An attorney representing victorious homeowners plans to seek an injunction ordering a developer to restore the decimated Ahwatukee Lakes Golf Course.
After scoring a hole-in-one with a critical state Superior Court ruling last week, attorney Tim Barnes said he will seek the injunction to return an eyesore that has plagued Ahwatukee since 2013 to lush green fairways.
But that effort faces several hurdles, including a possible foreclosure, that could sidetrack this dream.
The dream became more realistic, however, after Maricopa County Superior Court Judge John Hannah issued a scathing ruling in favor of Linda Swain and other Ahwatukee Lakes homeowners, rejecting developer True Life Companies’ effort to build as many as 270 homes on the defunct 18-hole course.
True Life had argued that a decline in the golf industry represented a “material change’’ that should allow relief from deed restrictions requiring the 101-acre site to remain a golf course.
True Life and previous owner Wilson Gee chose to ignore those restrictions – and Hannah criticized them in his lengthy opinion.
Hannah ruled that Gee and True Life violated the restrictions – which he said had amounted to contract with Ahwatukee homeowners – by purposely allowing the property to deteriorate and failing to maintain it as high-quality course.
Barnes said he is prepared to have the judge take the final step and order True Life or Gee to undo the damage.
“I am going to draft an injunction to restore the property,” Barnes said, repeating an argument from the trial that a well-maintained executive course could succeed with the right amount of promotion and support from the community.
He said more courses have opened than closed in Arizona in recent years, despite the Great Recession and the decline in popularity of golf sensation Tiger Woods, who once attracted swarms of golfers.
“Golf is not dead,’’ Barnes said. “That’s an easy thing to say and it’s not entirely true.’’
True Life and Gee had argued a change in the restrictions was justified because a stand-alone golf course is no longer financially feasible, that Ahwatukee Lakes was beyond repair and that it would be impossible to obtain funding to rebuild it.
True Life had opted for that effort to overturn the Conditions, covenants and restrictions governing the site’s use after failing to get more than half the approximate 5,400 Ahwatukee Lakes homeowners to agree to a change in the CC&Rs.
The company had spent more than a year in its campaign to win approval for a plan called Ahwatukee Farms, which would have made a five-acre farm the center of a development that would include the homes, a private school, a café and other amenities.
Barnes categorized Hannah’s ruling as a “repudiation’’ of True Life’s new position, saying that the judge ruled the property must be restored as a golf course – no matter the cost – to comply with the deed restrictions.
“The key to all of that is the CC&Rs are a contract between the property owner’’ and neighbors who benefit from the restrictions, Barnes said.
Many of those neighbors paid premium lot prices to be located on the course’s perimeter.
Gee started the course’s downfall by cutting off the water supply and closing the course in May 2013, Hannah ruled.
The judge noted Gee’s testimony during the trial.
Gee had testified that he spoke with the Ahwatukee Board of Management in 2008 and with City Councilman Sal DiCiccio in 2009 about redeveloping the property.
Gee testified those early conversations led nowhere and he subsequently focused on selling the course as he started losing money during the recession.
But Hannah concluded, “There was no evidence that the golf course could not have been operated profitably in 2008.” He said Gee was mainly concerned was one of his other courses, Ahwatukee Lakes Country Club.
At the time, Gee owned all four golf courses in Ahwatukee. Last year he sold the Club West Golf Course for around $1 million. True Life bought Ahwatukee Lakes for about $9 million.
True Life bought the property in 2015 with no intention of operating a golf course and hopes of turning it into a lucrative residential development, the judge ruled.
Hannah reiterated his previous ruling from 2016, that the deed restrictions still require the operation of a golf course. His ruling cited the deed restrictions, which say, in part, that the site “shall be used for no other purposes than a golf course’’ and associated improvements.
He noted that Gee’s own lease between the investors who bought the property, Bixby Village Golf Course Inc., and Gee’s operating company, Ahwatukee Golf Properties, amplified the deed restrictions.
The lease required maintenance of Ahwatukee Lakes “in accordance with the standards of a high-quality privately-owned public and semi-private golf course,” the ruling said.
“By closing the Ahwatukee Lakes Golf Course in May 2013, shutting off the water and electricity, removing the irrigation heads from the irrigation system, draining the lakes and failing to maintain the property so that it could be used for golfing or golfing practice, Bixby breached its contractual obligations under the 1992 CC&Rs,’’ Hannah ruled.
True Life was bound by the same deed restrictions, even though the company chose to ignore them and attempted to get them modified to allow residential development instead, Hannah concluded.
“The inequitable conduct of Bixby Properties, which created the alleged hardship to the property owner, also cuts against equitable relief for” True Life, Hannah ruled, declaring:
“At the very least, (True Life) had reason to know that Bixby’s actions substantially contributed to the conditions that made restoration of the golf course economically unfeasible. Bixby, not TTLC (Ahwatukee Lakes Investors), will bear most of the economic burden if the transaction fails. That result, frankly, will not be unfair.”
Hannah also alluded to True Life’s efforts to protect itself financially from an unfavorable court ruling, or a political failure to get the property rezoned, through the terms of an out clause in its promissory note with Gee.
While True Life plunked down a $750,000 down payment in 2015, it still owns $8.3 million to Gee to complete the sale.
Barnes said that sets the stage for the next step if and when Hannah issues an injunction.
Lawyers will submit briefs arguing about the terms later this month and early next.
“I think they (True Life) will probably default. They put a lot of money into that property,” Barnes said, predicting that Gee will put the property into foreclosure and probably end up keeping it when he gets no takers.
Gee told AFN he does not know what he will do, adding that True Life officials told him they will contact him once they decide what they want to do.
Barnes said he is hoping that Gee, who testified during the trial that the property was worth $1 million if used as a golf course, will finally sell to someone interested in rebuilding the course.
“You can make a good living out of this golf course but you have to market it,’’ developing strong ties to the community and turning the course into a community staple, Barnes said.