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Valley Hi Golf Course contractor accuses city of favoritism in federal court

Out of bounds


Mike Northern believes he was wronged by the city. - PAM ZUBECK
  • Pam Zubeck
  • Mike Northern believes he was wronged by the city.

The longtime operator of a Colorado Springs golf course was railroaded out of his contract by city officials who showed favoritism to another vendor and ignored allegations of wrongdoing against that vendor.

Those are allegations contained in a newly filed lawsuit against the city by golf professional Mike Northern and his company, Northern Golf Inc., which ran the Valley Hi Golf Course from 1994 through 2014.

Discriminatory treatment of Northern Golf resulted in the city picking GIMMIE Golf to run Valley Hi, the lawsuit alleges, though Northern alerted the city GIMMIE Golf wasn't following rules in collecting revenue.

The federal case, filed in May, alleges the city's unequal treatment of Northern deprived him of a property interest without due process, in violation of his constitutional rights.

"The citizens of Colorado Springs should be concerned," Northern's attorney Andrew Swann tells the Independent via email, "when the City picks winners and losers on the basis of favoritism rather than competence and performance."

The city's answer, filed earlier this month, denies the allegations.

City golf manager Dal Lockwood, who left the city last year, favored GIMMIE Golf, which runs city-owned Patty Jewett Golf Course where Lockwood officed. Lockwood approved improvements at Patty Jewett, but not at Valley Hi, the lawsuit says. Also, years before GIMMIE's contract was due for renewal, Lockwood maneuvered a five-year extension without competitive bidding in violation of city policies, the lawsuit says. The Independent obtained documents showing Lockwood successfully lobbied city procurement officials in 2010 to renew GIMMIE's contract, which was to expire without any renewal terms on Dec. 31, 2013. Lockwood's change extended GIMMIE's contract until Dec. 31, 2018. Bids were not solicited or considered.

In exchange, GIMMIE agreed to fund a remodel of the Patty Jewett pro shop. While GIMMIE Golf told Lockwood in a March 23, 2011, letter the project cost $21,069, the building permit value for the project as shown in Pikes Peak Regional Building Department records was $3,000. "It's possible there were costs associated with the project that were not subject to [the] permit," Regional Building Official Roger Lovells says via email.

Pitching the deal, Lockwood says in an email to city procurement, "I personally think this is a good and equitable arrangement as their performance has been good."

But GIMMIE's performance was far from good, according to Northern, who called the city's attention to cart rental data that suggested GIMMIE had not collected fees as required.

The lawsuit notes that in 2011, GIMMIE Golf collected $214,587 in golf-cart revenue at the 27-hole Patty Jewett, an average of $1.93 per round. In comparison, the 18-hole Valley Hi collected $208,587 in cart rentals, or $3.38 per round of golf that year, 75 percent more per round than GIMMIE Golf collected, the lawsuit says.

Moreover, Northern gave Lockwood "unequivocal evidence," the lawsuit says, GIMMIE allowed players to play at discounted rates not authorized by the city. The lost cart rentals and unpaid golf rounds cost the city "hundreds of thousands of dollars in lost revenue," the lawsuit says.

After Northern reported the discrepancy, coinciding with a 2012 city audit, GIMMIE cart rentals increased by 39 percent, records obtained via an open-records request show.

Nothing came of Northern's complaint, and instead, what the lawsuit calls a "flim flam investigation" resulted in Northern being issued a "cure notice" in 2012 for a deficiency in collecting $356.75 related to staffers not paying to play golf and other issues. Northern promptly paid the money. No such notice was issued to GIMMIE Golf, and Lockwood continued to invest city money in Patty Jewett while rejecting proposed Valley Hi projects. That, Northern told the Indy in interviews in late 2014, led to declining revenue from Valley Hi due to course conditions.

Data provided to the Indy via records requests show Patty Jewettt's total fee revenue declined from 2010 to 2014 by 7 percent to $1.45 million, while Valley Hi revenue sunk during that period by 11 percent to $739,000.

In April 2014, the city sought bids for the Valley Hi contract, due to expire at the end of 2014, and chose GIMMIE Golf over Northern for the five-year deal. In a June 2014 letter, purchasing manager Curt DeCapite noted that GIMMIE was the unanimous choice by a panel of evaluators comprised of two city golf employees, one Parks Department representative and two citizens — a retired manager and a frequent golfer. They gave GIMMIE 469 points and Northern 344, based on various factors. DeCapite's letter cited GIMMIE's "exemplary contract compliance audits."

In January 2015, the city said the contract was rebid because "the City had exhausted all of its renewal options with Northern Golf, Inc." (The GIMMIE contract also contained no renewal options beyond 2013 but wasn't rebid, records show.)

Northern's efforts to expose unfair treatment were, the lawsuit says, "swept under the rug and dismissed." He filed a complaint with then-Chief of Staff Steve Cox, who wrote in a Sept. 5, 2014, letter to Northern that the procurement process "was followed appropriately" and that he found no grounds to overturn the award. The city denied the Indy's request for Cox's investigation report.

Northern filed an ethics complaint against Lockwood on Oct. 14, 2014, which was referred to the city's Human Resources Dept. HR Director Mike Sullivan's Dec. 8, 2014, letter to Northern states the city cleared Lockwood.

Northern now teaches lessons at Springs Ranch Golf Club and competes in Colorado pro events. Lockwood retired in April 2015 after 28 years with the city, and since GIMMIE took over Valley Hi, the city "has authorized much-needed repairs," the lawsuit says.

The city declined to comment, citing litigation. Bill Martin, one of three GIMMIE Golf managing partners, also declined to comment.

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