The Willowick Golf Course is an 18-hole commercial golf course owned by the City since 1964. The golf course and its amenities, which include a clubhouse and restaurant have historically produced a net positive income stream to the City’s General Fund. Over the past few years, the Willowick operations has experienced a gradual decline in income that is likely commensurate with golf popularity waning. Concurrently, an expiring management agreement for Willowick has made continuing the golf operations uncertain. Given these factors, initial efforts to explore long-term economic sustainability of Willowick commenced. From an approved 2017 Memorandum of Understanding, early discussions associated with potential reuse of the Willowick property initiated between the Cities of Garden Grove and Santa Ana. Through a progression of Joint Study Session meetings between Garden Grove and Santa Ana (December 2018 and April 2018), the Envision Willowick community engagement efforts (September through October 2018), and release of the Request for Proposals (April through June 2019), a comprehensive effort to explore the future of Willowick was proceeding.
Willowick Request for Proposal (RFP)
The response to the Willowick RFP resulted in twelve respondents of which nine (9) contingent proposals and three (3) non-contingent cash offers were received. In July 2019, eight (8) contingent proposers were invited to a presentation and interview process by the City of Garden Grove in collaboration with the City of Santa Ana. Evaluations of the non-contingent cash offers proceeded under a separate process by the City of Garden Grove.
Willowick Alternative Proposals
Unexpectedly, various entities have offered alternative proposals to acquire Willowick on the condition that the transaction is completed prior to December 31, 2019. This was an unanticipated development. Given the economic magnitude, a comprehensive review and negotiations of the alternative proposals was conducted to determine potential long-term economic sustainability for Garden Grove and Santa Ana. The alternative proposals were offered by the following entities:
1. InSite Property Group
2. Landspire - Lyon Living - Integral Development, LLC
3. Majestic Realty Co.
4. McWHINNEY Real Estate Services, Inc. (“McWHINNEY”)
5. West Coast GC Group, LLC
At the November 26, 2019 meeting, staff received City Council direction to finalize negotiations of a Master Ground Lease with McWHINNEY for consideration at the December 10th City Council meeting.
The City of Garden Grove has disclosed to McWHINNEY that there is currently pending litigation affecting the Willowick Property brought by Orange County Communities Organized for Responsible Development. While a Temporary Restraining Order has been issued on November 26, 2019, the City is permitted to continue to negotiate an agreement for the disposition of Willowick and the City Council can approve a final agreement at its regular meeting of December 10, 2019 provided the agreement doesn’t become effective or the disposition consummated until after the court’s decision on the scheduled hearing on a preliminary injunction, provided the court’s decision does not enjoin the City from consummating the transaction. A preliminary injunction hearing is scheduled for December 17, 2019.