Wednesday, April 10, 2013

Owners say city played hardball on golf course 'News Press'

In court, claim rules were onerous; Cape says rules are rules.

 By Thomas Stewart   The News Press

The owners of an abandoned 175-acre golf course in Cape Coral who are suing the city argued in court Tuesday the city abused its own processes in an effort to force the owners to default on their loan so the city could snag the property.

“The evidence will show the city was hoping to acquire (it) in bad faith at fire sale prices,” said Michael Ciccarone, a lawyer for the owners of the 18-hole course on Palm Tree Boulevard.

The suit was filed in 2009. The trial began Tuesday and is expected to conclude April 16.

After both parties present their cases, Circuit Judge Mi­
chael McHugh will issue a ruling. There is no deadline for his ruling.

The owners have long argued the city effectively condemned the property through restrictive regulations that prevented development.

On Tuesday, Ciccarone said the city blocked an attempt to change the future land-use designation from parks and

recreation to mixed-use, which would have allowed the construction of 100,000-square-feet of shops, 300,000-square-feet of office space and about 800 homes.

He said the property was no longer viable as a golf course, demonstrated by the failure of the former owners, who bought the property in 2001 and lost money every year until 2006, when the course was shuttered.

Scott Siler, who managed the property and still has a $375,000 stake, took the stand and explained how 50 investors paid $4.3 million for the course and borrowed another $4 million for renovations. Siler said the annual taxable losses ranged from $1.7 million in 2002 to $768,000 in 2005. In 2006, the same investors agreed to split ownership of the property with Minnesota-based Ryan Companies US in exchange for a $9 million loan to pay off their debts and other expenses.

Clay Crevasse, a lawyer representing the city, pointed out the land use and regulations were already in place when the property was purchased.

Crevasse said the city denied the land-use change because it could have allowed industrial projects and other ventures incompatible with surrounding residential neighborhoods.

“This property owner bought at the height of the market and, within two years, the bottom had fallen out,” he said. “It is not the obligation of the city to approve a plan that provides no benefit to the public.”

And, he said, the owners failed to apply for other potential land uses, such as residential, which the city likely would have approved and could have proved profitable. Ciccarone presented testimony that the city’s own policies indicated it felt it had enough residential property already. But he has said the owners no longer seek a land-use change and that the city wants to buy the property but has not yet offered enough money.

He said the two parties are millions apart in their opinion of the property’s value, but he declined to say how much they want.

On Tuesday, Pat Ryan, president of Ryan Companies US, testified the company has invested about $19 million in the property and revealed the company thought it could be worth $25 million-$30 million with the desired land use.
Clay Crevasse, a lawyer representing Cape Coral, cross-examines a witness Tuesday in a dispute over an abandoned golf course. GUY TUBBS/THE NEWS-PRESS

“It is not the obligation of the city to approve a plan that provides no benefit to the public.”

CLAY CREVASSE,  lawyer representing Cape Coral