A creative proposal to merge the Mendocino Sports Club into the Mendocino Coast Recreation and Park District died just two weeks after coming to light.
“Mr. [Larry] Hinson has withdrawn his proposal to consolidate his Mendocino Sports Club with the Mendocino Coast Recreation and Park District,” said Jim Hurst, MCRPD executive director wrote in a press release.
“The MCRPD board wishes to express its appreciation to Larry for bringing this opportunity to the district for consideration and for the time, effort and spirit of cooperation that he put into the negotiations. We wish him the best for his future plans.
Hinson had offered to merge Mendocino Sports Club on Highway 1 with the district and facilitate the transfer of his equipment and its 550 members to MCRPD, an innovative deal resembling the sale of a business in the private world. The deal, kept under wraps from its initiation discussions in December, was revealed to the public and full board at the March 16 meeting. According to the proposal, the district would have paid Hinson $100,000 for the workout and other equipment in two payments this year. MCRPD would also have paid Hinson half the revenues C.V. Starr Center would make above its base income of $375,000 annually, with a maximum payment to Hinson of $275,000, according to the plan hashed out between Hurst and Hinson. Also part of the deal was that Hinson would work as a consultant for nine months.
The proposal got both positive and negative reactions at the March 16 board meeting when it was announced.
Hinson said the club would remain open, running as it had been. He declined to comment on the reasons the consolidation plan didn”t work out. The MCRPD press release also didn”t provide a reason.
March 16 meeting
The MCRPD board voted to hold a special meeting on Wednesday, March 30 (which has now been canceled) to officially discuss the distinctive business deal. The audience suggested that public meetings be held before any decision is made.
Dr. Peter Glusker praised Hinson”s three decades of local work as a physical therapist, but wasn”t ready to support the deal or the numbers.
“I have some misgivings … Mr. Hinson stands to gain a good deal more than the Starr Center,” said Glusker. He brought up gaps between anticipated revenues and actual revenues and asked the district”s financial committee to put the deal under real scrutiny.
Mara Thomas asked where the district was going to get the first $50,000 due July 1 and the final $50,000 due by the end of 2011, when the district owes a $90,000 payment on the golf course lands.
“The expectation is the bulk of that money will come out of increased revenues that will be generated,” said Hurst. “We are trying to resolve ways not to have the May/June $90,000 payment on the land … We have informed the bank … that we need to move that payment to when the land is sold,” said Hurst.
The district is trying to sell the site it once planned as a golf course to the City of Fort Bragg. The district will put the land on the market if that doesn”t work out in the next two months. Glusker suggested a parallel process be set up with the Mendocino Land Trust and/or other groups, which might also want to buy the land for a conversation/public purpose similar to that of the City.
Hurst insisted the move was not an acquisition, nor a merger, but a “consolidation” of entities.
“The deal is structured so that Hinson”s compensation will be based on how successful [he] is at attracting [the members of the closed Highway 1 business],” said Hurst.
Hinson said even if he manages to bring the Mendocino Sports Club membership into the fold, and the districts” gross revenue declines for other reasons, he doesn”t get the payments for increasing revenue.
The district hopes the consolidation could mean a net increase of $10,000 per month; at the end of two years, it could mean up to $30,000 per month.
Hurst said a big reason the district is in such financial trouble is that original plans for physical therapy at C.V. Starr Center with the hospital fell through.
Brenda Ross, representing the hospital, said a state authorization that any therapy services are within privacy and quality standards “are the hoop we are trying to get through.” Ross said the hospital still wants to use the Center for water therapy services.
Hurst said this deal does not close the door on also working with the hospital.
The deal may have been the best-kept secret in Fort Bragg. Hinson said the three months the matter stayed mostly silent might be a record for his small town.
MCRPD Board member Cesar Yanez said the first reaction he had gotten was negative from people wondering why it was done behind closed doors.
“I tell them, Whoa, we haven”t even talked about this as a board yet.””
Hurst said in order to comply with the Brown Act, he met with only a two-member board committee, composed of Chairman Yeomans and Harold Sipila.
“This was very important, because we are a public agency, that we not violate that responsibility [not to do business as a board behind closed doors] …” Now we are in pubic arena, now we have to be inclusive,” said Hurst.
Gloria Liner, who was honored at the outset of the meeting with a special plaque and 2010 Service Award for the Mendocino Children”s Fund, had some advice.
“You need more partners,” Liner said, listing schools and community organizations in other areas of the Mendocino Coast.
Liner encouraged the board to remember its larger geographical area and encouraged MCRPD to hold several community meetings and give the members of the closing club a real chance to be part of the design changes needed to attract them.
Email Frank Hartzell at frankhartzell@gmail.com.
