Council addresses outcry over proposed $18M sale of Vallejo golf course

VALLEJO – The Vallejo City Council responded to community concerns on Tuesday about a potential sale of the Blue Rock Springs golf course for $18 million only eight months after the city sold the property to a developer for $400,000 with an incomplete profit sharing agreement.

The council approved the sale of 74 acres of the golf course to a developer under the business name Blue Rock Springs LLC, which is owned by the Lewis Management Corporation, in December 2022. Prior to the sale the city owned two 18-hole golf courses one on either side of Columbus Parkway, 225 acres in total, which city officials said was appraised for $6.99 million. The 74-acre portion of the property was appraised at $285,000 but Blue Rock Springs offered $400,000 with a profit sharing agreement to be completed after the sale.

At Tuesday’s meeting, the council was set to vote on whether to extend the timeline to finalize portions of the sale contract between the city and Blue Rock, including the city’s profit sharing agreement.

But Councilmember Cristina Arriola called for a more thorough discussion of the item due to community concerns about an advertisement for sale of the golf course that Blue Rock posted last month.

Assistant City Manager Gillian Hayes said that the developer listed the property because they were looking into potential opportunities to partner with another developer to build a resort, housing and golf course concept on the land.

The ad and the brochure offers 57 acres of commercial land for sale as an investment in a hotel proposal with retail and residential options. The language of the brochure suggests that “the Blue Rock Springs Hotel and Resort opportunity” is part of an existing foundational design plan.

Lewis Operating Corporation Vice President Jeb Elmore said that the sale of the 57 acres would ultimately be a portion for another developer to operate within the design regime and entitlement process conducted by Blue Rock in partnership with the city.

“The nature of the marketing package insinuates that we will act as master developer to deliver all or a portion of the property including entitlements and backbone infrastructure,” Elmore said.

Councilmember Mina Loera-Diaz said she was concerned because she heard about the listing through social media and not from staff or directly from the developer.

“To see this up for sale was very disheartening for me because I couldn't answer my constituents,” Loera-Diaz said. “The simple explanation, as you're doing right now, would have alleviated tons of people totally upset in the city saying, ‘Are the developers flipping this property?’ Which is not so.”

Mayor Robert McConnell said that his office also received a lot of complaints. “That ad could have and should have been better written because it was very misleading,” he said.” It was kind of a waste of a lot of people's time and effort and concern.”

During public comment, Andrea Sorce, co-chair of the Solano County chapter of the ACLU who is running for mayor, said that the city bungled the sale because they failed to negotiate the profit sharing agreement before transferring the title and now the developer stands to make a massive profit, leaving little recourse for the city other than extended litigation.

“Why are we letting a developer make millions and millions of dollars off of our assets? Why are we selling our assets before we negotiate community benefits? You all need to put your foot down and get answers here because we've got to stop the bleeding,” Sorce said. “Get answers from your staff and get answers from the developer tonight.”

A sale price for the property is not listed on the ad, but Sorce said that community members who had called the real estate agency received a quote of $18 million.

Hayes said there is a difference between the price of the vacant land that the city sold and the price of a project that has advanced through some stages of development, such as securing permits for specific design plans or developing basic infrastructure, suggesting that $18 million was a buy-in price for another developer to participate in the larger project.

The original purchase and sale agreement, said Hayes, guarantees the city a portion of any sale at any point in the development process. She added that if certain timelines and conditions are not met there are clawback clauses in place that require the property to be returned to the city.

Elmore apologized for not communicating with the council about the property listing. He said that the company wants to explore all the possible options for development of the property and since Blue Rock does not have specific expertise as a resort developer, they posted the advertisement as a way to reach out to developers in the national real estate market who may want to partner on the project.

“About $30 to $50 million needs to be invested on this property before it ever can be anything other than a golf course,” Elmore said.

Elmore said that the developer’s contract with the city requires Blue Rock to deliver that development investment in property.

“And with regards to that flip concern, not only does the city have unilateral control on that, we are capped on our profits. If we flip the property for what was described as $18 million after paying $400,000 we would get probably about $100,000 and the city would get the full balance of those funds.”

The council approved the extension to finalize the remaining portions of the contract and asked that Elmor report back to the council every three months with updates on the project.

On Thursday, City Manager Mike Malone issued a statement to reassure residents that the developer was not trying to “flip” the property.

“Researching land uses on a site is part of the regular due diligence process developers often conduct on potential developments to ensure all options are investigated and all opportunities are considered for highest and best use of the site,” Malone said. “This information informs the community and decision makers as they consider future development opportunities.”