An attorney told the Arizona Court of Appeals last week that the former Ahwatukee Lakes Golf Course can lie fallow, “in it’s natural state’’ that owner Wilson Gee does not need to rebuild it.
“The intent was, if you are going to use the property, it has to be a golf course, but you don’t have to use the property,’’ said Dan Maynard, an attorney representing Gee.
But two out of three judges hearing the case noted that the deed restrictions on the property specifically require a golf course, echoing the ruling of Maricopa County Superior Court Judge John Hannah who handed homeowners seeking the course’s rebirth a major victory in January 2018.
Gee has challenged Hannah’s ruling in the Court of Appeals, vowing to never rebuild a course that he closed in 2013 because it was losing money during a downturn in the saturated golf industry.
The hearing before the three-judge panel in Phoenix marks the latest chapter in the five-year-long litigation filed by a group of homeowners to force Gee into restoring the moribund course, which he closed in 2013.
In appellate courts, judges meticulously review the transcripts and documents from the lower court case and pepper attorneys with pointed questions.
Last week’s hearing was no exception.
Judges Randall Howe and David Weinzweig had plenty of questions for Maynard, while Judge Jennifer Perkins silently listened to the arguments.
Weinzweig, reading from the deed restrictions, said, “the property must be used for no purposes other than golf courses.’’
He also challenged another part of Maynard’s argument in which he cited a portion of the deed restrictions that allows the owner to abandon improvements on the property.
Maynard said the clause gives the owner the right to abandon all facilities, including the golf course, while Weinzweig said he interprets that clause to mean it only relates to improvements related to the clubhouse or a restaurant.
“It falls squarely out of the use of the word golf courses in the first sentence,’’ Weinzweig said. “Our job is to determine and enforce the original intent of the parties in the agreement.’’
Howe challenged the central premise of Maynard’s argument, saying, “the agreement requires a golf course. Where in the CC&Rs does it give an option of having a golf course or not having a golf course?’’
Maynard and Tim Barnes, the attorney for the homeowners, appeared to agree that the course was built with an intent to take advantage of a law that taxes golf courses at a lower rate than other properties.
But they clashed on Maynard’s argument that the courts cannot force Gee to rebuild the course.
Maynard said Gee can chose to not rebuild the course and not take advantage of the lower tax rate afforded golf course properties.
“The option is that you don’t have to use the property,’’ Maynard said. “There was no intent that it would be a golf course in perpetuity.’’
He said the plaintiffs “want something green and lush. They want something that looks beautiful that someone else is paying for.’’
Maynard added that the plaintiffs “don’t even play golf.’’
Barnes argued that the deed restrictions clearly spell out that the property must be maintained and operated as a golf course.
Barnes said the deed restrictions speak for themselves when Weinzweig questioned why there wasn’t testimony about the intent of the developers when they drafted the deed restriction.
“All they were thinking about was complying with the statute to get that tax benefit,’’ Barnes said. “I don’t agree that the documents say anything about a golf course or nothing.’’
But Barnes conceded that the deed restrictions do not specify the type of golf course.
Ahwatukee Lakes was an 18-hole executive course in its heyday, but the course turned into a dusty eyesore after Gee closed it and turned off the water, saying he was losing money by operating the course.
Howe raised another option, but conceded it might not be very appealing.
“It could be the ugliest golf course ever designed, it might not make the homeowners happy, but it would comply with the statutes,’’ Howe said.
Homeowners Linda Swain and Eileen Breslin, who filed the suit against Gee’s companies five years ago, have presented testimony before Hannah by experts who estimated the cost of rebuilding the course would be around $6 million.
Some of those experts said, however, that it would require a detailed inspection of the irrigation system and the grounds to determine a more accurate estimate.
Before it walked away from the 101-acre site and left Gee take back control of the course, The True Life Companies had presented an expert who estimated the cost of rebuilding the course would be at least $14 million.
After the hearing, Gee repeated his vow to never rebuild the course.
“You want to lose a million dollars?’’ Gee said. “It’s impossible. No one wants to put a golf course there. No one is building golf courses anymore. There is no funding.’’
But the homeowners argue that it was Gee’s incompetence in running the course that doomed Ahwatukee Lakes, and that the right owner and operator could restore Ahwatukee Lakes to its past glory.
The three-judge panel took the matter under advisement, with Howe saying only that it would rule “in due course.’’