Lawyer: True Life not active in Lakes case

Lawyer: True Life not active in Lakes case

The True Life Companies may still be a party in the long-running litigation involving the future of the Ahwatukee Lakes Golf Course, but a lawyer for the developer says his client is not “directing or participating the pending litigation.”

In a letter to AFN last week, Attorney David E. Shein said it is “factually inaccurate” to say either True Life or TTLC Ahwatukee Lakes Investors, a subsidiary, has any interest in the course even though it continues to be a party in the case, which comes up for argument May 22 before the Arizona Court of Appeals.

Although True Life appears as a named party in the case, as does course owner Wilson Gee’s Bixby Village Golf Course Inc., Shein said that after a Sept. 20 trustee sale by Gee, “the entire Ahwatukee Lakes Golf Course property was transferred to ALCR LLC.”

Gee held the sale after True Life failed to pay the approximate $8 million note it signed when it bought the course in 2015.

“Neither TTLC nor TTLC Ahwatukee hold any direct or indirect ownership or management interests in ALCR and neither TTLC nor TTLC Ahwatukee hold any direct or indirect ownership of management interests in the Ahwatukee Lakes Golf Course Property,” he wrote, adding:

“As an additional matter, neither TTLC nor TTLC Ahwatukee are directing the pending litigation or hold any direct or contingent interest in the outcome of the pending litigation.”

Arizona Corporation Commission records show that ALCR filed as a limited liability corporation last August and that it lists four companies as owners, including Ahwatukee Golf Properties, LLC and Nectar Investment LLC as managers and Hiro Investment LLC and Kwang Co. LLC as other members.

All four of those companies list their address as Pasadena, California, although Ahwatukee Golf Properties also listed a Phoenix address when it filed with the Corporation Commission in 2016.

Shein’s letter apparently means that responsibility for the outcome of the lawsuit by Lakes residents Eileen Breslin and Linda Swain will fall directly or indirectly to Gee — who has repeatedly told AFN the 101-acre site will never be a golf course again.

The Arizona Court of Appeals on May 22 will hear oral arguments on Superior Court Judge John Hannah’s January 2018 ruling that the covenants, conditions and restrictions governing the site allow for it to be used only as a golf course.

Swain and Breslin want the owners to restore the 18-hole executive course, which was closed by Gee in 2013 after he said it was no longer profitable.

True Life bought it in the hopes of creating an “agrihood” with about 270 single and two-family homes, a five-acre farm, a new school for Desert Garden Montessori and other amenities.

But it failed to get enough of the 5,600 Lakes homeowners to agree to change the CC&Rs that would have allowed that to happen.

Expert witnesses during a non-jury trial in fall 2017 before Hannah differed on the cost of the course’s restoration. Swain’s and Breslin’s experts said it would cost about $6 million and True Life’s experts said it would cost more than twice that amount.

Swain and Breslin also contend that the golf course was designed to prevent runoff from South Mountain from flooding the area after a heavy rain. During its campaign for homeowners’ assent to changing the CC&Rs, True Life presented its own hydrology experts who said they had a different plan for controlling runoff that would be just as effective.

The city says True Life owes $165,000 in fines for code violations filed by inspectors for failing to keep the golf course site clear of debris.

Gee has maintained there was a reason for closing the course in the first place: that the golf industry is dying and that Ahwatukee Lakes Golf Course had been losing money for several years.

The plaintiffs’ experts disputed that assertion, saying that not only is the industry slowly coming back but that Ahwatukee Lakes was operated poorly under Gee and that it can be revived to run profitably.

Earlier this year, Gee offered to pay all the legal costs of Save the Lakes, Swain and Breslin, give the two plaintiffs 1 percent of any profit from selling the land and hand over 18 percent of the profit to the Ahwatukee Board of Management for projects that would benefit the community.

In return, he wanted the lawsuit dropped.

That offer was rejected by Swain and Breslin.

The argument before the appellate court likely will involve less about golf and more about the law.

One of the arguments laid out by attorney Chris R. Baniszewski in his initial brief to the court is that forcing the landowner to restore the course is a violation of the 13th Amendment of the U. S. Constitution, which prohibits involuntary servitude.

“Because a contract for personal services cannot be specifically enforced, the court cannot enjoin (his client) and require it to operate a business on the property,” he wrote.

He also argued that “the only realistic funding mechanism for a new golf course on the property is for a new golf course to be built in conjunction with a new home development” and urged the court to vacate both Hannah’s order and the deed restriction that prevents housing construction on the site.

In a subsequent brief, Baniszewski called the notion of restoring the course without the houses “is nothing but a pipe dream.”

“The overwhelming evidence presented in the case, even based upon (the homeowners’) own expert’s analysis, shows that the property will never again be a stand-alone golf course,” he wrote, contending that the case “goes far beyond the fact that a golf course on the property will not be profitable.”

Attorney Tim Barnes has disputed those contentions.

He said the CC&Rs are virtually ironclad and that they were written to ensure that the golf course would remain viable.

Barnes in his brief to the appellate court said the “open-ended breadth of scope” of Beniszewski’s argument “is contrary to Arizona law.”

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