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Court puts new Madrona Links operator on hold

PenMet Parks’ attempt to switch Madrona Links Golf Course operators has been interrupted.

The park district intended to replace Gig Harbor firm Stutsman Enterprise with industry giant Troon Golf Course Management on Sept. 1. However, a Pierce County Superior Court judge on Aug. 21 granted Stutsman a temporary restraining order to sidestep its removal.

At the next hearing, on Sept. 5, Stutsman’s attorneys will ask the court to upgrade the short-term restraining order to a preliminary injunction that will remain in place until the parties settle or a judgment is entered.

“The new transition date is not known,” PenMet Executive Director Ally Bujacich said during a special meeting Aug. 26.

A woman practices her iron shots Sunday at Madrona Links. Photo by Ed Friedrich

Stutsman has been managing Madrona Links since Jan. 1, 2014, under a sublease with master leaseholder Tyson Limited Partnership. Stutsman paid rent to Tyson of 10% of green fees and to PenMet of 7-8%, according to court documents. The lease ends April 1, 2028.

Course owner PenMet terminated Tyson’s lease on Oct. 18, 2024, after three default notices for failing to perform deferred maintenance, park district attorneys stated. Sought improvements included removing trees, cart path repair, fairway drainage, tee box upgrades, fairway grading and aerification, and enhancing bunkers and ponds.

Dispute over deferred maintenance

PenMet, which took over Tyson’s lease, informed Stutsman Jan. 14, that the company must correct the deficiencies, according to its attorneys. Stutsman claimed the lease only required it to water and mow the golf course and invest 1.5% of green fees into capital improvements, which its lawyers said it exceeded. PenMet and Tyson were obligated to perform any other deferred maintenance or capital improvements, the attorneys stated.

The leases, dispute history, FAQs and other documents can be viewed here.

PenMet attorneys said the park district informed Stutsman in January it was soliciting proposals for a new course operator. The park district received a letter from Stutsman on Jan. 15 requesting a slow transition instead of an abrupt course shutdown. Stutsman asked that its workers be retained and implied that the new operator could buy its golf course equipment, according to PenMet attorneys.

Madrona Links layout display with sponsors. Photo by Ed Friedrich

“I really hope that we can work together on this and make this as smooth as possible,” Stutsman ended the letter, which was exhibited in court.

PenMet agreed to the request and said it would assume Stutsman’s sublease during the transition period.

PenMet contracted with Troon on July 10 to take over Madrona Links operations Sept. 1.

Stutsman wants to be bought out

Stutsman’s attorneys advised on Aug. 4 that the firm would work to ensure an orderly transition to Troon if Stutsman’s lease is bought out, PenMet attorneys stated. Otherwise, it would continue to manage the course until its lease expires in 2028.

PenMet attorneys responded on Aug. 13 that the park district has no interest in buying out Stutsman’s lease and it considers Stutsman in default for refusing to perform the deferred maintenance. If Stutsman refuses to leave, they said the park district will seek a court order to have the firm removed.

Stutsman countered that it had done the required course upkeep and PenMet breached the lease by hiring Troon. It is asking the court to keep PenMet from interfering with Stutsman’s operations until the lawsuit plays out or the lease ends in 2028.

A foursome putting on a Madrona Links green Sunday. Photo by Ed Friedrich

PenMet began soliciting proposals in December 2024 from firms providing golf course management and operations services to Washington municipalities. It received four written proposals. A selection committee evaluated them, interviewed each firm and ranked Troon Golf as the best on price and qualifications, it said.

The contract is for three years until the existing lease expires. Then PenMet plans to sign a new full-service management agreement or comprehensive golf property lease.

PenMet would pay Troon differently

Instead of splitting green fees, PenMet will keep all revenue from the golf course and pay all expenses to operate it. Troon will earn a base management fee of $77,000 and professional services fee of $25,000 per year. The firm will also receive $5,000 for each month it provides consulting services, plus a possible incentive fee. The full agreement is included in PenMet’s July 1 board meeting agenda packet.

PenMet was interested in buying Stutsman’s course maintenance equipment. After it became unavailable, the park district and Troon determined purchasing new machines takes too long (12-24 months) and is too expensive. Used ones cost half as much and can be delivered in 8-10 weeks.

Golfers playing a round Sunday at Madrona Links. Photo by Ed Friedrich

It found only one suitable package coming available, at Toro’s Turf Star Western dealer. It isn’t expected to remain on the market for long. So PenMet called a special meeting Aug. 26 to authorize Executive Director Bujacich to make a sole-source purchase and waive a competitive bidding requirement. Board members voted 4-0 to approve.

The package includes four mowers, an aerator, greens roller, turf sprayer and three utility vehicles. PenMet will lease them for about $12,547.50 per month for three years, or about $452,000. The payments will come from golf course revenue.

Gig Harbor resident Randy Boss said during the public comment period he “vehemently opposes” the move.

“Why didn’t Troon bring their own equipment instead of you, us, having to pay $400,000 for equipment that isn’t even going to be ours?” he asked. Stutsman is in default. Kick it out and take its equipment, he said.

Part of an earlier lawsuit

The PenMet-Stutsman dispute is part of a previous case scheduled to go to court Jan. 27, 2026. ZTM Holdings, which owns 14 of the 94 acres upon which Madrona Links sits, and Tyson filed a lawsuit against PenMet and Stutsman on Jan. 21. The lawsuit states, among other things, that PenMet and Stutsman have had no right to occupy ZTM’s 14 acres and owe rent.

ZTM bought the property from Tyson in December 2023 for $1 million. PenMet had the land appraised at $2.5 million and offered that amount, but ZTM declined. The park board gave staff the authority to pursue the acreage through eminent domain, but it hasn’t proceeded, still hoping to reach a deal.