The True Life Companies knew what it was getting when they bought the defunct Ahwatukee Lakes Golf Course and should not be let off the hook for rebuilding it just because they lost a gamble, the attorney for two homeowners told the Arizona Court of Appeals last week.
In a long-awaited rebuttal to True Life’s effort to overturn a Superior Court ruling that it must restore the 101-acre site, attorney Timothy Barnes detailed the history of the covenants, conditions and restrictions that have governed the site’s use since 1986.
And he took direct aim at True Life attorney Chris R. Baniszewski’s argument that forcing his client to restore a golf course would violate the 13th Constitutional Amendment that bans slavery.
“Willingly entering into a contract that could require operating a golf course is by no measure comparable to the practice of slavery that has scarred the Nation’s soul,” Barnes wrote. “To argue otherwise would be to obscure the history of slavery in this country and the point of the Thirteenth Amendment to end it.”
Barnes’ response to Baniszewski’s appeal brief marks the latest chapter in the long-running legal fight by homeowners Linda Swain and Eileen Breslin to force the restoration of the course, which was closed by Wilson Gee in 2013 and sold in 2015 to True Life for $9 million.
True Life put down $750,000, but Gee last fall regained title to the site after foreclosing on True Life, which reneged on paying the balance.
Nevertheless, before the trial on the homeowners’ suit in October 2017, True Life basically agreed to Gee’s dismissal from the lawsuit. So, the company is still subject to Judge John Hannah’s order requiring the course to be restored.
True Life has said its experts estimated it would cost as much as $16 million to restore the course, though Barnes’ experts at trial estimated the cost would be around $6 million.
True Life now has 20 days to respond to Barnes’ brief and then one or both parties must ask for oral argument before the court. The court is under no rigid timeline for setting the hearing. Moreover, either party has the option to ask the state Supreme Court to consider the case, although that court is under no obligation to accept the appeal.
Barnes notes testimony by several True Life officials in contending that the company always had the intention of using the golf course site for residential development.
He cited one official who said “there was ‘no chance’ defendant would build a stand-alone golf” and another who said True Life “went into the purchase of the golf course ‘with eyes wide open’ to the challenges it faced in its effort to obtain the property, so defendant could redevelop the property into a residential use.”
True Life waged a costly campaign for more than a year in an effort to get 51 percent of approximately 5,400 homeowners to agree to a change in the CC&Rs, but wound up with only about 2,000 signatures.
The company had proposed a development called Ahwatukee Farms, which would have included about 270 single and duplex houses, a five-acre farm, a new location for Desert Garden Montessori, a café and various amenities.
About six months before the trial, True Life switched gears, offering to build a “fun golf course” along with the homes.
Barnes noted that True Life Executive Vice President Aiden Barry had testified in the trial that the company agreed to the $9 million purchase price because it “was based on the value defendant placed on the golf course to redevelop the property into a residential community.”
“Because defendant did not intend to reconstruct and operate a stand-alone golf course on the golf course, the condition of the golf course when defendant purchased the golf course was not a material consideration from the defendant’s point of view,” Barnes stated.
He also disputed True Life’s attempt to persuade the judge that there had been “material changes” to the course warranting a change in the CC&Rs, stating the company bought the land “knowing if it lost the court battle, it could turn on its heel and walk away.”
Barnes said that Gee’s companies – including one named Bixby Village – had started to let the course fall into disarray long before its 2013 closure.
“The condition of the golf course progressively deteriorated between 2005 (one year after Bixby purchased the property) and 2017,” he wrote, citing photographs taken at various intervals over that time period. “Mr. Gee denied Bixby intentionally failed to maintain the course, but the photographic evidence contradicted his denial.”
Barnes argues that True Life gambled on getting homeowners’ approval to change the CC&Rs and that there was “indisputable” evidence the company considered the land-use regulations “superfluous and a mere hurdle to clear so TTLC could get on with the business of redeveloping the golf course.
He also noted that even the county recognized the CC&Rs’ iron-clad requirement for a golf course when it gave the Lakes a special tax exemption lowering its property taxes.
“The parties’ original intent was compliance with Arizona’s golf course valuation and taxation statutes,” Barnes wrote. “To qualify as such, the golf course must be capable of being used for ‘golfing or golfing practice by the public or by members and guests of a private club.’”
He also cites an appellate court decision involving a similar dispute over the use of the Shalimar Golf Course for residential development, saying that court “decided, in spite of the harsh economic realities of trying to run a golf course, a promise (even by implication) the community is benefited by a golf course must be upheld.”
He chided True Life for allowing conditions to further deteriorate, noting that the judge said “the golf course now looks like a ‘moonscape.’”
As for True Life’s claim that the reconstruction order imposed an economic hardship, Barnes wrote:
“TTLC was aware the former golf course had been closed and neglected to the point the golf course would have to be completely reconstructed. As the trial court found, because TTLC did not intend to reconstruct and operate a stand-alone golf course on the golf course, the condition of the golf course when it purchased the golf course was not a material consideration from TTLC’s point of view.
“TTLC purchased the Golf Course with a full understanding of what it was buying – namely a strong deed restriction and a pending lawsuit to enforce that deed restriction – and nonetheless decided to purchase the property betting on the opportunity for a development.”
“TTLC cannot say with any credibility a hardship has been imposed on it by reason of its own business decision to agree to pay $9 million and take on the issues in this action. That decision was a calculated roll of the dice gamble by TTLC – not a hardship imposed by the trial court or the 1992 CC&Rs.”