By LIZ BUTTON
The city has taken the first definitive step toward hiring an outside company to run Whitby Castle, the city-run club’s restaurant and catering facility.
At its last meeting, the City Council authorized City Manager Scott Pickup to hire a food and beverage industry expert to review and distribute a request for proposals to outsource the castle’s operations.
For the last decade, the castle has been more often than not a financial liability for the city-owned Rye Golf Club rather than a source of revenue.
The city and Rye Golf Club Commission agree that, this year, a projected $650,000 deficit for 2013 has put the proverbial nail in Whitby’s coffin. And the idea to outsource the castle gained significant ground this election season.
The topic of the golf club’s fate has dominated this year’s political campaign in the aftermath of last year’s financial scandal at the club. An independent investigation commissioned by the city and released back in February found that former club manager Scott Yandrasevich allegedly set up shell staffing companies to divert hundreds of thousands of dollars in members’ club dues to his own accounts.
Peter Marshall, chairman of the five-member Rye Golf Club Strategic Committee, presented the committee’s first draft of a request for proposals for an outside contractor to run the castle at the City Council’s Oct. 23 meeting.
The golf club commission voted unanimously Oct. 16 to support the release of an RFP.
But this is not the first time the city has headed toward outsourcing. Up until 2006, Whitby was run by outside contractor Restaurant Associates, before it was taken over by the city and handed over to Yandrasevich, a city employee, to run.
Time is of the essence when it comes to sending out the RFP, Marshall said. To this end, the city authorized spending up to $10,000 to hire Steve Zagor & Associates, a consulting company that provides restaurant industry expertise.
Since there is only a short timeline to get a food and beverage operator in for the 2014 season, Marshall said, before the official Whitby RFP goes out, there will be a pre-proposal conference Nov. 8 and 9 and all proposal submissions will be due by Dec. 18.
Republican Councilman Peter Jovanovich, who is running for mayor this year as an independent, said it is great that the council, supported by the golf commission, voted to lease out the castle at last, and praised [golf commissioner] Chris O’Brien for being of this opinion from the beginning.
Jovanovich said he agreed with one commissioner, who told him, “if we only get a dollar a year from this, that’s $400,000 or $ 500,000 a year that we’re saving.”
According to Jovanovich’s mayoral opponent, Republican Councilman Joe Sack, the club’s performance was so bad this year on the heels of all the other problems, that now the club is in a situation where there is going to be an RFP “whether you want to or not” because it’s become the most viable path forward.
Sack said he hopes attractive proposals will come flooding in, but said he was disappointed this year because, after the scandal broke last fall, he hoped 2013 would be a year to set a real baseline in terms of financial viability, which did not happen.
“The RFP is, in simplest terms, someone coming in to say, ‘I’ll pay you X amount of money and you let me use the place.’ They’re basically renting it from us,” he said.
Now that there is no realistic financial baseline set after the alleged fraud, the city does not know what the right rent is unless they know how much the club is capable of generating, Sack said.
While that search process is now underway, another search is also set to begin.
The city also authorized up to $15,000 to hire consulting firm Denehy-Club Thinking Partners, LLC to begin an executive search for a new permanent general manager.
The measure to fund the search passed with a 6 to 1 vote. Republican Councilwoman Julie Killian was the lone member of the City Council to oppose the hiring. She said the timing wasn’t right.
“We don’t understand what the job is. We may be outsourcing. We’re not very sure how the whole castle will be run going forward,” Killian, who is running for re-election this year, said. For example, she said, what if a company comes in and just wants to run the snack bar or just wants to do catering events out of the castle?
Pickup said Killian’s concerns will be addressed because Denehy is aware that the job description is in flux and that there may be two possible outcomes for the situation.
For now, the city will pay $15,000 for the first two of five steps in the search process, assessing the castle’s needs and creating that job description. When a candidate is hired, the city will pay the rest of the fee of $36,000.
Marshall, who since earlier this month has been volunteering to help interim manager Jim Lopolito run the club, has personally expressed interest in running the golf club full-time next year. According to sources within the club commission, during a recent executive session, Marshall requested a six-figure salary for the position.
“If we are in the marketplace and are successful to come up with a vendor, because of the way we have decided to structure the operation for 2014, we have a window where we can have a new vendor sort of seamlessly slide in for the 2014 season,” Pickup said. “So it is one of these opportunities where I think it is the right time.”