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2024 05 07 CC Minutes Special • MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL OF THE CITY OF BAYTOWN May 07, 2024 The City Council of the City of Baytown, Texas, met in a Special Meeting on Tuesday, May 07, 2024, at 7:30 P.M. in the Council Chamber of the Baytown City Hall at 2401 Market Street, Baytown, Texas, with the following in attendance: Laura Alvarado Mayor Pro Tem Sarah Graham Council Member Kenrick Griffith Council Member James Franco Council Member Jacob Powell Council Member Mike Lester Council Member Brandon Capetillo Mayor Jason Reynolds City Manager Scott Lemond City Attorney Angela Jackson City Clerk John Stringer Sergeant at Arms • Mayor Brandon Capetillo convened the May 07, 2024, City Council Special Meeting with a quorum present at 7:30 P.M. All members were present. Council Member Kenneth Griffith made a motion to adjourn the City Council Special Meeting due to improper posting. City Attorney Scott Lemond acknowledged there was a conflict with the City of Baytown City Council Rules and Procedures Section 6.1 a and Chapter 551 of the Government Code to which Mr. Lemond advised the special meeting can proceed with a majority vote of City Council. A motion was made by Council Member Kenrick Griffith to adjourn the May 7, 2024 Special Council Meeting,but the motion failed due to a lack of a second. The vote was as follows: Ayes: Council Member Kenrick Griffith Nays: None Approved A motion was made by Council Member Laura Alvarado and seconded by Council Member Mike Lester to suspend Rule 2.13 of the City Councils Rules and Procedure which is a temporary sus- • pension for this meeting only. The vote as follows: City Council Special Meeting Minutes May 07,2024 Page 2 of 14 • Ayes: Mayor Brandon Capetillo, Mayor Pro Tern Laura Alvarado, Council Member Sarah Graham, Council Member Jacob Powell, Council Member Mike Lester Nays: Council Member Kenrick Griffith, Council Member James Franco Approved 1. CITIZEN COMMENTS Mayor Brandon Capetillo announced citizen signed up to speak. a. Byron Schirmbeck,4727 Blackstone Street, expressed his concerns related to the Councils Rules and Procedures and Agenda Items 4.a. and 4.b. b. Mike Beard, 207 Morrell Street, expressed his appreciation to City Clerk Angela Jackson and her staff for their professionalism and knowledge after signing paperwork to be a member of the Planning and Zoning Commission along with the Baytown Police Department for their quick response to an incident that occured at his home. c. Holly Carny, 221 Mayhaw Drive, advised Council of an incident that occurred at the Sterling Library involving a homeless person. • d. James Kaminsky, 623 Lauren Lane, expressed concerns related to the citizens being an- nexed in 2017. 2. PRESENTATION a. Receive a presentation from Troon Golf, LLC regarding the Golf Course and poten- tial next steps. City Manager Jason Reynolds commented, "Mayor and Council, I'm going to go over what's been going on with the golf course. Before I do that, I want to talk about some of the items that are on the agenda, and frankly,just a lot of the questions that I've been getting. So, first is how are we able to consider 4A and 4B, without suspending the rules. The answer is, 4A is not the same item that was voted on. It's not the same budget amendment. As Mr. Schirmbeck mentioned,there aren't any numbers because a lot of things have to be discussed still. So, it's not the same agenda item that was voted down on May 3rd.The golf course piece I believe is 4B was not voted on.Therefore, the rules do not have to be suspended for that. Therefore, there is nothing wrong with the items that are before the Council today. In addition, I have been asked by two people in this room at least 50 times if I'm going to investi- gate.If I expand that to all the questions that I've got about investigating what's going on and doing deeper dives into what it may be, well over 150 times that I've been asked to investigate, and the • answer stands the same. We, as a city, are exploring all legal options. I have even been addressed by Council Members expressing concerns that have been on social media about the investigations. The Council Member was explaining what social media is implying is that there were bad actors on the Council at the time that this contract was adopted and we should investigate if the Council City Council Special Meeting Minutes May 07,2024 Page 3 of 14 • or any specific council member is taking kickbacks from this project or should we have the FBI or the Rangers look specifically if that's happening. I have made it very clear to all of the City Coun- cil, there are no indications of any kickbacks going to any City Council member or any city em- ployee. It does not mean that I'm turning a blind eye to it. It does not mean that it's being swept under the rug. The thing with investigations is we don't go around telling every single person, "Hey, I'm investigating you, I'm investigating you, I'm investigating you and I'm investigating you."What that does is it gives them the foresight to start looking to cover their tracks. People will not know about investigations until they are almost done. If they are going to be done, or when they're going to the courtroom to respond to the accusations in front of them. So, I appreciate that there's a caring community trying to make sure that the right thing is being done. From my point of view,the right things are being done. If anything were to come out, I promise you it will be put out there. I'm coming before you today to put it all out there right now. I'm about to read through my script to talk about everything that we've been through for the past 2 to 3 months with this development. I do want you all to know that Troon is here. Troon is online. They have been a fantastic partner. They have helped Assistant City Manager Brant Gary through this process.They have been a right hand to the staff, trying to provide information when necessary to keeping the course in a fantastic condition,responding to washouts,and trying to provide guidance to the staff on what happens with the maintenance of the course whenever things are going on. They've just been helpful and I do commend them for the work that they've done. So,the project kicked off as any other development project does. There was forward progress and there were hiccups,which believe me,is very,very normal with any development process.Overall, • things went up and down, things progressed, things backtracked, and the course opened in late 2023, but the clubhouse did not. That's no secret, okay? It's important for everyone to know that the city hired a third-party vendor to oversee all page rolls to ensure those match with what was on the schedule of the 380 Agreement and the lease. What's up on the screen in front of you is every dollar that's been paid out to Build Baytown 1 to date, that was approved by the third-party vendor to see that anything that has gone off of that, or that has come out of that six million was in line with the schedule on the 380 Agreement and the lease,and that the appropriate level amount of work that was being done at that time aligned with the invoices that were being submitted to the city.Right now,you'll also see that the city has a retainage of$119,500.That was roughly$240,000 a few months ago. I regret the action of approving that additional $120,000 that was paid out of retainage to Build Baytown 1. The reason that we did release that retainage is because we had started to get calls from vendors not being paid, and we needed to ensure that our local vendors were being paid, but hindsight is 2020, I acted on the best information that was in front of me at the time. So, again, the clubhouse has not been completed. You can see the 6 million has been distributed, but what we do have are approved plans for the clubhouse. From our point of view, the golf course had opened at that point. We had construction plans approved by the permitting department and things appeared to be moving forward. At the same time,this was a red flag. This was one of the many red flags that we had throughout this process.Then,additional red flags began to pop up, which led to very in-depth conversations with Build Baytown 1, but the City Council persisted that this needed to be handled immediately. Pay the vendors,finish the golf course,finish the clubhouse. We're tired of the excuses, get it done now. • In March, the City was notified that the initial notice of default had been sent by Troon to T-36 Golf. If that default took effect 10 days later, it meant the City would not have an active operator on the course. During this end-day period, staff met with Build Baytown 1 to discuss a possible settlement and a path forward. Once it was clear that there was not an action plan to continue City Council Special Meeting Minutes May 07,2024 Page 4 of 14 • operations on the course in the case of a default,we started to explore all options. Once that default was active, the City initiated emergency actions to protect our assets and our investment, which was allowed by the 380 Agreement and we repossessed the course. Simultaneously,the City struc- tured an agreement with Troon for a short-term action plan set to expire at the end of the 30-day cure period Build Baytown 1 was allowed by contract. Later on, we called this phase 1 of a 3- prong approach. Staff was given left and right boundaries to explore options with Build Baytown 1 and bring back options for further discussion or action by the City Council. A path forward with Build Baytown 1 seemed unlikely after exploratory efforts surfaced and additional liabilities and other irregularities became clear. Staff was given further direction to pursue a 60 to 90-day agree- ment,which is now called Phase II with Troon to further protect the city's investment and its assets. The intent was to be prepared for Phase III, which was for a management company like Troon to run permanent options at the course. On May 2nd, a notice of termination letter due to the expira- tion of the 30-day cure period was sent to Build Baytown 1. On May 3rd, the default of the 380 agreement with Build Baytown 1 was meant to be in effect at midnight, which would have termi- nated the agreement.However,Build Baytown 1 filed for bankruptcy protection on May 2nd.This put the City in a legal back and forth for the period of the entire bankruptcy proceedings. So,where are we now? We are currently working on the bankruptcy with our legal advisors, and we are pursuing the$6 million investment.We are also exploring all legal options that we have before us. The good thing is, and our lawyer did ask me to say this tonight, that bankruptcy opens the door for the court to have all records opened up, as well as track the money movement. To Build Bay- town 1's credit,they have stated that all sources and uses will align with the pay invoices submitted to the City. It is good to note that these documents and,by a federal court and outside investigator, 110 will be able to verify that for us. Over the past two months, the general direction I have been working under is to pursue the possibilities of Phase II and Phase III. This means that neither your staff nor Troon was prepared for closing the course down.Therefore,staff needs direction on what to do with the golf course and/or land. Do we want to revert it back to what it was before? Do we want to maintain the value of the land as it currently is until we know the next steps? Do we want Troon to keep the course operational as a course through the end of the year or the end of the fiscal year and explore selling the golf course to a private party or maintain operations at the course? It's important to note that all options require funding. Even shutting it down requires funding. So, when it comes to the budget amendment that's on 4A, there's a reason it's blank because we're in limbo and we don't know what option to choose at this point. So,again, I just want to reiterate that Troon has been a good partner with the City over the past few months. They are online. If the Council has further questions, I'm here and Troon is here."(Exhibit A) Council Member Graham commented,"Thank you so much to the staff and thank you to the legal team for being able to have the ability to make a lot of this more transparent for the community. Some of us have been looking at this,not all of it,but we've been able to see this a little bit longer than everyone else. I appreciate that. The most important thing that you said tonight for me is that now that the bankruptcy is active, all the things that our citizens are asking for, they are going to eventually become not only visible for us to see what's going on but also a transparency piece for our community. And I just really appreciate the patience and all the hard work of the staff. Also, I hope as a Council, I just wanted to comment that when we move forward, I used the word cohesive last week,that we're a little bit more cohesive when we give staff direction because,in my opinion, • it is very embarrassing when we come to a consensus and we give our staff as a city direction and then that is flip-flopped when we get out in the public. And so, I'm hoping as we move forward, that we do a better job helping you all manage your movement forward." City Council Special Meeting Minutes May 07,2024 Page 5 of 14 • Chief Development Officer Scott Van Newkirk of Troon presented a presentation highlighting the growth on golf course activity through the U.S. along with David Nicholls who provided data regarding golf course abandonment. (Exhibit B) 3. EXECUTIVE SESSION a. Recess into and conduct an executive session pursuant to Texas Government Code Sections 551.071, 551.072 and 551.087 to seek the advice of the City's attorneys regarding pending or contemplated litigation; deliberate the purchase,exchange,lease,or value of real property; and/or to deliberate regarding economic development negotiations. At 8:20 P.M., Mayor Brandon Capetillo recessed and convened in to an Executive Session pursu- ant to: 1). Recess into and conduct an executive session pursuant to Texas Government Code Sec- tions 551.071, 551.072 and 551.087 to seek the advice of the City's attorneys regard- ing pending or contemplated litigation;deliberate the purchase,exchange,lease,or value of real property; and/or deliberate regarding economic development negotiations. At 9:40 P.M., Mayor Brandon Capetillo reconvened the meeting and announced that, in accord- ance with Section 551.102 of the Texas Government Code, no action was taken in the Executive Session. • 4. PROPOSED ORDINANCES a. Consider an ordinance authorizing an amendment to the Fiscal Year 2024 budget authorizing a transfer from the General Fund to establish a new fund specifically designated for the Golf Course. a. Celia Cravey,4612 Country Club View, commented,"I implore the council to vote against 4A and 4B,and any additional tax dollars being authorized for expenditure on the boondoggle golf course. I find it ironic and sad that the city refused to purchase the Country Club Golf Course when it was available. And very soon, after they realized they no longer had a suitable golf course due to the condition of Evergreen, and now we are in this situation. When funding a new golf course was on the ballot, Baytown citizens voted against their tax dollars being spent on one. Somehow, our elected officials decided to circumvent the will of their voters and entered into the T-36 Agree- ment. This whole scenario was nothing but poor planning and apparently hubris on the part of the City Council, who did not do their due diligence in making these decisions. The taxpayers of Bay- town do not want to foot the bill for this.Vote against any further funding for T-36. Be responsible custodians of our tax dollars and don't throw good money after bad. Do not rush into a bad deal. Take the time to evaluate options and get it right. Give your constituents a voice on any future expenditures for that location. I appreciate that our City Manager provided his explanation of events in Troon's presentation. However, it is still my opinion that Baytown voters should have a voice on the future of that location and any more expenditures for it. The Council must be trans- • parent about any future agreements and potential costs. I am not convinced that golf will be prof- itable in Baytown. Perhaps Baytown should just sell the property to a private entity and pursue legal action against Build Baytown 1. Troon's presentation on the popularity of golf may not be City Council Special Meeting Minutes May 07,2024 Page 6 of 14 110 representative of our city's interests. I felt the presenter's comments on the deterioration of the golf course were just a pressure salesman scare tactic." b. Byron Schirmbeck, 4727 Blackstone Street, commented, "I think it's important to under- stand what we're actually voting on tonight and what we're not voting on. First of all, we're not voting on whether or not we like golf or not. There are plenty of people that love golf and want it in Baytown, and they're telling you to vote no on both of these items tonight. It isn't a vote to decide to either save an asset or throw that asset away. To be clear, if you vote no,the lowest cost option on there is to cease operations and explore future options. That's not a dead end. The golf course isn't going to sink into the bay. If you notice from the presentation, their worst-case sce- nario, which they tried to use to get a contract from you guys said that it assumes no maintenance, and that's not the case. If you guys do that, you will maintain it. The windows aren't going to be boarded up. If you vote yes on anything tonight, let's just be clear, you are voting for a bailout of the bad developer. And why is that? I hope somebody in the comments can tell us, but if I were Troon and it seems like Build Baytown 1 owes a lot of money to a lot of folks, I would assume Troon is one of them. If that's the case and Troon knows that you guys are in a tight spot, they would probably negotiate that you bail them out of what Build Baytown 1 owes them. If that's the case,you're essentially paying off their bad debt.They won't be able to collect that in court because you paid it. They won't have an action to go after Build Baytown 1 to collect that. You'll also be buying out his contract with Troon,essentially,even if it's short-term.Keep in mind that we already gave$6 million to this project, and some of that was supposed to go to the maintenance and oper- ations of the course. So, any money that you spend to bail this out again is money that we've • already paid, that we don't know if we're going to get it back. We have time to do this right. We have time to do a proper request for proposal,not just a 2-week ad in the Baytown Sun.We haven't even completed an assessment of what went wrong on the last deal, and here we are trying to rush into another deal that we're told is a do-or-die situation. There is no do-or-die situation. There really isn't. Doing another rush bad deal is only going to cause more resentment from the exact people you need to buy in to support this project. If you don't have the community support, you're not going to be successful. If you vote no on both items today,that actually puts total control back in the hands of this council. Your hands, and you can decide how to move forward not the mayor, not Troon, but you. You have a blank canvas. It's a beautiful property. You can do whatever you want to with it. You can turn it back into this golf course. You can turn it into any kind of park you can imagine. You could actually get the experts to tell you how to make a golf course that would actually work out there. We never put any kind of proposals out in any kind of golf digest magazines or anything like that when we did this first round. Let's go ahead and do it right. You can actually develop a golf course that's not a double loop. A lot of folks oppose this type of double-loop golf course. They wanted either a conventional 18-hole or at least a conventional 9 or 12, but we're locked into that. If you vote yes tonight, essentially what we're locked into is the situation that we're in with Troon and a double-loop golf course. If you vote no, you can still put up and pass a new agenda item, a clean one, that funds exactly what you want to do in the next project. There would be a lot of support for that. You can pass a new item to budget money to finish out the clubhouse so it's ready to rent. You can do it the right way. You don't have to give a blank check to the City Manager to execute a contract without your approval. Why do you paint yourselves in a corner and delegate all of your authority? We elected you to be our representatives • and gave you our sacred trust and our sacred lawmaking ability. That doesn't do anything to help solve this problem. It just puts a band-aid on a bullet wound. Stop the bleeding first, assess what went wrong,and who is responsible first. Have town halls for the people to discuss what they want done with their property first. Don't box yourself into a corner with this company and this deal as City Council Special Meeting Minutes May 07,2024 Page 7 of 14 • if it's your only option because it isn't. That's what they told us about the last deal, that that was our only option. Evidently,it's not because we're here tonight.Vote no on both items and take back control. It's up to you. Thank you." c. Calvin Mundinger, 4114 Burnett Drive, commented, "A quick side note, and me trying to watch these council meetings on TV. I've been watching a lot of the content on our TV group here. The content, kudos to you guys, the content is really good, Parks and Wildlife stuff, really good, recommended, they're doing a great job,just wanted to throw that in. Now, okay. So, a little bit more on me about golf. I joined the golf team in high school, I was a golf letterman. In my junior year, I played a bazillion holes golf. I know golf well. I've seen golf courses all over the country. The reason I took up golf, to begin with, I broke my left leg playing football. I broke this arm playing football. I broke this arm playing baseball. I blew out this rotator cuff as a pitcher. Now, my ankles, because of being a tall guy, in basketball, I played in the paint, and if you play in the paint in basketball, you're going to roll some ankles and your ankles are going to get torn up. So, out of physical attrition, golf was the only thing left I could play without breaking something. So, there I was. In those high school days of golf,two of my golfing buddies among many, were Tom and Tim Hazelwood, and ultimately, historically and futuristically, it was the Hazelwoods who built this golf course. I've kind of got a connection to this golf course emotionally through the Hazelwoods. Also, Kim Kosteck is here, and one of my high school golfing buddies was Kim's uncle, Buzzy McGuirk. Buzzy and the McGuirk's come from a long line of good golfers. So, they're all that is. Now, let's get to the issue at hand. It's well documented that I was in strong opposition to our first bite at this apple when we ultimately awarded this to Rio. I thought that deal • was rushed,but what I was most upset about was I felt like we, in effect, through these long-term lease payments, gave them all of the land. We, in effect, gave them the clubhouse. We gave them the parking lot. We gave them the driving range at these long-term lease options. Plus, we paid them six million bucks. That was upsetting to me for a long time. Now, here we come again with this second bite at the apple and I've got to tell you, I haven't liked the process. I think you all are out going into executive sessions too much and for too long,and I think you all need to think about having more debate here as opposed to in there, and I'd ask you all to take a look at that. Here's what happened to me, and it hit me after the Friday when the default became official and it may have been yesterday that this happened, I'm not sure when I had this epiphany,but it hit me.That's our golf course. We own that golf course. We own that clubhouse. We own that driving range. We own the land. We own the golf carts. We own that. That's ours now again. What we gave away, we now have back. I would rather us be in this position of control and Rio the hell out of here. I trust you all more and this city more and this is a city asset now. It's a wonderful city out there. I went out there today. I went out there today and looked around, and I'd been out there earlier and, in the wintertime, it didn't look so good. I went out there today and I was shocked at how good it looked. The greens, the fairways, I went in the clubhouse,there are obviously some challenges in the kitchen, bar area, but, council, I'm trying to tell you, this is a really quality asset that the city owns and you've got to protect it.You have to protect it. It's a great asset and I'm really tickled that we own it. Now, last week sometime, I had a conversation with Ms. Graham, and she brought up in that conversation something about, "Hey,maybe we do some kind of short-term temporary deal. We think about that." I thought, well, that's a good idea. She mentioned, to the end of the fiscal year, which is September 30th, which also makes me feel better about the City Manager. I was • concerned as others have been about the City Manager having the authority as opposed to the City Council,but if we do a temporary agreement that ends September 30th,then after that,we're going to have to do a new agreement, which the council will be approving. So, I like that and I support that. I'm okay with that. It's my understanding that Mayor Capetillo from what I'm hearing might City Council Special Meeting Minutes May 07,2024 Page 8 of 14 • be supportive of this temporary arrangement that goes through September 30th. That expires and then that's good. I've always railed about due diligence, and this proposed short-term agreement gives you all plenty of time for due diligence. You've got a great set of assets protected. It's won- derful. And we got time to think about what we're going to do going forward. So, thank you." d. Kim Kosteck, 5103 Ashwood Drive, commented, "I'm really glad that you mentioned that, Mr. Mundinger,because if anybody knows the history of my family with golf and Baytown, they were some of the first investors of the Goose Creek Country Club. So, golf does run incredibly deep within my roots, and I grew up on a golf course. So, I love golf. I really do. I kind of suck at it. I'm really good at pop golf, but nonetheless, it is a wonderful pastime but there are just a few things that I'd like to address. First of all, it is incredibly frustrating that it appears that rules are not really... I don't know, I guess, meant to be broken, which is not the way it should be in this setting.You're supposed to be representing integrity and that's just really hard to say when it says, we'll just kind of change the rules. I was really disappointed with Troon's presentation. I actually expected a lot more meat with that. I do appreciate Mr. Reynolds that you weren't sure, but that was the agenda item and that was one thing that I came to see and I was hoping to see actually some numbers from them, a little bit different than the numbers that they showed me. One of the numbers though was that the downtick in private,which I found incredibly interesting in the uptick in municipal. It actually reminds me of Councilman Lester's comments when this was first voted when it was mentioned multiple times the$500,000 debt that would be incurred by Build Baytown 1. That number kept coming on and on like the municipal golf courses lose money, lose money, lose money, $500,000,and if they lose$500,000,it's their$500,000 that they're going to be losing, • not our$500,000. So,essentially,this puts us in another situation now,whereas I don't believe that if we did a short-term agreement, I kind of disagree a little bit, then I think that if we didn't do a short-term agreement, that it would still give us some time to put out an RFP, to get some more information, see who's interested, which we might find that there's nobody interested because, again,the private sector when it comes to golf courses is going down because of the money.When you look at The Goose Creek Country Club, it was very sad. I remember conversations with my grandfather before it closed, and how he talked about how much money he had invested and other people were investing,throwing money in there.Then,even after it didn't survive,Evergreen didn't survive either and to say that we are dependent on a golf course to be able to build up this area, we've already shown that that's not necessarily the case. I'd really like you all to think about that, that if you cease operations,we already know their pictures are quite lovely of what a golf course looks like, but we already know what an abandoned golf course looks like here in town because we've had two. So, it's very disappointing and I really think that if we cease operations and we explore future options, that would be the most cost-effective for us before we end up making an- other bad decision, and then we're here back in September and we're making some more, who knows pressured decisions and pumping the brakes is not going to hurt us.So,there are the options, obviously, of selling or partialing. There are so many options, and who knows? Listening to more of the community, of what they think what those options should be, but I strongly urge you to pump the brakes on this. Stop making more bad decisions when it comes to these types of adven- tures. Look, I am a dreamer. I believe in looking at what the options and what we could do, abso- lutely. I want to bring business to the south side, all areas of Baytown. Everybody here wants to do that. We want to see our community grow, but just to throw money out there again, what is • Troon, or what is it that they want? That transparency hasn't been given to us: how much their contract is,how much money that they've owed. This is the lease agreement and the contract. I've had it for a while. I've gone through it. I've looked at it. I'm aware and I'm sure some of you all actually probably haven't gone through or even revisited these things. That is their debt. Build City Council Special Meeting Minutes May 07,2024 Page 9 of 14 • Baytown 1's debt, and of course, Troon is going to fight for their money, but it's also incredibly disappointing that they weren't here tonight. If we just evicted or closed the doors,and now they're moving out recently, and they want this money, and they want us to keep a golf course open,they could have been a little bit more present than a Zoom call. That was moderately insulting. We are owed more. Our community is owed more and I urge you to please pump the brakes. Thank you." e. Jeff Walters, 2303 James Bowie Drive, commented, "To me, this isn't really about golf; this is about business. The City of Baytown doesn't really have a very good record in doing real estate. Everything they touch has been bad. Troon is a developer. They're here to make money. They're going to tell you whatever you need to hear so that they can get the contract to continue what they do. They're here to sell themselves, put the hope in the people so that they would go with the Council agreeing to continue with this. My thought is: stop it. Shut the place down. Put it on the market. It's beautiful right now. It'll draw top dollar right now and get out of the real estate business. The Heights is a disaster. The Brunson's a disaster. We can't even do Main Street. I don't understand what's so difficult trying to do special deals.You all are about infrastructure and public safety. These people got their stuff down.You all need to get yours down too. I highly recommend everyone vote no. I know people are trying to save face, but the city contracts are not working. The City of Baytown constantly bleeds money. The lawsuits. Why keep paying? There's much more than$6 million that has been spent on this. The City has wasted so much money with all the different things they do trying to figure out what to do. We need to build Baytown, rebuild our infrastructure, and upgrade our public safety. Quit blowing money on dead-end dreams, I guess. This was an awful idea from the beginning. It was forced, in my opinion, and it ended up exactly • the way I thought it would,but it could get a lot worse if we keep funding it. So, I recommend vote no." City Manager Reynolds commented,"Yes,Mayor. I just kind of want to open up the conversation because 4A is a budget amendment. No matter which option that council goes with, and based on Friday,right now,we're working under the assumption of 500,but as I said earlier,everything that has been worked up,up to this point,was continuing the short-term agreement and operating until the next steps were determined. So, we didn't have an idea of what we were going to do if the course closed. And from that point of view, I'm opening that conversation back up because I need to understand what some of the next steps are for the council,which we'd like to do. Do you want to go to the short-term agreement? Do you want to continue seizing operations? But before that, I did want to go back two slides and look at the money being spent on the golf course. And if you look at this, and then, Kim, if you open up the Economic Development Agreement that you have in your packet right there and you go to the schedule at the very back, those should align with what's in the schedule. And so, when you ask yourself, what did the city pay for with this $6 million, you paid for a golf course, you got a golf course. You've got an operational golf course. You did not get a clubhouse. I agree to that. You did not get a clubhouse and that is missing from this. I stand by that. There're no qualms about that. You're missing the clubhouse. You did get the golf course that you paid for or that you wanted to be there. It is operational. Troon has shown that it is operational, that it is on the trajectory that fits with the original models show it to be. So, I'm showing that I wasn't planning to talk about that. I'm talking about that right now,just based on some of the comments that have been said because it's misleading to say that you didn't get what . you were paying for because you did. That's what the agreement was there for. Businesses fail, okay? Businesses fail a lot. And unfortunately, this one did and it fell into default. The City is fortunate to be able to act quickly to preserve the asset and the investment that the city has put into what was originally agreed upon with this 380 Agreement. So,it's there. Do I have questions about City Council Special Meeting Minutes May 07,2024 Page 10 of 14 11111 this?Yes, I do. I have a lot of questions about it and it's being looked into. I promise you that. But it doesn't mean that you didn't get what the Council wanted or agreed to have built out there. It doesn't mean that. The staff is working to look at all of this. Again, we are exploring all legal options,but with that said, it goes back to,we have to do a budget amendment regardless of where we're at right now when we leave tonight,we have to do a budget amendment because funds have to be appropriated for the next steps of the golf course. And with that, it's kind of opened up the discussion. The lawyer is whispering in my ear, we got most of what we paid for minus the club- house. So,with that mayor, I'm just opening up the conversation with the council to go through all the options. Troon's presentation that included the minimal piece is somewhat included in Option 3. We didn't have anything there,but I don't have a true cost with that at this point." Mr. Reynolds detailed out the three options that Council could consider. Council Member Powell commented, "My comments are just going to be that, for me, nothing's changed since Friday. I was in favor of Scenario 3. I have been for a month or so. However long we've been discussing this. And so, no new information or nothing's changed since Friday. And so, I'm still in that same camp. Of these scenarios,that's what I believe we need to do. I agree with a couple of the folks that just commented. For them, it's not about golf, and for me, it's not a decision about golf either. It's just what's a good deal for Baytown? What's the right thing to do? And I'm also thinking of just managing risk. I think that Scenario 2, yeah, we can say we spent $1.9. That gets us to the end of the fiscal year,but the big if there is we're going to go out,have an RFP, and we're just assuming that we're going to have responses to that RFP. If we don't, we've • spent $1.9 million between now and September and we're right back where we are now. So, that is a really big risk that I'm not willing to take." Council Member Lester, commented, "I'll go in there. Several things. I like it when I get quoted from a year or so ago, but our 380 Agreement contract worked. The 380 Agreement contract was that if the Build Baytown 1 and T-36 failed, and we were all hoping that it wouldn't, if it failed, then the golf course would revert back to the City and it did.So,the contract worked.It's unfortunate that there are some financial issues that occurred. My colleague, as far as Option 3 we're looking at potentially$500,000,but it's just brought out by the City Manager.We still need to go in. If we just said, okay, we're going to close it down and we're going to go back to make it this golf course, and we're going to have the clubhouse to be able to rent out.We're still going to have to spend$300,000 or$400,000 to get it to where we can utilize it in the future. So, now that$500,000 is now close to a million. We can't just sell the property. It's park property. We'd have to get a vote. There's also the issue of, as a City, and I've heard this from a couple of others, as a City, as a City Council, we keep flip-flopping on where we want to provide a commitment. My district is in the southern part of the city. My colleague's district is in the southern part of the city, and I cannot tell you, on a regular basis,how many people I get calls from,it's kind of like,when is something going to happen on the southern side of the city? Everything goes to the northern side, and it's kind of like,okay, so this is,to me, a level of commitment. It's not about golf. I don't play golf. I've been,but I don't play golf.That's correct. Anybody who's seen me knows that that's correct. So,it's about a commitment. Are we going to commit to stay the course and try to do something on the south side of town or are we just going to abandon the south side of town? I think that's just the wrong attitude.Yes,we have a $6 million investment. So, if any of you out there, if you invested in something, would you just get a financial, you're just going to walk away from an investment? No, you're going to put a little bit more money into it and make it go. I see one of my constituents back there said, yes, and he's in real estate. And to me, it's almost as simple as, okay, we need to keep the course operational. We City Council Special Meeting Minutes May 07,2024 Page 11 of 14 1110 need to get the clubhouse functional. Then,again,go out and do an RFP to try to get somebody else to pick up a similar 380 agreement for 30 or so years to own and operate the course. We're going to own it. We're going to own the property and the buildings but it's easier to do that when it's functional and move-in ready versus abandoned and not move-in ready. That's going to take a lot of money to get back into speed and so forth and so on. So,to me,it's managing risk as was referred to earlier, Scenario 2 is a much better risk management than saying, okay,well,let's just walk away, do minimal maintenance, and maybe in 3 to 6 months, we get somebody to come in and take over an overgrown, dilapidated, abandoned course. I just can't see that. I've gotten a lot of calls, as we all have, and about half of them want to vote no on this issue, and about half of them, which a majority of the half that want me to vote yes on the issue, are actually my constituents. And they are adamant that they don't want to see the city walk away from the south side of town. Some of them are pro-golf, and some of them are not pro-golf, but that's where we are. So, I think the more prudent thing to do would be to do the short-term agreement, keep it operational, get the building back to speed, and if we don't get anybody to go for the RFP, then in September, we can vote to move it on and revert it back to a disc golf course and start renting out the clubhouse. But either way - and I hadn't caught that until the City Manager brought it up - we're going to have to spend $300,000 to$500,000 to get the clubhouse back up where it can be utilized. So,again,the$250,000 to $500,000 is really $250,000 to a million. So, now we're just a few hundred thousand dollars difference and I hear it. I can already hear it. Well,that's still a$900,000 difference. Well,we spend a lot more than that maintaining other amenities in town on an annual basis. So, that's where I am with that." • Council Member Graham, commented, "I apologize for my demeanor. There is an emergency at my house right now. I have something that I prepared to say, but I'm going to be honest. I'm very shaken right now. I'm going to read my comments so we can vote because I am an elected official, but I will tell you that my demeanor is different because I have an emergency situation in my house. The first line of my thing says this has been a week. So, that goes along with what's going on. I do appreciate all the work that's gone into this. Thank you to all the citizens that reached out via text, email, social media, and good old-fashioned phone calls. Previous Mayor Mundinger, also thank you. You gave me a lot of great insight into history and things like that, and I do appreciate the time you spent with me, and thank you, Mr. Schirmbeck for all of your feedback. I also appreciate it. Each one of you gave me some great things to think about. I tried my best to respond quickly to everybody that reached out to me. I have a profound sense of responsibility and commitment to the well-being of our community. The decision we are facing regarding this property is not one that I take lightly. It's a decision that impacts every resident of Baytown, including the ones that I was elected to represent in District 2. It is my opinion, though, that the current situation regarding this property is that we're not here to decide whether to invest in the golf course, which we heard many of you say. That decision was made long before I sat in this chair. Let me just be clear from the outset. I would have voted against that golf course,originally. I actually loved Evergreen Park. I loved its disc golf. It's large level concrete sidewalks. It's stocked fishing ponds. It even had kick soccer golf. The clubhouse was beautiful. I attended galas there. It was always booked out fre- quently. I didn't want to spend any of our money to change that over, but it's my understanding • that the clubhouse is unfinished and not rentable right now. Despite my initial opposition, I recog- nize the reality of our current situation. We are at a crossroads where inaction is not an option. The property asset could deteriorate and taxpayers'dollars would be spent on it one way or another as we saw here tonight. It would be irresponsible to allow further decay when Troon, which, by the City Council Special Meeting Minutes May 07,2024 Page 12 of 14 way,is not a developer,they are a management company that they're offering to help our commu- nity make the next best step. I believe this vote represents a commitment to protect an investment where taxpayer dollars have already been spent. I wasn't part of that vote. My debate is not about whether that was the right decision. My vote represents how to move forward. Last week, I did choose to abstain from my vote. Tonight, equipped here with more insight, I want to make a more informed vote, so I won't be abstaining. For me, I'm here to consider a temporary measure, a tem- porary extension to allow Troon to finish out this fiscal year. That's what I'm voting on, a little over 100 days for complete necessary upgrades to the kitchen and provide additional data. I want some more data on the golf as well. The decision's not about committing to long-term investment for me. It's exactly what's on the agenda. This fiscal year, it's about ensuring continuity and prop- erty management while our council and staff work together to determine the best path forward. This temporary agreement is not about supporting a failing venture for me. I agree we need to look at other options such as returning to disc golf.We got to get out real RFPs for future development, but in my opinion,it's irresponsible to allow a property asset to possibly decay when Troon's avail- able. I'm almost done,but it was important for me to say all of this to you all because it's a way to get all of my thoughts out at once to all the people that reached out. So,thank you all for allowing me this time and again apologize about my demeanor. The reality is whether we vote today or not to accept Scenario 1, 2, or 3, taxpayer dollars are going to be spent on this property. If we fail to act, we face the prospect of boarded-up buildings and neglected lots, which cost taxpayers in the long run. Furthermore, the decision is not just about golf. It's about showcasing Baytown as a community that values quality amenities and economic progress. It's about attracting future devel- opers, who will then share our vision for the development and revitalization to the south side. It's about changing the current projection of our town,not what has been,but what will be. By approv- ing a temporary measure, we're not saying yes to a bailout of Build Baytown; that's not how I see it,but a yes for time for the property asset. We're saying yes to maintaining the amenities that, in my opinion, enrich our community. We are demonstrating a commitment to fiscal responsibility while ensuring that decisions about our community's assets are made thoughtfully. It's essential to recognize the vital role our general fund plays in supporting the fabric of our community. There are various projects and upgrades funded by our general fund each year from our desire for a dog park over in Lakewood to the ongoing enhancements of Jenkins, Pirates Bay, and Roseland Park. All of these initiatives play a vital role in enhancing our quality of life and strengthening our sense of community. These projects are not just expenses, they're investments in the well-being and enjoyment of our residents, so let's just remember that as we vote." Mayor Capetillo solicited a motion taking Item 4.a. and 4.b. together. A motion was made by Council Member Laura Alvarado and seconded by Council Member Mike Lester to approve Ordinance No.15,792 and Ordinance No. 15,793 related to Item 4.a. and 4.b. with Scenario 2, which is 1.9 million not to exceed including the contract with the management company to be a 90-day with two 30-day renewals. Council Member Powell commented,"Obviously, I'm going to be opposed to this,but I would just encourage those on Council that are in favor of this. We do not need to take this 1.9 million from our reserves. We don't have that available. If you think this is a good idea to approve this, then I • think you need to be able to make the hard decisions of where can you find 1.9 million in areas that have already been funded.We need to make some decisions and prioritize and we need to say no to some other things if we're saying yes to this." City Council Special Meeting Minutes May 07,2024 Page 13 of 14 • City Manager Jason Reynolds commented, "Mr. Powell, would you be okay if the motion was amended to frame that to pull from the reserves with the intent for City Staff to bring back to the Council to show how the operational expenses are covered and to pay back the reserve?" Mr. Reynolds recommendation was not considered. The motion is as follows: A motion was made by Council Member Laura Alvarado and seconded by Council Member Mike Lester to approve Ordinance No.15,792 and Ordinance No.15,793 related to Item 4.a. and 4.b. with Scenario 2, which is 1.9 million not to exceed including the contract with the management company to be a 90-day with two 30-day renewals. The vote is as follows: Ayes: Mayor Brandon Capetillo, Mayor Pro Tem Laura Alvarado, Council Member Sarah Graham and Council Member Mike Lester Nays: Council Member Kenrick Griffith, Council Member Jacob Powell and Council Member James Franco Approved ORDINANCE NO. 15,792 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAY- S TOWN, TEXAS, AUTHORIZING AN AMENDMENT TO THE FISCAL YEAR 2024 BUDGET TO AUTHORIZE A TRANSFER FROM THE GENERAL FUND FOR THE PURPOSE OF ESTABLISHING A NEW FUND SPECIFICALLY DESIGNATED FOR THE GOLF COURSE AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. b. Consider an ordinance authorizing the City Manager to enter into a golf facility man- agement agreement with Troon Golf, LLC in accordance with discussions held in executive session. ORDINANCE NO. 15,793 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAY- TOWN, TEXAS, AUTHORIZING AND DIRECTING THE CITY MAN- AGER TO EXECUTE AND THE CITY CLERK TO ATTEST TO A SHORT-TERM GOLF FACILITY MANAGEMENT AGREEMENT WITH TROON GOLF,LLC IN AMOUNT NOT TO EXCEED ONE-MIL- LION, NINE-HUNDRED THOUSAND DOLLARS ($1,900,000.00); AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. 5. MANAGER'S REPORT • There was no Manager's report given. City Council Special Meeting Minutes May 07,2024 Page 14 of 14 • 6. ADJOURN With there being no further business to discuss,Mayor Capetillo adjourned the May 07,2024, City Council Special Meeting at 10:38 P.M. ,,,., r 4'1 Angela kson, City CI ^- City of Baytown ul paa JF, 7 r • • 5/15/2024 • Troon Presentation for City Of Baytown . . , , 11 � � � ,: Nib III • MAY 7, 2024 TROON S Annual U.S.Rounds Played In Millions 1999-2001 SI8 2020-23 529 53, `) 'T.ger B a 'Cowl Er Rounds • 50 ID% • From 1986.2001 from l(k:�J21 U.S.facBRies .27% i U.S fan-Ues -11% Parlc.patan .52% From -11% Rounds .43% RcurMs .3% 300M RoundS m o 0 0 0 0 0 o m — n_ m imEmm_ memo, RinliiAIIRR��^�'RRR000 M22 500.00 Golf Datate lt.wMs NGf support and¢nalyv5 January 2034 'Mole.2018 car 2019 wne:w of me loon wenest yeas on rttwc Oafe o, rmuO rnua NOF TA.8raphc car' y 5e GA n.(1I o•gwl w.m. nere.<arxvt no W iepurpus d wrtlrouf perm,ssan I.O,NGF ROUNDS GROWTH TREND = SUSTAINABLE SURGE TROON • 1 5/15/2024 • U.S. Golf Participants,in Millions(Ages 6+) Total •Off-Course only 45.0 •On-Course 41.1 369 375 29.4 30.1 31.1 32.0 32.1 33.5 34.2 4.6 8.2 24.7 = 8 23-8 24.2 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YOY GROWTH ON COURSE ACTIVITY TROON • Junior Golf Participation-U.S.10-Year Trend On-and Off-course.in Millions(Ages 6-17) Total ■OH•Course(exclusive) •On-Course 7.4 7.5 6.4 52 50 52 49 56 46 47 ;p a� as 20 3.0 � 31 34 35 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source National Golf Foundation 'OH'caorse golf✓cicdes golfenRvtarwnenf venues(Topgolt prove Shack.etc).standalone dwon0 ranges.end/w the hundreds of&nnnesses that now have srmotatws and screen golf setups fehrary 2024 Pus,rap,r., M.n.nn,f,,frFn, ,mColanere, honor owaity2arFn,~ad.,froefa,mn,M,homNG! NC;F JUNIOR GOLF CONTINUES UPWARD TREND TROON • 5/15/2024 • All-New Golf Courses in Development 10-Year Trend,United States •Courses in planning' •Courses under construction' Total in planning and under construction ® m m4-year averages D 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 CONSISTENT RISE OF NEW COURSE CONSTRUCTION TROON S U.S.Course Supply and Net Change-By Type (Since Current Market Correction Began in 2006) •Municipal •()ally Fee Li Prorate 15,963 Mal courses at.aoi 2023 Net soppy change vs 2006 by course type -17%18,655 -14% 4.367 +5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source Netbnel Gott Foundebtn March2024 NCIF n yralaft tan u+M1 uryw,bon p..r..ne,e..,..r,roi aemu..ry rows>nM mnruut ye,m,uan ham lLa MUNICIPAL COURSE GROWTH l TROON i° • 3 5/15/2024 • Agronomic Impact of Closure Assumes irrigation is turned off with zero maintenance. • 10-20 Days: Impact starts to be noticeable, course begins to dry down, with visible impact on putting greens.tees and fairways. Salvageable with some effort and resources, typically no real additional cost other than labor. • 20-30 Days: Further drying down begins to impact features, landscape. and appearance. Salvageable,but will take longer and require significant labor and resources to replace lost landscape planting and turf. • 30-60 Days: Turf declines to a point of death, weeds begin to germinate, and features (bunkers, cart paths) decline due to a lack of maintenance. Salvageable, but now becoming significantly more difficult, with replacement of greens turf, and possibly other large areas of turf depending on weather. • 60-90 Days: Essentially total loss of turf and features due to being in summer,with no repairs to drainage systems, or operating irrigation system. Weeds and invasive species develop, bunkers and features deteriorate, re-grassing of areas will be required. TROON • Minimum Maintenance Assumes Skelton Maintenance Crew(3-5) and Minimal Irrigation. • Maintenance is reduced to just the putting greens, with periodic mowing of other turf areas. • Irrigation to provide the minimum sustainable growth of greens, tees, fairways, and rough in order of priority. • Some chemical control of weeds and insects to maintain turf health. Also with greens as a priority. • Provide some level of regulatory compliance (environmental, OSHA, waste management). • Provides a human presence for security and protection of the asset. TROON • 4 5/15/2024 • 4_ c: . : 2. � • �`.-• + - .-� - .f�r�'�+�r "1` _ .• } -.ram • WHAT CLOSURE MEANS FOR THE COMMUNITY TROON a • f } - tom' t a►,. • r' 3;_ r'ti+Y' WHAT CLOSURE MEANS FOR THE COMMUNITY TROON ' • 5 5/15/2024 • ----i& .. . .,,, - , . ,,,, - ,.-,w- - "PIM 1 L r ' •rio, „:_. , �- .,.. . .. ... :. . . . .. . . • .... _ . ... .. . . .... . . ,..,„.......,„,....„....., , _ _ THANK YOU TROON • • 6 5/15/2024 • Golf Course Then , Now, & Next Steps 0........:,_.,: _0111101. _..._ ,_ __ ism BAYTOWN S 41111 How did we et here? g 8A1 T011\ z • Project Kick Off • Course Opened; Clubhouse not finished • Red Flags — Vendors not paid • Notice of Default • Left & Right Boundaries for a path forward • Ph I, Ph II, & Ph III • May 2 & May 3 • 1 5/15/2024 • • BAYTOWN Item# Item Description Costs Submitted 1 A&E Fees,Pre Development Fees,Cost Plus Mgt 750,000 2 Pre-Construction/Mobilization/Grading/Sta king 438,428 Summary of 3 Clearing and Grubbing 619,956 4 Drainage structures around 18 greens 110,750 Reimbursement -_ 5 Irrigation System 1,203,428 6 Tee Box Construction 137,928 7 Bunker Construction 418,428 8 California Greens Construction 738,428 Per the 380 Agreement 9 Cart Path Construction 612,250 3rd Party oversaw the pay draws 10 Grassing 516,590 11 Practice Field—Putting Service&Driving Range 453,814 12 TOTAL DEVELOPMENT COSTS 6,000,000 TOTAL-Pay Applications Paid by the City 5,880,494 TOTAL-Remaining Retainage Withheld 119,506 • How did we et here? g BAYTOWN • Project Kick Off • Course Opened; Clubhouse not finished • Red Flags — Vendors not paid • Notice of Default • Left & Right Boundaries for a path forward • Ph I, Ph II, & Ph Ill • May 2 & May 3 • 2 5/15/2024 • Items for Council Consideration BAY= Summary of Future Options & Financial Impacts • Scenario 1 — Settlement with BB1/T36 & Continue Operations • $3,569,986 • Scenario 2 — Short Term Agreement (only) & Continue Operations • $1 ,904,049 • Scenario 3 — Cease Operations & Explore Future Options • Unknown — ($250,000 — $500,000?) • How did we get here? B�lr TO o • Project Kick Off • Course Opened; Clubhouse not finished • Red Flags — Vendors not paid • Notice of Default • Left & Right Boundaries for a path forward • Phl, Ph II, & Ph III • May 2 & May 3 • 3 5/15/2024 • lir . . BB1 Bankruptcy And Now? art Need Direction What would Council like to do with the land? ® Troon is available • /4.-. �` :, • Right click this image to change eo. , .., [.. ,. ._.,... ,:„,, , .. ___ ._ the picture Next Steps s ;, r ,, J "� • 1• i`" i:A. , Necessary Funding 1t Itrrkt t 1 •-. � LL.. . All legal options explored J,, t, �� L "/ ��; A�•Yi' • 4 BAYTOWN GOVERNMENTAL FUNDS FY24 Proposed FY24 Adopted Budget Total Budget 101 General Fund Budget Adjustment Adjustment Expenditures: FY24 Budget Amendment General Fund Expenditures 138,918,936 ( (1900,000; 137 018.536 Totals 138,918,936 1,900,000 137,018,936 EXPENDITURES Total amendment required for golf course operations and the aquatics consulting contract SPECIAL REVENUE FUNDS FY24 Proposed FY24 Adopted Budget Total Budget Option 2 295-SPECIAL RECREATION FUND Budget Adjustment Adjustment Expenditures: T-36 Gclfcot.rse 1,900,000 1,900,000 Totals - 1,900,000 1,900,000 Total amendment required for golf course operations • • • • it BAYTOWN GOVE R"vMINTAL FUNDS FY24 Proposed FY24 Adopted Budget Total Budget 101-General Fund Budget Adjustment Adjustment Expenditures: FY24Budget Amendment Gereral-t.rd E.per'd1r.ures 138.918.936 1500A00) 138 418.936 Totals 138,918,936 (500,000) 138,418,936 EXPENDITURES Total amendment required for golf course operations and the aquatics consulting contract. SPECIAt REVENUE FUNDS FY24 Proposed FY24 Adopted Budget Total Budget 295-SPECIAL RECREATION FUND Budget Adjustment Adjustment Option 3 Expenditures: T-36 GctfccL.r=-e -CC C,,1\2 5Cc O . Totals - 500,000 500,000 Total amendment required for golf course operations- • . .