By Deborah Goonan, Independent American Communities
Ahwatukee Lakes is one of the many struggling golf course communities I have been following on IAC. Last week, Ahwatukee Foothills News reported an important legal victory for homeowners.
Since Ahwatukee Lakes Golf Course’s 2013 closure by then-owner Wilson Gee, a group of homeowners, who originally bought into the community specifically for the golf and country club lifestyle, have been fighting to prevent redevelopment. Concerned homeowners have raised funds to fight their battle by organizing themselves as Save the Lakes/Save Open Space (STL/SOS).
Plaintiff homeowners, Linda Swain and Eileen Breslin, as well as STL/SOS contend that, since 2008, Wilson Gee intentionally neglected to water and maintain the golf course, allowing it to decline. Then Gee attempted to convince the court to allow a change in CC&Rs that required Ahwatukee Lakes to remain as a golf course. Gee argued it would be too expensive to restore the golf course, and, ultimately, unprofitable to operate.
When that didn’t work, Gee made a deal to sell the property to The True Life Companies (TTLC). To date, TTLC has paid $750,000 toward the agreed sale price of $8.25 million.
TTLC argued in court that it is likely to cost $14 million to restore the course, and that development of new homes would be necessary to cover golf course and club house restoration, not to mention ongoing maintenance costs through a newly established HOA.
At one point, TTLC proposed converting the golf course to an Argihood – essentially a community farm surrounded by hundreds of new homes, to be collectively supported by a new master homeowners’ association. But TTLC was unable to collect enough homeowner votes (51% of all property owners) in favor of changing restrictive covenants that currently require the Ahwatukee Lakes to operate as a golf course.
More recently, TTLC proposed a smaller golf course with walking trails and park areas, also in addition to new homes surrounded by buffer landscaping.
But Superior Court Judge John R. Hannah Jr. denied the request to ignore CC&Rs that homeowners Linda Swain and Eileen Breslin have counted on since they purchased their homes years ago.
In light of the Superior Court ruling, TTLC is expected to walk away from the deal, and ownership of Ahwatukee Lakes will revert to Wilson Gee.
Swain and her expert witness, Buddie Johnson, envision restoring Ahwatukee Lakes as an executive golf course at an estimated cost of $4.8 million. Whether or not that is a realistic vision will depend on how the restoration and operation of an executive course will be financed.
It also remains unclear what financial responsibility, if any, Wilson Gee will bear in restoring the golf course he failed to irrigate.
The golf course is privately owned, and operates entirely separately from the HOA for Ahwatukee Lakes master planned community. In other words, HOA assessments have never been intended to pay for operation of the golf course.
One thing that is made clear in the Ahwatukee Foothills News: in almost all cases, private golf course owners and developers rely on homeowners to support operation costs. Most golf courses can no longer sustain positive cash flow from membership and user fees alone.
Judge rejects True Life’s plan for Ahwatukee Lakes Golf Course
By Paul Maryniak, AFN Executive Editor Jan 3, 2018 Updated Jan 3, 2018
A state Superior Court judge on Tuesday rejected The True Life Companies’ plan for houses and other amenities on the defunct Ahwatukee Lakes Golf Course.
Judge John R. Hannah Jr. also ordered True Life to pay the attorney fees of the two residents who sued to have the course restored and further directed their attorney to propose an order by Jan. 23 that would help him determine the next step in the long legal battle.
The verdict was a complete win for residents Linda Swain and Eileen Breslin as Hannah also rejected True Life’s request that he set aside the land-use regulation that required the 101-acre site to be maintained as a golf course.
In light of this legal victory, homeowner group, Save the Lakes/Save Open Space has also published the following new release.
TTLC has been ordered to pay attorney fees and court costs to Swain and Breslin.
Golf Course ruling stops developers, affirms homeowners and neighbors
For Immediate Release, Thursday, Jan. 4, 2017
Contact: Law Office of Timothy H. Barnes, P.C. (602) 492-1528
Plaintiffs in the Ahwatukee Lakes Golf Course case and the president of Save the Lakes/Save Open Spaces Thursday saluted the ruling by Judge John Hannah as a victory for homeowners, a warning to developers who undercut homeowner protections – and a first step in restoring the golf course and its neighborhoods.
Judge Hannah ruled Jan. 2 that “TTLC (The True Life Companies) knowingly and voluntarily purchased the Lakes Golf Course with the contractual obligation to operate a golf course on it,” but tried to put up a housing tract, instead. As a result, Hannah wrote, “TTLC has breached its covenant of good faith and fair dealing.” The judge denied TTLC’s request to change that obligation, then reserved special attention for Bixby, the company which sold the course, headed by Wilson Gee.
The Judge wrote, “not later than 2008, Mr. Gee in fact began making efforts (himself) to redevelop the Ahwatukee Lakes Golf Course. In the fall of 2008, Mr. Gee met with the Ahwatukee Board of Management” to initiate that discussion, even though “There was no evidence that the golf course could not have been operated profitably in 2008.”
Five years later, Gee “shut down the well that supplied water to the lakes, depleting the water needed for irrigation.” Gee’s company, Bixby, “removed all but obsolete irrigation heads and shut off all power to the site including the clubhouse. The site, therefore, had not had any water or electricity since May of 2013.” The result, Hannah said at trial, turned the lush green golf course into a desolate “moonscape.” In buying the property, TTLC acquired free rights to 500 acre feet a year of water to irrigate the golf course, but didn’t even investigate how to turn on the electricity to deliver it, Hannah wrote. The result has been a catastrophe for fish, wildlife, birds, vegetation, and community life.
Hannah concluded, “The inequitable conduct of (Gee’s company), which largely created the alleged hardship to the property owner, also cuts against equitable relief for (TTLC). At the very least, TTLC had reason to know that Bixby’s actions substantially contributed to the conditions that made restoration of the golf course economically unfeasible. (Gee’s company), not TTLC, will bear most of the economic burden if the transaction fails. That result, frankly, will not be unfair.”