The URL can be used to link to this page

Home My WebLink AboutVirginia Beach National Golf Course UpdateRequest for Proposals – Virginia Beach National Golf Club Emily Archer, Economic Development Acting Director City Council, June 16, 2026 Purpose •Overview and background of Virginia Beach National Golf (VBNG) •Review RFP process to date •Examine the selected proposal for VBNG •Review the purchase terms negotiated •Seek City Council direction on next steps 2 The City leases the Golf Course to VBDA, which has a management agreement with Virginia Beach Golf Club, LLC for operations. The operator’s term expires in December 2026. 2500 Tournament Dr •Area: 350 Acres •Uses: An 18-hole, 7,432-yard course designed by Pete Dye for both tournament and public play & the YMCA’s First Tee 9-hole youth golf campus and driving range •Zoned: AG1, ITA Overlay (308 acres), & Courthouse District Overlay (13 acres) •City Council District: 2 •Assessed value: $13,614/acre ($4.8 Mil) •Market value estimate: $18,500/acre ($6.5 Mil) YMCA’s First Tee (50 acres) VBNG Non-ITA Overlay Area (42 acres) 3 4 VBNG Overview •The City of Virginia Beach leased the property to the Virginia Beach Development Authority (VBDA) in 1997 for the development of a Tournament Players Club (TPC) Golf Course. •The City of Virginia Beach purchased the course for $4,584,318 in December 2006 from TPC. •The VBDA and Virginia Beach Golf Club, LLC, entered into a management agreement in 2007, which expires December 2026. •An Audit was completed on VBNG in October 2023 and detailed numerous items in disrepair. Including: •Stormwater facilities inspections that were given “serious” and “degraded” grades •Clubhouse with rotting eaves and fascia board along the roofline •Mold in the restaurant and rotted baseboards •Deteriorating ceiling caused by leaks •Non-functioning HVAC unit in the kitchen •In Spring 2024, VBDA conducted condition assessments, $7.7 Mil in Capital repairs were identified. VBDA appropriated $1.8 Mil of Innovation Park Land Sale proceeds to address Capital Maintenance needs. Golf Course Background 2005 Aerial 2025 Aerial 5 VBNG Financial Summary 2007 - 2025 Capital Maintenance Payments (to VBDA) Operation Payments (to the City) Profit Sharing Payments (to the City) Net Balance (VBDA Capital Maintenance balance) Total Taxes Remitted to City* Total Operation Payments and Taxes Remitted Annual Average $115,457 $116,156 $24,699 $(3,652)$83,953 $217,168 Total 2007 - 2025 $2,193,680 $2,206,958 $444,585 $(69,384)$1,595,103 $4,126,094 6 *Total taxes remitted include admissions, personal property, BPOL, sales, and food & beverage Per the current operations agreement, the Virginia Beach Golf Club, LLC pays: •Profit Sharing of 25% of net income over $100,000 – To the City •Capital Improvement Payment of 5% of gross revenues – To VBDA •Operations Payment of 5% of gross revenues – To the City •Virginia Beach Golf Club, LLC is responsible for all maintenance under $5,000 and VBDA is responsible for capital maintenance over $5,000. •VBDA’s portion of capital maintenance receipts is not adequate for the current level of maintenance needed. RFP Process •September 2025 - Following mounting capital expenditures and unsolicited interest from multiple parties, City Council authorized an RFP •October 2025 - RFP widely advertised for 45 days seeking proposals to acquire and maintain a publicly accessible 18-hole course •November 2025 - Nine (9) responses received, 4 with a housing component, and 5 for new golf course operations •December 2025 to January 2026 – Four (4) shortlisted respondents identified after a Review Committee convened and Council closed briefings, 2 with a housing component and 2 for new golf course operations •January to February 2026 - Interviews conducted •February 2026 – City Council authorized negotiation of a term sheet with the top-ranking respondent 7 Dragas Companies Disclosures 8 Bottom Line Up Front •Proposal maintains VB National as a public course, restoring the course to the Pete Dye world-class status and increasing sports tourism potential •A public golf course remains, and no changes may be made to the use of the property without City Council action •Project provides positive real estate tax benefits to the City •Provides additional diverse housing types at mixed-income costs, achieving a key City priority 9 10 Dragas Companies Proposal •A vastly improved public golf course •An estimated $38,160,000 will be invested into the Golf Course •World-class operations by Century Golf Partners and the redesign shall retain the style of Pete Dye •99-year repurchase option retained by the City •659 mixed-for-sale housing units with over half at or below 120% Area Median Income (AMI) •New childcare facility (1.8 acres) •Woodlands and environmental preservation (45 acres) •$3.4 Mil estimated in new annual tax revenue per year at stabilization 45 Acre GC Expansion A E D F Golf Course Renovations -Carefully crafted redesign by Timothy Liddy -No impact to First Tee -No homes on fairways or greens 11 Golf Course Proposal •Projected pricing includes a robust loyalty card program to keep golf affordable and locals engaged •Unlike now, VB residents will pay no initiation fee or annual dues •Virginia, non-Virginia and players club card offerings •Non-membership rates will start at $69 in season and $49 in off-season 12 Proposed Housing Types 13 Housing Diversity and Attainability •Housing types meet the diversity and attainability goals outlined for the Courthouse Area in the Comprehensive Plan •Anticipates that over half of the attainable units will be under 120% of AMI •At the Developer’s nearby Guilford at Spence Crossing community, more than 90% of homeowners earn at or below 100% AMI •Developer is experienced with the City’s rezoning process and is prepared to undertake that process during the due diligence period 14 Development Tax Projections 15 $3.4 Mil is estimated in real estate taxes per year (avg 20 yr) Purchase Terms 16 •Developer to purchase the property for $17,940,000. Those funds, plus a VBDA contribution of $1,820,000, will be utilized for golf course improvements in addition to $18,400,000 in private investment. •99-yr repurchase option: The golf course will be subject to a one-time market rate repurchase should the property cease to be used for a public golf course for a period of more than 2 yrs. City has the right to enter and maintain if closed for more than 6 months. Public Infrastructure & Project Contingency 17 •City contribution for public infrastructure improvements: •$4,300,000 for roadway turn lanes, Tournament Drive streetscape improvements, utility relocation, and a sewer extension •There are various unknowns at this time related to stormwater, subsurface conditions, and traffic impact •For that reason, a contingency is being proposed, with the upfront risk being shared between the City and Developer: •Developer: $10.2 M or 74% •City: $3.6 M or 26% •Should overages occur requiring use of the developer's contingency, future realized “But For” taxes would be provided in the form of a performance grant for reimbursement (not to exceed $10.2 million). Fiscal Impact Summary Cap Invest $7.9 M Revenue Sale of Property $17,940,000 Real Estate $3.4 Million (avg 20 yr) BPOL, Trustee Tax (Amusement, Meal, Hotel, etc.) $75,000 (avg) Childcare & Hotel Expenditures VBDA Investment $1.8 M Golf Course Renovations $17.9 M Public Infrastructure $4.3 M Contingency Cap Up to $3.6 M Contingency Reimbursement Grant Up to $10.2 M* 20 YR Cumulative Fiscal Impact $43.2 M 20 YR NPV $18.0 M 18 *Future annual "But For" revenue - reimbursing demonstrated overages Rate of Return on Public Investment 19 •Should all of the contingencies be needed, the City Cost Recovery is estimated to be between 2032-2037, assuming an 8-year construction period: •Due to additional private investment and new “but for” revenue, the City is estimated to recover the investment 9-14 years earlier than if the City were to invest an additional $7.7 million into Golf Course Improvements without private partnership. Infrastructure, Contingency, Grant Public Infrastructure $4.3 M City Contingency Funding Up to $3.6 M Contingency Performance Grant Up to $10.2 M* Payback Year < 10 yrs *Future annual "But For" revenue - reimbursing demonstrated overages 20 For Consideration A.Accept the terms proposed; proceed to a public hearing on the proposed sale of property •Potential Public Hearing: July 7th •Potential Vote: July 14th B.Maintain status quo with a new operator, continue to defer capital maintenance until funds become available C.Other as directed 21 Discussion Virginia Beach National Golf Club Hot Topics page established for more information and to stay informed