During one of True Life’s many town halls last year, members of the public listen to Charles Wright, from Kimley-Horn, speak about the impact on traffic around the proposed Farms development.
Cheryl Haselhorst/AFN Staff Photographer

True Life Companies took a calculated risk – spending $3 million to sell its vision of turning the fallow Ahwatukee Lakes Golf Course into a lucrative residential redevelopment plan.

Aiden Barry, True Life senior vice president, testified in Maricopa County Superior Court that he thought he could collect the signatures of 51 percent of property owners to change deed restrictions that require the property to remain a golf course if  the company came up with the right concept.

But while Barry’s company collected about 2,000 signatures for its controversial Ahwatukee Farms proposal – a preschool, urban garden and residential development – it failed to collect the 3,564 signatures required.

Now, the fate of True Life’s crapshoot rides on a pending ruling by Superior Court John Hannah, who must decide whether the former course’s terrible condition and the decline in the golf market constitute a “material change’’ that would justify a modification in the deed restrictions.

Even if Hannah were to rule in True Life’s favor, the company would still face a stormy Phoenix rezoning hearing on its latest plan, which combines a nine-hole par-3 course with about 275 new homes. Closing arguments are scheduled in Hannah’s north Phoenix courtroom today, Nov. 1.

If nothing works out, Barry said, company executives testified that a spinoff company created for the sole purpose of redeveloping the 101 acres, Ahwatukee Lakes Investors, could simply default on an $8.25 million payment due on June 19, 2018.

The arrangement would potentially protect the parent company and others from liability and return the property to former owner Wilson Gee, whose recourse would be foreclosure proceedings.

True Life paid Gee $750,000 on June 19, 2015 and had $500,000 payments due on a promissory note on the same date in 2016 and 2017, according to the testimony.

But with costs soaring and no true progress being made toward selling off lots or possibly building houses itself, True Life sought and received amendments to the purchase agreement. Gee allowed True Life to forgo the payments in return for an interest payment, which Gee subsequently waived.

“We went into this with eyes wide open,’’ Barry said. “We evaluated the risk and decided to move forward.’’

“True Life approached this knowing there was an ultimate zoning case with the City of Phoenix,’’ he said. “If we were successful in garnering the 51 percent support from the community, there would likely be good support for the rezoning case.’’

Barry was generally composed while he was questioned by Tim Barnes, an attorney for Ahwatukee residents Linda Swain and Eileen Breslin, who have been staunch opponents of the redevelopment plan.

But he grew a bit testy when he thought Barnes implied that True Life failed to gain support for Ahwatukee Farms, a plan Barry said he thought would appeal to the entire community rather than just golfers.

“We gained the support of 2,000 residents,’’ Barry testified. “We gained tremendous community support’’ – the most, he added, in his career for such a change.

He acknowledged, however, that the company turned to a Plan B after realizing the signature drive was doomed: pursuing legal action to change the deed restrictions under the “material change’’ provision in the deed restrictions.

The latest plan, featuring the par-3 course, emerged in court documents just days before the trial.

But Barry and Tabor Anderson, another True Life executive, said a golf course supported by a homeowners association made up of new residents who purchase the homes always was an option.

“You just defined a land option,’’ Anderson said when Barnes outlined details of the sale agreement.

When Barnes questioned the need for a $200,000 political consultant, Anderson explained the realities of redeveloping an appealing infill site surrounded by homes in an upscale community. These were the same qualities that enticed True Life into the purchase.

“Entitlements work is like running a political campaign. Instead of getting elected, you get approvals,’’ Anderson said.

The course would feature larger-than-normal greens with two pins. Golfers could shoot for, say, the white pins during the first nine holes, then shoot for the blue pins during their next round to add variety.

The HOA would own the golf course and members would be liable to support the course financially if a shortfall was encountered.

Anderson and others testified in no uncertain terms that a new stand-alone course, supported almost entirely by greens fees, would not succeed.

Anderson said the proposal would correct a problem created from the beginning of Ahwatukee’s development, where 5,200 homeowners had no responsibility for supporting the course.

Swain and her expert, Buddie Johnson, who helped develop Las Sendas and Red Mountain Ranch in east Mesa, disagreed.

Swain envisions an executive course similar to Augusta Ranch in southeast Mesa. Johnson cited the property’s outstanding location and the area’s demographics as reasons a well-designed, competently operated executive course could prosper.

“I have had at least five substantial and capable buyers come to me and express an interest,’’ Johnson said. “It’s a site in the midst of 5,000 homes, with 200,000 people in a five-mile radius. They have the time, they have the money, they can play it fast.’’

He said he envisioned a family, or someone with experience in the golf business who is relocating from the Midwest, buying and operating the course, making it an integral part of the community with league play and other outings.

Executive courses appeal to many of the people who make arguments against golf, citing the expense, time, money and difficulty in playing the sport, Johnson said.

But Anderson and Richard Carter, an expert hired by True Life as a consultant from Troon, made Johnson’s opinion sound like a pipe dream.

“No chance,’’ Anderson said bluntly when asked whether a stand-alone course could succeed on the property.

Anderson, who has developed 15 courses, said courses generally serve as an amenity to attract homebuyers or the construction of hotels and resorts.

“It took about one minute to decide that,’’ Anderson said, reflecting on his opinion that a stand-alone course is not viable. “You know how important it is to have those revenue sources to support the amenity upfront.’’

He said Carter’s conclusion that it would take 29 years for a builder to recoup its investment makes it impossible to find financing to replace the Ahwatukee Lakes course.

Johnson and Carter made vastly divergent estimates on how much such a course would cost. Johnson concluded about $4.8 million, using some cheaper options such as a modular clubhouse rather than a permanent one.

Johnson cited a $3.9 million renovation at Mountain Shadows in Paradise Valley and a $3.5 million renovation at Rolling Hills in Tempe. Neither course was as badly neglected as The Lakes.

Carter testified that he estimates a three-star facility would cost about $14 million, building a more permanent clubhouse, replacing the irrigation system and building a storage facility for expensive maintenance equipment.

“I’d get laughed out of the room’’ if he were to propose such a course, Anderson said. “That’s why these things are funded on the backs of developments.’’

He described True Life’s latest proposal as having a park-like buffer zone, separating existing homes from the new ones while providing a walking path. He said part of the development would have a park-like appearance while another part would feature the par-3 course.

Carter said Johnson’s estimate understated the true cost because it is too general. He said Troon would not be interested in building a course on the property.

“I would expect this course to be in the condition it is for a long period of time’’ because of a lack of return on investment and a low probability that it would do better under a different owner than Gee.

 

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