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Published: Thursday, Jul. 29, 2010 / Updated: Thursday, Jul. 29, 2010 05:20 PM

Tega Cay amends Pinnacle's golf course contract

TEGA CAY -- 

The management team that oversees Tega Cay’s golfing operations has survived the ax for now.

City leaders had to decide by the end of this month whether to exercise an early contract extension clause on the city’s golf management contract with Tega Cay Management Group, LLC, also known as Pinnacle.

Less than a month ago, city leaders suspended its food and beverage operation at the clubhouse, effectively removing Pinnacle at its suggestion from the management helm. Now, city leaders are back at the table with another decision.

“Council elected to amend the agreement so that Pinnacle is renewed for one year with an additional one-year option,” City Manager Grant Duffield said. “Also, because we have scaled back food and beverage, Pinnacle has agreed to scale back their management fee.”

“Pinnacle currently receives about $90,000 annually,” Duffield said. Under the amended contract, that amount is reduced to $86,000 annually, he said.

The amendment takes effect Aug. 1.

Shutting down food and beverage under Pinnacle’s watch paves the way for city leaders to explore alternative management. That move provides for another cost saving for the city.

“Once the city obtains a new food and beverage operator, Pinnacle’s management fee drops to $72,000 per year,” Duffield said.

Council member Stephen Perkins supports the move to amend the existing agreement.

“By getting a one-year renewal with a second one-year renewal, it gives the flexibility for us to come back to the table and see if we want to go into another year with Pinnacle,” Perkins said.

The city entered into the existing contract with Pinnacle on Nov. 1, 2007. That contract was to expire Oct. 31, 2012, according to the contract.

For nearly three years, Tega Cay Management Group, LLC., has overseen the Tega Cay golf course and other entities. For now, the management firm oversees the city’s golf greens, a 27-hole entity, as well as a club house, restaurant and bar, an outdoor pavilion, tennis courts and the Glennon Center, the contract notes.

In recent years, the management team has faced challenges.

Rain and snow cut down on playing time. Damaged greens shut 18 holes down around Labor Day. The downturn in the economy had people cutting back on spending for luxury items, such as golf. Those factors played a role in the ability to turn a profit, city leaders contend.

Documents show that in 2008 the Tega Cay Golf Club had a net loss of $188,832. Last year’s documents show a net loss of $214,766.

Under Pinnacle’s watch, food and beverage at the clubhouse, not to be confused with the Glennon Center’s food and beverage operation, brought in $260,000, Duffield said. So far this year, he said, food and beverage yielded about $183,000.

But that’s a problem, he said. “They’re budgeted year to date to do $241,000,” Duffield said. “The numbers speak for themselves.”

Now that the city has suspended food and beverage operation under Pinnacle, the question becomes who will oversee that service.

“We’re looking at two options,” Duffield said. “We’re looking at issuing two requests for proposals, one that will deal with food and beverage services at the clubhouse and then one that deals with events services at the Glennon Center.”

However, nothing is set in stone.

“The concept is that the Glennon Center events will be serviced through probably a catering arrangement and not the kitchen in the clubhouse unless the same entity manages both the clubhouse and the Glennon Center,” Duffield said.

Several residents voiced concern about bringing in more than one leader to take over responsibilities for food and beverage.

“Seems like you created a heck of a management problem for the city,” Paul Muraco told the Tega Cay City Council about two weeks ago.

Muraco suggested city leaders consider hiring one entity to oversee food and beverage.

“That makes a lot of sense,” he said. “I would think you’d be a lot better off, save a lot of headaches. If I was the guy bidding, I’d want the whole enchilada.”

Several council members chimed in on Muraco’s suggestion. “It could be one party if it has the right skill set,” Perkins said. “One person has the option to bid on both RFPs.”

During that same meeting, city leaders called for forming a committee to help the Tega Cay City Council reach a decision.

“‘Since its inception, F&B (food and beverage) operations have struggled at the TCGC (Tega Cay Golf Club),’” city officials wrote in a memo to the selected committee. “For brief periods, F&B ops have flirted with profitability, although such periods have been short lived. Earlier this year, Pinnacle recommended to the city that non-event oriented F&B operations in the clubhouse be suspended….At the further suggestion of Pinnacle, the city now seeks to recruit F&B providers to service the clubhouse and the Glennon Center.’”

Each person selected to serve on the committee has experience in the food and beverage industry. The committee was to hold its first meeting July 27.

“What we’ve done is create a food and beverage ad hoc committee made up of nine individuals,” Duffield said. “That ad hoc committee will help us define what our request for proposals needs to look like.”

That process could take up to seven months.

City leaders will consider what to do even as the committee works on its recommendation to the city council, Duffield said.

“Whatever we do, we want to make sure that operations are well coordinated,” he said.