The Arizona Supreme Court ended the nearly seven-year legal battle over the Ahwatukee Lakes Golf Course last week by refusing owner Wilson Gee’s request to hear his appeal from an order that he restore the site he closed in 2013.
Attorney Tim Barnes, representing homeowners Linda Swain and Eileen Breslin, said he would seek a hearing to compel Gee to restore the course – and possibly hold him in contempt if he refuses – as soon as the high court sends him paperwork related to its action last week.
But Gee has other plans.
He told AFN that he wants to meet with Breslin, Swain and anyone else they want “to see if there is a middle ground” they can reach in negotiations.
“I want to sit down and try to resolve this problem to where the whole community benefits,” he said.
After the state Court of Appeals last year rejected his appeal of a January 2018 Superior Court decision that the covenants, conditions and restrictions governing the 101-acre site require a golf course, Gee had made a similar offer.
He offered $1 million for community improvements and to pay the homeowners’ legal costs if they would agree to let him sell the course for development.
That particular offer, though, “is long gone,” Gee said.
“You know, we’re entering a recession,” he said. “It’s happening in real estate and everything else. But there’s still value in that where the community can benefit from a business standpoint. But I won’t do anything without the support or of the community support. I’ve given up trying to do anything without their support.”
On the other hand, he added, if they refuse to meet or can’t reach a compromise, “Then I think I really have no other option than to take it into bankruptcy.”
Bankruptcy further muddies the defunct course’s long-term future and would temporarily stall any “show cause” hearing sought by Barnes to have the court force the site’s restoration.
A spokesman for Swain and Breslin declined comment on Gee’s desire to meet, referring instead to a statement they issued over the weekend.
In that statement, Breslin and Swain said:
“This one’s for our neighbors.
“Greedy developers who sought to make a killing at our expense are being held to account. The thousands of us who watched them destroy the Lakes habitat for birds, trees, fish, wildlife and golfers have been affirmed.
“It may be weeks or months before the final order of the court is in hand – but the decision is clear: The Court has shut down the developers’ appeal, ended their case –and ordered them to pay our attorneys’ fees.
“The next step must be to restore the golf course as a community asset.
“We’re immensely grateful – to the courts, to our lead attorney, Tim Barnes, and especially to the leaders and membership of Save the Lakes Ahwatukee. This is a compelling victory that demonstrates when neighbors stick together, they can prevail.
“We also want to be clear: we intend to see our neighbors compensated for their years of worry, and the loss of full enjoyment of their homes. Because no one should have to endure that, we’ll ask the losers to pay.”
In an interview before that statement was issued, Gee asked, “What did they win?”
He reiterated his oft-stated prediction that a golf course on the site “will never be built because no one will build it.”
But he said he likely would not seek to go to federal court with a new fight over the site’s future, saying it would likely be a waste of money.
Barnes said he also will be moving to have the court order payment of his legal fees.
If Gee files for bankruptcy, the case could be resolved in as little as three months –– although what will happen to the site remains a question.
Gee would likely be filing as a “single asset” entity.
While some single-asset debtors before 2005 used a bankruptcy filing to delay a pending foreclosure for as long as possible in the hopes that the market would improve enough to allow investors to recover some of their equity, Congress enacted stringent requirements that basically requires bankruptcy court to resolve the case in three months.
Barnes declined to speculate on the next moves Gee might make, but said he was “so ecstatic I almost jumped out of my chair” when he got the high court’s notice last Friday.
In his brief to the Supreme Court, Barnes described arguments by Gee and True Life “hollow.”
The True Life Companies purchased the course for $9 million in 2015 with the intention of building about 160 homes with a five-acre farm, a private school, café and amenities.
The developer put down a $750,000 down payment on the deal, which was based on its ability to win the consent of just over half the community’s approximate 5,400 homeowners to amend the CC&Rs so it could sell the land to a homebuilder.
Gee foreclosed on True Life’s note in 2018 after True Life abandoned the plan, but the developer had remained a part of the appeal virtually in name only.
Gee and True Life argued that forcing the restoration of the course violated the U.S. Constitutional prohibition of slavery and that the appellate court misconstrued the meaning of the site’s CC&Rs.
They asserted that the CC&Rs permit the owner to “abandon, demolish, cease the use of” any golf-related activities there.
Gee closed the course in 2013, claiming he was losing money and that golfing could no longer be profitably operated there.
Swain and Breslin filed suit a year later, contending that they and many other homeowners paid premium lot prices for their houses because of the course.
They also have argued that the five lakes that once existed on the site had been constructed in a way that provided flood control in the event of heavy runoff from South Mountain during torrential rains.
True Life, which had proposed an agrihood called Ahwatukee Farms, said it had included plans for a smaller lake that would provide that same flood protection.
Barnes has maintained that Gee had been planning to sell the course to a home developer since at least 2008 – two years after he paid $5.6 million for Ahwatukee Lakes and the Ahwatukee Country Club.
He also had argued that True Life knew what it was getting into when it agreed to buy the site nine years later.
“The trial court found that there was no evidence that the golf course could not have been operated profitably in 2008,’” Barnes wrote the Supreme Court in urging it not hear the case.
He noted that Superior Court Judge John Hannah – in upholding the CC&Rs in 2018 – found that the “evidence did not show that (Gee) could not have operated the golf course profitably with adequate maintenance, at any point in time before (Gee) closed the course and stripped it.”
As for True Life, Barnes cited the testimony of two company executives, one of whom said “there was ‘no chance’ TTLC would build a stand-alone golf course” and the other who testified that the company bought it “with eyes wide open” on the campaign it would have to wage to win enough homeowners to its side.
As for True Life’s argument that it would be forced into “involuntary servitude” if it was ordered to restore and run a golf course, Barnes told the high court, “TTLC made the business decision to purchase the golf course which would, upon purchase, bind TTLC to comply with the 1992 CC&Rs.”
“By itself, that voluntary decision made with full knowledge of the risks totally undermines (True Life’s) ‘involuntary servitude’ argument,” he added.
The cost of rebuilding the course has been a subject of dispute between the homeowners and Gee.
Barnes presented golf course experts who estimated – nearly three years ago – that rebuilding would likely be around $6 million. True Life commissioned a study that put the tab at more than twice that amount.