SalemNews.com, Salem, MA

Local News

March 10, 2014

Golf club company's revenue figures have holes

Monthly reports to city left out totals

BEVERLY — When recommending that the city renew the management contract for the Beverly Golf and Tennis Club, Mayor Mike Cahill and club commissioners cited the management company’s strong performance as the main reason.

One thing Cahill and the commission didn’t mention is how much money that company is making by running the city-owned club.

Cahill and the commission chairman acknowledged they did not know Golf Facilities Management Inc.’s annual gross revenues before recommending that the city extend the company’s contract for another five years.

Those recommendations are now before the City Council, which must approve the contract extension. The city also has the option of putting the contract out to bid again.

“We could travel a different path, but the reality is that for the first time in a long time there’s a high degree of satisfaction on the city’s part, the commission’s part, and members’ part that this is a management company that’s doing an outstanding job,” Cahill said.

The city signed a five-year contract with GFMI in 2010. The deal called for the company to pay the city an average of $340,000 per year in exchange for the right to manage the club and keep most of the revenue above that fee.

The contract also has an option for the city to extend the contact for five more years beginning in 2015, with the average annual payment to the city increasing to $400,000.

The contract requires GFMI to report gross revenues to the city on a monthly basis. Those figures must include revenue from golf operations as well as from the club’s pub, restaurant, function rooms and tennis courts.

But Cahill said the reports submitted by GFMI do not include gross revenue totals. He said city officials are working on obtaining those numbers in order to present them to the City Council tonight.

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