The City Hits a Nerve with New Plans for The Coral Gables Country Club
It was a rainy Thursday night in late September. But that did not stop nearly 500 residents from showing up for a “town hall” meeting in the ballroom of the Coral Gables Country Club on the Granada Golf Course. At issue: the city’s decision not to renew the lease for the current operators of the club, Canada-based Liberty Entertainment Group.
In the ballroom, participants listened to an hour-long defense by Liberty CEO Nick Di Donato, who called in from Toronto on Zoom. He presented a page-by-page refutation of the city’s case against his company’s management of the facility, the historic Country Club originally built by city-founder George Merrick in 1923.
After a standing ovation for Di Donato, angry residents stood in line to vent their opinions, starting with local attorney Manuel Fernandez, who declared, “This is a fix. You have to fight a fix!” Others followed, but the message was the same that one woman shouted: “We want to keep the Country Club as it is.”
At issue is whether the city has a legitimate argument to oust Liberty, which has operated the facility since it signed a ten- year lease in 2009, with options to renew for two more ten-year stints. During the early months of the pandemic, Liberty missed its April 2019 rent payment, and then another in July. That led to a deferment agreement for the rent (all of which has since been paid), along with a legal admission of default.
A year later, when Liberty’s contract was coming up for renewal, the city invoked a clause in the lease which stated that, if the tenant had been in default during the final two years of its lease, the city could cancel.
What followed was a series of negotiations. Di Donato – whose nephew Nick manages the club – says that, to avoid lawsuits, the Country Club needed another year to fulfill its gym memberships and a slew of planned events. The city agreed and extended the lease until April 2022 – but only in exchange for an agreement that Liberty would not pursue further legal actions.
City Manager Peter Iglesias says it was not just the default on rent that caused the city to sour on Liberty, but a list of grievances, including work that was done on the property without permits, property damage that was not reported in a timely fashion for insurance, and other companies registered at the property without authorization. Iglesias also says the facility was allowed to go into disrepair – despite receiving the Seal of the City in 2019 for maintaining the historic property, including investing $1 million in the gym. “The main thing,” says Iglesias, “is that they did not treat this as a country club, but just an event hall and a gym. That is not what George Merrick envisioned.”
That vision, of turning what is now a state-of-the art gym, an events destination, and a family friendly eatery (the Liberty Café) into something more upscale, was presented to the city by the Barreto Hospitality Group (BHG) in answer to an RFP (request for proposal) for the property. BHG, run by businessman Rodney Barreto, burst onto the Gables dining scene last year with its restoration of Redfish Grill, followed this year by Italian restaurant Forte. Barreto originally approached the Liberty group last fall with an offer to buy the leases for both the Country Club and what was then Cibo Wine Bar on Miracle Mile. Di Donato agreed to let Cibo go but turned down the Country Club offer.
That offer proposed creating a true country club, with paid members and a member’s restaurant, except with far lower entry fees than places like the Riviera Country Club. That proposal was turned down by the city, partly because it did not meet its requirement for an infusion of $4.5 million to repair structural damage and upgrade the facility.
Di Donato says he is the first to admit that the original lease was “a bad deal for the city, in the middle of a bad time,” simply because of its low base rent, which started at $20,000 a month (now $26,000 a month). But he says Liberty is open to renegotiate, an offer turned down by Iglesias, who says he would allow the city’s parks department to run the club rather than return it to Liberty.
The next phase in the saga will depend on whether there is enough community support to sway the city commission, as well as the results of a financial audit now underway of the facility’s finances in 2018 and 2019. The city believes that the second part of the rent, a percentage of income, may have been underpaid, yet another grievance. There is also contention over whether the city, or the tenant, is responsible for maintaining the structural integrity of the facility, such as its roof.
In the end, Di Donato believes the community does not want a new, bustling facility in the middle of a residential neighborhood, or another upscale restaurant, but rather a gym, a pool, an inexpensive café, and a place to hold weddings and small events. The city says that, regardless of the future, Liberty won’t be part of it. Stay tuned.