Country club aims to recover

CITY HALL — In December, Glendale Water & Power officials issued a statement celebrating the completion of a two-year, $30-million replacement of the Chevy Chase Reservoir.

The statement, which announced an official groundbreaking ceremony, lauded the project’s on-time completion, including the reconfiguration of Chevy Chase Country Club, which lies above the massive reservoir.

Two days later, flooding ravaged the golf course.

The forecasted storm caused a natural stream near the course to overflow, sending water and debris rushing onto the green, tearing out much of the newly laid sod covering the reservoir and damaging the irrigation system. Later, more sod was ripped out as city crews worked to stop the flooding.

“It was trashed,” said Kyle Marshall, the golf course superintendent. “All that green grass that you see now was all leaves and cans. The sod was gone. It all washed downstream.”

That damage dealt a major setback in the city’s efforts to restore the golf course to playable condition by Dec. 31, 2009, as required by a $2.1-million settlement between the city and country club. Project managers ultimately missed the deadline — sending city and country club officials back to the bargaining table.

The city ultimately agreed to pay the country club an additional $400,000 to cover the remaining landscaping work, which the club agreed to oversee, under a second settlement agreement finalized in March. Hole No. 5, out of commission for more than two years during construction, finally reopened earlier this month.

Club officials argued that the golf course issues stemmed from more than the storm damage, citing that the subcontractor chosen for the landscaping work had no prior golf course experience and was not doing timely or adequate work.

“We agreed to take over the project, notwithstanding the liabilities and the risks involved, just because we were in a position where it affected our business,” said Robert Ahn, a managing member of Chase Oak, the club’s new owner. “We were losing members. Members weren’t generally happy with the course condition.”

At the same time, the city recently awarded SEMA with a $500,000 contractually obligated bonus payment for completing the reservoir on time, despite the delays on the golf course re-landscaping.

Peter Kavounas, Glendale Water & Power assistant general manager, said the bonus payment was tied to the reservoir itself being operational by last summer.

“We felt it was really worth the bonus payment to the contractor so we would not have a second summer without fire protection,” he said.

Kavounas said that even with the contract change-orders, bonus payment and additional settlement with the country club, the project has stayed more than $1 million below its total budget of about $32 million. In addition to the $21.5 million in construction costs and settlement costs, other costs included design and management fees.

The storm damage and ensuing legal issues are the last in a string of hurdles that plagued the project, one of the largest in utility history, since city engineers determined the reservoir, built in the 1920s, was in desperate need of replacement.

First, the country club protested, arguing the project would dramatically affect its business. That led to the $2.1 million settlement to allow the utility construction access.

Then, unexpected groundwater caused project delays, leading to overtime costs in order to make up for lost time. And when the project was near completion, the rain hit.

Now, city officials say they are looking forward to the project’s ultimate completion, while the country club — now under new ownership after the former owner filed bankruptcy — looks to rebuild.

Nearby homeowners who have long said their property values are tied to the health of the Country Club are also hoping for a successful rebuilding process.

“The hope is that the club can come back,” said Larry Varnes, president of the Chevy Chase Estates Homeowners Assn. and a member of the country club. “During the period of financial difficulties and the reservoir construction, membership unfortunately continued to decline, but we are hoping that indeed the club can become the jewel of the canyon that it has traditionally been for so many years.”

In the past week, city crews have been out finishing up remaining work. At the same time, city officials are in talks with the reservoir’s builder, SEMA Construction, to iron out responsibility for the overtime costs related to the storm damage.

Kavounas said the talks were typical in the “life of any contract,” especially one as large as the $21.5 million contract with SEMA.

“In this case, we did have the storm damage,” Kavounas said. “We need to sort out who is responsible. We certainly don’t want the city to be stuck with any costs that aren’t the city’s.”

Meanwhile, country club officials say they are ready to move forward and rebuild from several years of dwindling membership.

The new owner, Chase Oak Co., had owned the rights to a $5-million loan given to the club’s former owner, JJ Lee Management Co., which defaulted on payments in 2008, and filed for Chapter 11 bankruptcy protection in June, according to court records. Chase Oak foreclosed on the property Nov. 20 after a federal judge removed a stay blocking the action.

While the club had more than 300 members prior to construction, members regularly paying dues were down to 220 last year, according to bankruptcy court filings.

In an effort to bring in new members, club officials are planning a membership drive and grand reopening event this summer to unveil a series of course improvements and renovations. Most importantly, officials want to unveil Hole No. 5, now playable after several years.

“Now that that’s behind us, although it’s not perfect, at least we are in a position where we can actually show the course to the public,” Ahn said.

As for Marshall, who has watched the project through all phases, he says he is glad the whole process is coming to a close.

“They came in here thinking it was going to be easy to put back a golf course and make the place whole again,” he said. “I think they realized that maybe next time they’ve got to redo the reservoir, they’re not going to do it on the golf course. It’s not that easy.”