One week after the El Segundo City Council approved a deal turning its 26.5-acre municipal golf course over to a for-profit company, a local resident is leading a referendum effort that could send the matter to a vote of the people as early as the March 2020 election.
Dennis Poor represents a group of area residents and golfers who want to preserve The Lakes golf course the way it is, saying a deal with Topgolf would change the face of the golf course and the community.
“They are just looking at it with dollar signs,” Poor said in an interview Thursday, Oct. 24. “It’s just changing what our community stands for.”
City Manager Scott Mitnik said problems with the paperwork submitted by Poor means that it will be returned. But Poor says that detour won’t deter his group, which is raising money through Save the Lakes Foundation.
Ballot referendums act to approve or reject all or parts of a law. In this case, the petitioner is targeting a series of ordinances approved last week paving the way for El Segundo-based CenterCal Properties and Topgolf to redevelop the golf course on Sepulveda Boulevard.
Under a deal approved on first reading by the City Council in a 4-to-1 vote Tuesday, Oct. 15, CenterCal — together with Topgolf — would pay to the city $1.3 million per year, with the rate increasing 10% every five years. They would also pay at least $200,000 per year in beverage-sale revenues and another $200,000 for a capital improvement fund, among other payments.
The deal has an initial contract period of 20 years with six possible five-year extensions.
A second reading of the ordinances inking the deal will come before the City Council again on Nov. 5. The first time around, Councilman Don Brann was the sole dissenting vote.
“It ain’t over till it’s over,” said Brann, echoing Yogi Berra’s familiar malapropism, referring to the expected referendum to reverse the council’s decision.
Changing the game
Under the plan, CenterCal Properties — the same company that is embroiled in litigation with Redondo Beach over a failed bid to redevelop the waterfront there — would provide a loan to Topgolf and serve as the primary ground lease holder. Topgolf would then sublease the property and redevelop the driving range into a high-tech arcade-style venue with food and beverage similar to its 57 other locations in the U.S.
In 2017, a council consisting of different members walked away from a proposal worth $625,000 per year. In addition, the company in 2017 was offering $2.5 million in improvements to the golf course; the current deal would include $3 million in upgrades.
Topgolf Director of Real Estate Devin Charhon said the company was breaking down barriers to the game of golf, which can be expensive, time consuming and difficult.
“This is an opportunity for us to transform and create potentially a model for municipal golf in this country,” Charhon said.
As part of the negotiated agreement, the nine-hole executive golf course would be managed by Billy Casper Golf, a separate company that specializes in golf-course management.
Officials at CenterCal first floated the idea to redevelop The Lakes golf course with Topgolf as early as 2013, but it was not until elections five years later that the development partners had clear support on the City Council.
Elections in April 2018 added Councilmen Scot Nicol and Chris Pimentel, giving Topgolf majority support.
Later that year, the city put out a request for proposals to redevelop The Lakes. In November 2018, it selected Topgolf for exclusive negotiating rights out of nine competitors.
Over the years, the Topgolf proposal has drawn criticism from many residents. Some first opposed the city’s failure to create a competitive bidding process for the deal until the city redid the process. Some golfers are fearful of losing one of the only driving ranges in the area. Manhattan Beach mom Wendy Finster, whose kids use the facility for practice, is among parents who worry the course’s family atmosphere will change.
Ellen Rosenberg, Los Angeles County Board of Education member, urged the council to be “mindful of the gem” that is The Lakes, gifted to the city by Chevron in 1994.
“Topgolfs are attractive, they are snazzy and physically large, but it’s like if someone would agree to build a pool for the city but they would put a casino in front of it,” Rosenberg said.
Mitnick said at last week’s council meeting that provisions were included in the deal that required allowing minors to have access to the first floor of the driving range building.
Brann said the council has “sacrificed its integrity” for the sake of money.
“I think it’s attractive municipal land,” Brann said. “They aren’t going to go out and buy that land… All of a sudden, will we now start talking about other companies leasing the parks? What’s next, the baseball diamonds?”
Brann said Topgolf missed the deadline on the proposal, delivered 36 minutes late.
He believes the plan does not have widespread support among voters. In 2016, during his election campaign, Brann said he conducted a professional phone survey of El Segundo voters and found that 50 percent were against Topgolf and only 40 percent in favor.
One resident, Andy Walter, told the council last week the project only made sense when considering the financial perspective. The golf course has operated at a deficit for several decades.
“It’s going to be a bloated and overpriced facility that will ruin the sense of family we have now,” Walter said. “All that money is going to come from somewhere, so while more money will go into the city’s coffers, a lot of money is going to come from the pockets of people in this town.”
Details of the deal
If the project receives final approval next month, construction could begin as early as February with an opening date likely sometime in early 2021, according to city planners.
Topgolf has agreed to the following:
- Lease payments of $1.3 million per year and 3% gross receipts from beverage sales at a minimum of $200,000 per year;
- A community benefit contribution of $200,000;
- A minimum of $40 million in capital investment, including roughly $3 million spent on the golf course;
- A capital-improvement reserve fund to be established worth at least $200,000;
- Paying for an 1,000 hours of law-enforcement coverage — followed by splitting the cost with the city.
Alterations to the current nine-hole course, practice area and clubhouse include the following:
- Shortening of the overall course from 1,340 yards to 1,206 yards, mainly taken out of holes 1 and 9;
- Adding lights for night golf;
- Surrounding the 3-hole with a water hazard;
- Building a new 2,500 square-foot clubhouse with 1,000 square feet of outdoor space;
- Expanding the putting green and chipping area, roughly tripling it in size.
For golf enthusiasts and local residents concerned about the cost at the driving range, Topgolf has agreed to the following pricing (without the use of the company’s tracer technology):
- A bucket of 45 balls for the driving range will cost $10 from 6 a.m. to 12 p.m. Monday through Friday, and 6 a.m. to 9 a.m. Saturday and Sunday;
- South Bay residents will receive a 10% discount on course fees all week from 9 a.m. to 9 p.m.