Healdsburg is handing over operation of Villa Chanticleer in the hopes of cutting its losses and ensuring the future of a thriving community gathering place.

The City Council this week approved a lease agreement with Tayman Park Golf Group to take over the Villa’s management and operation.

“I’m very excited about that,” Mayor Jim Wood said Wednesday. “I think they will do a great job.”

Perched on Fitch Mountain, the Villa for generations has been the site of weddings, school proms, banquets, meetings and small conferences.

The original Villa Chanticleer dates back to 1910, when it was established as a resort for the French population of San Francisco, according to the Healdsburg Chamber of Commerce and Visitors Center.

The property changed hands a number of times before it was acquired by the city in 1955.

Over the past half-dozen years, the Villa has racked up $586,000 in losses for the city — an annual average deficit of almost $98,000 through 2013.

The city concluded the best way to keep it a viable community and special-event center was to privatize the operation.

“The reality is a private entity is a lot more nimble and can react more quickly with that type of endeavor,” Assistant City Manager David Mickaelian said Wednesday.

The Tayman Park Golf Group, the same company that has run the city’s golf course for the past 15 years, was one of two companies that applied for the contract. The other applicant was United Camps, Conferences and Retreats.

Under the agreement reached this week, the contract will run for five years, with options to extend it for three successive five-year terms.

Discounts on rental rates will be provided for local residents and nonprofit groups.

The Tayman group gets to keep all revenues up to $300,000 each year, but must spend at least $150,000 annually for maintenance. With revenues between $300,000 and $530,000, the city gets 70 percent of those monies, but after $530,000, the private operator gets to keep more.

The American Legion will continue to have a liquor license there, but limit its activities to the Villa annex, through 2027.

The Tayman group is expected to take over the Villa Chanticleer by Sept. 1.

You can reach Staff Writer Clark Mason at 521-5214 or clark.mason@pressdemocrat.com.