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March 20. 2014 11:08PM

Derryfield seeking OK to expand, make changes

MANCHESTER — The managers of the Derryfield restaurant and clubhouse want to alter their lease with the city and make changes to the facility that could include expanding a parking lot at the site of a popular sledding area.

The proposed changes were outlined on Tuesday before a joint meeting of aldermen’s administration and lands and buildings committees. Several aldermen, however, had a wary response, not least because the Derryfield Country Club has been a perennial drain on the city’s finances.

The parking lot expansion was one of four “investments” the restaurant’s managers company proposed, as part of a larger proposal to alter a schedule of increases set to go into effect over the remaining 15 years of its lease.

But for Alderman-At-Large Dan O’Neil, chairman of the Board of Aldermen, expanding the north parking lot was “a deal breaker.”

“I don’t believe expanding parking helps the golfer, it might help the restaurant,” he said. “This is the prime recreation area in Manchester. It has been a sledding area since I was a kid.”

Mayor Ted Gatsas said he hasn’t had a chance to closely review the proposal, but he didn’t think expanding the parking lot would necessarily come at expense of sledding. “I don’t think it takes sledding away. It probably opens more parking for more sledding,” he said.

The expansion of the parking lot, which is about 200 feet north of the facility’s main parking lot, could add 73 parking spaces, according to a letter to the mayor and aldermen from Mike Lanoie and Bill LaBerge, the principals of the Derryfield’s management company, BLL Restaurant, Inc. Limited parking, the letter notes, has led to “the loss of function business and restaurant/deck business.”

Expanding the parking lot could generate an additional $200,000 annually, which would result in $2,000 for the city under its revenue sharing agreement with the restaurant.

The other proposed improvements are a snack shack next to the 10th tee, remodeling the bathrooms, and extending the restaurant’s deck.

The management company would fund the improvements, while seeking to blunt the potential impact of annual increases in payments to the city that are set to go into effect this year.

The original agreement, signed in December of 2002, calls for the annual payment to the city to increase after the tenth year of the lease, by either the rise in the Consumer Price Index (CPI) or 5 percent, whichever is smaller. The company currently pays the city $127,000 a year.

The Derryfield managers are proposing instead to negotiate increases of 4 to 6 percent to be paid three times over the remaining 15 years of the lease.

Roy Tilsely, counsel for the company, told aldermen that based on the current average CPI of 2 percent, the arrangement would “even out.”

Several aldermen, however, pressed Tilsely to explain how such a deal would benefit the city.

“As we make improvements, that will lead to an increase in revenue, and because we share that revenue with the city, that will lead to increases in revenue to the city,” Tilsely said. “The facility benefits by having a strong management that is dedicated to staying there.”

The Derryfield, one of only three municipally owned golf courses in the state, is a city enterprise fund; theoretically, its revenues are supposed to fund operations. But things haven’t worked this way, and the entire Derryfield Country Club, including the course, has operated at a loss for the city over the past several years. The city has taken on $6 million in debt to fund its three enterprise operations.

Ward 3 Alderman Pat Long indicated that the proposed lease modification would improve this situation.
 
 
“I know it’s not a sweetheart deal for the city,” he said. “I do know our parks and recreation departments are in the red. ... I’m not convinced this CPI redo is going to even break even.”




tsiefer@unionleader.com


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