wants to grow. “To what degree is another discussion”.
So in 2019, Groveland was the proud owner of Palisades, a closed golf course that was not even inside city limits.
The next move was to do something with the golf course. The city considered running a golf course and pool but would lose a great deal of money if it did. Hein described that option as “not what government does well.” The city also considered using the lands as a frisbee golf or open space but, again, would have lost money on it. Eventually, the city settled on selling it back to the homeowners for $500,000, losing $1.8 million.
Despite the loss, Hein said it was necessary “to hopefully either redevelop or maintain for beneficial regional use.”
“Whether it is a golf course, open space, or anything else that could attract local or outside economic activity, that is good for Groveland,” he said.
The homeowners are thrilled with the decision, Palisades HOA President Jim Krakowski
told the City Council. “After many years we now see the light at the end of the tunnel and it doesn’t seem to be another train,” he said.
Instead of building a $4.3 million dollar pipe the city simply could not afford, it instead lost $1.5 million on a real estate deal and is thrilled about it, noting it is saving the city $2.5 million with the loss.
Now Groveland wants to get back to growing.
“I can’t conceive of communities that will be facing that much change that quickly as Groveland,” Hein told Florida Daily.
Hein said he expects a different kind of change than that which was planned early in the century. Instead of hoping to become a suburb where rooftops bring commercial enterprises, the city nabbed a major warehouse distribution center for Kroger and will continue to look for job creators instead of subdivision creators.
Reach Mike Synan at firstname.lastname@example.org.