As Ahwatukee Lakes homeowners and golf course owner Wilson Gee await the Arizona Court of Appeals ruling on their five-year-old legal fight, a less publicized battle involving the site and county taxpayers has grinded to a halt.
That case pits Maricopa County against the course’s former owner, The True Life Companies Ahwatukee Lakes Investors, LLC, over more than $1.3 million the county says is owed
The county says that when True Life paid its 2015 tax bill, it improperly deducted a $1.3 million penalty the county had assessed because the land was no longer being used as a golf course.
True Life has contended from the start that it has always been entitled to the golf course discount for Ahwatukee Lakes Golf Course even though it was closed in 2013.
But it also is fighting a county effort to throw its suit out of court entirely.
The county claims True Life never paid its whole tax bill and therefore has no legal standing to now challenge the levy.
True Life asserts it did pay its entire tax bill and the $1.3 million is an illegal levy by the county.
But both the county and True Life lawyers do agree on one thing: they can’t fully argue the case until the homeowners’ lawsuit is resolved.
Lawyers for both sides in May 2017 first cited that separate case in asking the judge to delay a schedule for submitting briefs in the tax fight.
Since then, Superior Court Judge Christopher Whitten on eight separate occasions has granted similar requests.
Most recently, Whitten on May 14 set new deadlines for briefs that extend to the end of September and has tentatively set a hearing for Nov. 22.
Each time an extension was requested, lawyers for both sides cited the ongoing lawsuit by homeowners Linda Swain and Eileen Breslin that demands Gee be ordered to restore the golf course.
A three-judge appeals court heard arguments in that case last month, though it is under no deadline for rendering a decision.
At issue in that case is Superior Court Judge John Hannah’s January 2018 ruling that the covenants, conditions and restrictions governing the site rule out any other use of the property except as a golf course.
Gee’s lawyers argue that the CC&Rs do not give the court authority to order the restoration of a course they contend is a money-loser.
Homeowners attorney Tim Barnes has maintained that the CC&Rs require a gold course, though one of the appeals court judges during oral argument suggested that the land-use regulations don’t necessarily dictate how good a course it should ebb.
The homeowners want the site restored to the pristine 18-hole executive course it once was.
They introduced testimony by several golf industry experts who estimated that the course could be returned to that state for around $6 million — a figure that True Life’s consultant several years ago said was woefully below the true cost of restoration.
That consultant pegged the total at nearly three times that much.
A lawyer for True Life says that since Gee last September foreclosed on the $8.1 million note it signed in 2015 to buy the course, True Life no longer has any stake in the homeowners’ suit.
But that apparently is not true in the tax case, where a complicated series of arguments now awaits Whitten’s ruling at some point in the undeterminable future.
True Life has argued that the site should still be taxed as a golf course even though company executives have repeatedly said it will never be one again.
The difference is crucial, since the county taxes golf courses at a lower rate.
Golf courses annually are required to tell the county the total number of rounds paid in an effort to make sure that the owners who get the tax break are still operating their sites as golf courses.
According to court papers, Chief Appraiser David Beau Boisvert emailed other county officials, writing “It is official, we have our first golf course that will receive a non-qualifying valuation for 2015 and the first golf penalty based on the statutes.”
While True Life was fighting the county’s decision stripping the site of its golf course tax rate, it also was trying to convince slight more than half of the 5,400 Ahwatukee Lakes homeowners to change the CC&Rs so it could build an “agrihood” on the site that would make a five-acre farm a kind of focal point for a development with about 270 single and two-family homes, a café and a private school.
After dropping that effort, True Life eventually just walked away from the property, enabling Gee to once again become the owner.
In the tax case, the county has asked Whitten to dismiss True Life’s challenge altogether, stating that because it deducted the $1.3 million from its 2015 tax bill, it never paid its taxes in full and therefore has no legal right to be seeking court relief.
But True Life asserts that the county is improperly using the terms “tax” and “penalty” interchangeably.
Besides, it argues, the county didn’t even tell True Life it owed a penalty until two years after its deadline for doing so.
“Ahwatukee Lakes paid all the taxes,” True Life’s lawyers wrote. “The only thing Ahwatukee Lakes did not pay was the improper penalty.”
Claiming the county cites legal precedent that only has to do with paying taxes, they add, “There is no requirement anywhere that a plaintiff must pay penalties for the court to retain jurisdiction in litigation challenging those penalties.”
They also argue:
“The county has not offered any explanation why the Legislature would use two different words interchangeably if they mean the same thing. There is none. The Legislature used the word ‘tax’ when it meant ‘tax’ and ‘penalty’ when it meant ‘penalty.’”
Besides, they argue, “the penalty imposed by the county here is illegal and improper because the county did not impose it until the 2015 tax year — two years after the county determined in 2013 that the property no longer qualified as a statutory golf course and started valuing the property as vacant land.”
The case like will drag on well into next year since the dispute over penalty versus tax is only a prelude to True Life’s main contention — namely that even though a round of golf hasn’t been played there since early 2013, Ahwatukee Lakes still should be treated as a golf course for tax purposes.