When a company owner hires vendors to manage and facilitate portions of their property or business, it is imperative that the two parties sign a contract. Business contracts should try to define the responsibilities and actions of each partner under every possible circumstance including tax ramifications, business plans and budgets, and how to handle disputes and breaches. When those contracts and business agreements are also affected by municipal permits, the waters get even murkier.
Such is the case with Meadow Creek Golf Club in Dracut. The actual golf course is in foreclosure and up for commercial real estate auction. The owner of the golf course has declared bankruptcy but the company that manages the course’s parking lot, clubhouse and restaurant is making the process difficult.
In an unusual agreement with the municipality, the owner of the course was able to get a permit to lease the clubhouse, restaurant and parking lot from the owners. When he defaulted on his lease, the owners closed up the buildings and placed barriers around the parking lot.
The course owner, while in foreclosure and preparing for auction proceedings, still wanted to open the golf course. He sought an injunction against the leasing company and was denied relief in Middlesex Superior Court. He opened the club without the amenities even after receiving a cease-and-desist order from the city’s building inspector. According to the city, both the course owner and the company that owns the buildings and parking lot were both in breach of the special permit.
Confused yet? The contract dispute forced the course owner to open the course, using the first fairway as a parking lot, regardless of the $100 daily fine for operating the golf course. The auction will continue as planned, but will only include the actual golf course, not the restaurant, club house or parking lot.
Until the lease, city permit and partner agreement gets ironed out, we don’t think there will be many bidders at the city auction.
Source: examiner.com, “Legal quagmire engulfs Boston golf course,” Emily Kay, April 11, 2012