Stating that it could take as long as three years for the courts to resolve the legal fight over the future of the Ahwatukee Lakes Golf Course, owner Wilson Gee last week made a surprise offer to his opponents – offering to share potentially millions of dollars in profits if they allow him to sell the land to a homebuilder.
The offer was promptly rejected by Lakes residents Eileen Breslin and Linda Swain, who are suing to have the 101-acre site restored as a golf course.
In an email to the two plaintiffs, Save the Lakes and the Ahwatukee Board of Management, Gee said he could possibly reap between $20 million and $25 million by selling the site to a homebuilder if the land use restrictions requiring a golf course were lifted.
In return, he promised to pay all legal fees incurred by Breslin, Swain and Save the Lakes as well as give Swain and Breslin each 1 percent of the profits and 18 percent to ABM for any community improvements that the umbrella HOA and its member homeowners associations want to make.
“My clients have rejected the offer,” said attorney Tim Barnes, who is representing Swain and Breslin.
Gee did not appear surprised by the reaction in an interview Monday with AFN.
“They want to go through the whole court process,” said Gee, who regained ownership of the site that he closed in 2013 after foreclosing on The True Life Companies when it walked away from paying nearly $9 million it had agreed to spend on buying the land.
True Life, which is still the primary defendant in the suit by Swain and Breslin, wanted to build about 270 homes in what it initially envisioned as an “agrihood” with a five-acre farm, private school and amenities.
And Gee in his offer insisted that houses were the only future for the defunct golf course.
The hang-up remains over the covenants, conditions and restrictions that are central to Superior Court Judge John Hannah’s January 2018 ruling that the land can only be used for a golf course.
To change those restrictions, 51 percent of the Lakes’ approximate 5,400 homeowners must agree to the change – something that True Life spent hundreds of thousands of dollars over two years trying to accomplish through an aggressive campaign. It is believed it fell at least several hundred votes short.
Although Gee’s offer noted that “currently, if the golf course restriction is lifted with 51 percent of Ahwatukee voters, the property would revert back to the underlying zoning, permitting 133 lots,” he added that the cost of prepping the land for housing would probably require far more homes for a builder to find the venture profitable.
The CC&Rs dictate how the land must be used, but it is zoned for single-family residences.
Gee’s offer said that 133 homes “may not be feasible, since the infrastructure cost of streets, water, sewer, and development fees” likely could only be covered by far more. While his offer did not say how many more houses would be needed, he noted that the density in adjacent HOAs is 5.5 homes per acre.
“I’m not asking for anything,” he told AFN. “Density is up to the community. There is no project right now. The only thing I wanted to do was resolve the court case. If I prevail on an appeal, they have a lot of attorney fees to pay. It has to be between $500,000 and $1 million. Maybe they can afford it, but that’s a lot of money.”
Gee said he considered his proposal “a fair and reasonable offer” that also would contain a benefit for the community at large, since BM and its associated HOAs could stand to reap millions. “They could determine how to spend it for the betterment of the whole community,” he said.
Swain, Breslin and Save the Lakes President Jeff Hall did not return a request for comment and Barnes declined further comment.
Gee sent his offer to ABM as well as several HOA management companies along with Save the Lakes and the two plaintiffs in the suit against him
“Our attorneys have given us a time frame of two to three years before we can finally come to a conclusion, one way or another,” he said.
The case is before the Arizona Court of Appeals, which is not expected to even hear arguments until sometime this summer and is under no time restrictions for issuing a decision. Moreover, the losing party can ask the state Supreme Court to consider the case, and while it is not obliged to hear it, just deciding whether it wants to can take a long time.
Gee called his offer an effort to “find common ground and a solution that everyone can live with” and stressed “this proposal is based on the successful sale of the property to a third-party homebuilder.”
“Once the property is sold, all costs will be deducted from the sales price. Included in the costs will be the original purchase price of the property, the property tax penalty, property taxes past and present, maintenance, operational losses, and closing costs of the sale,” Gee said, adding that his company “will also deduct from the sales price 100 percent of the legal fees incurred by both Ms. Swain/Ms. Breslin” and any other parties as well as “100 percent of the expenses of the Save the Lakes group.”
Gee estimated those combined costs “will be between $9 million to $10 million.”
Once those costs are paid, Gee offered to take 20 percent off his profit margin and pay Breslin and Swain 1 percent each and 18 percent to ABM for distribution to other HOAs as it saw fit.
The offer also sought to assure the parties that “important will be the zoning restrictions, concerning setbacks and landscaped open space. The community will have a say in that as well. Homes can also be offered to Ahwatukee residents first before a public sale.
“The legal process will continue and work itself through the courts,” he added. “I am hoping this proposal can start a new dialog between us and the community to find a common ground and equitable solution for all parties.”
Gee told AFN that his advisors’ estimate on what he could get for the golf course site was based on what Tempe Union High School District earned for selling a 62-acre parcel at the corner of Desert Foothills Parkway and Frye Road.
Tempe Union was paid $23.04 million by Desert Vista 100, a subsidiary of Blandford Homes, and the developer plans to build 197 homes on that site.
Gee also said that he remains hopeful on the lawsuit against him and True Life, which remains a party to the case even though it essentially walked away from the Lakes deal.
“They’re trying to force me to build a golf course. That’s a violation of the 13th Amendment. They’re trying to force me to work for free,” he said, referring to True Life’s assertion on appeal that the U.S. Constitution prevents a judge from ordering him to do something with the land that is economically unfeasible.
One of the points of disagreement in the long-running Lakes legal case is whether a golf course can be profitable and how much it would cost to restore the barren site.
Breslin and Swain contend there are golf course developers who can restore it for about $6 million – less than half the estimated cost of restoration that True Life’s experts have said it would cost. They also claim the course can be run profitably despite the waning interest in golf nationally.
Gee noted that so far he has no takers on another Ahwatukee course he’s selling.
“I’ve had Club West on the market for almost two months and it hasn’t sold,” he said.