City council approves draft grant agreement with golf club

Libby City Council narrowly approved the proposed terms of its forthcoming $541,000 grant to the Cabinet View Golf Club on May 3.

In a 3-2 vote, city councilors approved the document, which underwent minor edits at the meeting. The dissenters, city councilors Rob Dufficy and Hugh Taylor, argued that the agreement ran contrary to the body’s April 5 vote on the issue.

The grant, aimed at aiding the golf course erect a new clubhouse, spun out of negotiations to resolve a longstanding dispute over a $1.54 million loan given by the city to the organization in the early aughts.

In 2004, city councilors — then sitting on an $8 million pot in unrestricted federal economic development dollars — agreed to finance the construction of the course’s back nine. Officials expected the no-interest loan would be repaid after the club developed nearby land into residential housing.

But the proposed development never emerged. Contentious discussions regarding bringing infrastructure to the area later soured the relationship between the city and golf club.

Earlier this year, club officials revealed a possible fix: They had lined up a potential buyer for the property. Though they have refrained from disclosing the name of the interested party, club representatives said the prospective buyer would be familiar to locals and specialized in residential development.

The only catch? The golf course requested partial loan forgiveness to make the deal work. Representative George Mercer initially asked city council to forgive $662,125 of the original loan.

City councilors — and residents unaffiliated with the club — balked at the proposal. Club officials said they stood to make $1.75 million on the sale before repayment of the loan, though the property was listed at $3 million.

City councilors eventually came around to offering a portion of the funds as a grant for construction of a clubhouse upon repayment of the loan. In a counteroffer, club officials asked for an upfront guarantee of the grant. Without it, they would kill the land sale, Mercer said.

On April 21, city council agreed to those terms over the objections of Dufficy and Taylor. Taylor pointed to the prior city council vote, which indicated the grant would be considered separately and on its own merits. At the time, Dufficy told his fellow city councilors that he could not guarantee his future support for giving the club $541,000 for its project.

They repeated those objections May 3.

“There is no reason for us to hurry on behalf of the terms and conditions of this grant,” Taylor said. “That’s my opinion.”

As for edits, city councilors tightened the language around what the funds could go toward, stipulating that it be only documented construction costs. The golf club could not, for example, use the money for maintenance of the grounds, said City Councilor Gary Beach.

City councilors also named City Administrator Jim Hammons as the municipality’s liaison with the golf club. Other changes included edits to dates and the addition of clarifying language.

The contract gives the golf club three years to draw upon the dollars. No money may be used for any work conducted prior to the May 3 vote. Club officials can draw upon the dollars after showing documented expenses. Officials have yet to work out the timeline of reimbursement.

“This is a construction project and it’s complicated compared to some other projects,” said Tina Oliphant of the Kootenai River Redevelopment Council, who helped draw up the arrangement. “How nimble they have to be versus your process for check writing — that all needs to be streamlined. Even though it’s a half million bucks, it warrants this level of streamlining.”

If the golf club cannot begin work within three years, they’re expected to update city officials on their timeline, according to the contract. It also includes standard language on insurance and workers compensation.

Under the agreement, City Hall can terminate the contract if the golf club or its contractors fail to comply with any of the terms of the arrangement. To do so, the city must identify a failure and give written notice to the club, allowing it 30 days to remedy the situation. The parties can alter the contract by mutual agreement.

City Attorney Dean Chisholm agreed to examine the document once more before sending it to the golf club for review. But the proposed agreement aligned with his sense of what city councilors were hoping to achieve.

“It seemed to fit with the general ideas I’ve heard in the last couple of meetings,” Chisholm told city councilors. “I think it’s a good draft that you can send over to the other side to see if they have comments.”