Questions & Answers

The Edge at Club West Open House
29 January 2020

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Did you explore other options? Why a Golf Course?

Our golf, clubhouse and facilities proposal, “The Edge at Club West”, is based on what our research showed to be the desire of the majority of homeowners.

Q: My specific concern is more about your business model.

Q: My specific concern is more about your business model.

How many rounds of golf per year to break even.

Assumed carrying costs.

Pay structure for the owners etc.

how much money will be held in escrow for operations?

Etc.

This all feeds back to the sustainability of the business plan.

Also, what level of enterprise does the Edge have experience running?

What has been shared is not really a business plan. It is a sketch or an outline. I realize that you prefer to be opaque in this transaction. I’m guessing if the residents could see the details they would break out the torches and pitchforks. If you want to build any confidence then details are necessary. Some residents DO have experience running large businesses.

Your vague response doesn’t help. When will more information be available? 

ANSWER:

The goal is transparency and openness. We understand the need to demonstrate that 1) our golf proposal is not a “money grab”, and 2) the Course itself will be financially sustainable. We have always been prepared to share our business plan with the HOA Board which represents the homeowners as well as the Golf Committee which now will include qualified members of the community.

Like some residents, the Principals in the Edge all own (or have owned) and have experience running companies. We understand that when a gap in subject matter expertise exists in any specific area, best in class experts must be retained. That is what we have done and this a typical business model in the Golf Industry. Successful golf operations require synergy between Operations, Marketing, Sales, Food & Beverage and Agronomy.

Additionally, economies of scale apply to each of these categories (Operations, Marketing, Sales, Food & Beverage and Agronomy) – particularly among Agronomy, Marketing and F&B. Contracting with an entity such as OB Sports/Troon for Agronomy,  (for example), allows for participation in bulk purchasing of seed, equipment, equipment maintenance contracts, organics, etc. We can lower costs and increase the skill sets and expertise significantly by partnering with best in class management entities. Take Marketing as a second brief case study; OB Sports/Troon have tremendous influence with tee time booking applications, (such as Golf Now), as well as their own tools, (Such as Troon Privé) to drive sales of rounds. They also have a corporate database to drive events bookings. Even basic functions like volume purchasing of apparel, score cards, glassware, flags, range balls and so on help the bottom line.

We retained OB Sports, (a division of Troon), to assist in creating a business plan including financial proforma. Combined OB Sports and Troon manage approximately 97 courses in the US and 129 courses worldwide. We are always willing to listen to others who have experience operating and managing golf courses. To this end, we continue to talk to other golf course management companies to get input. If you, or any resident in Club West, has golf course management expertise that could add to or supplement the information we are receiving from OB Sports, Troon and other golf course management companies we would be glad to talk.

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Q: Will the proposal affect the existing HOA clubhouse, tennis courts, and recreation facilities?

No.

Q: If the HOA approves the plan and homeowners return a majority vote of Yes to proceed, what is the contingency plan if all necessary zoning is denied by the City of Phoenix? What is the plan if homeowners return a majority vote of No?

We are currently working with the HOA Board’s legal counsel to put a process in place that will answer these questions. As soon as we have agreed with the Board on the process, the Board will provide the process to the Community.

Q: What will be the actual grading on each parcel – and if it varies within each parcel, what will the elevation be? Can you describe as height of structure from Central, West, N East and S East current dirt elevations or in a similar manner?

We are not at a point in the site planning process that would dictate actual grading plans for the Parcels. Much of the grading exercise will be established with the goal of minimizing earthwork, avoiding existing drainage facilities and limiting retaining walls. Final grades will also be influenced by access to existing sewer outfall. As a general guide, we are currently utilizing the center fairway grade on the West Parcel, the parking lot grade on the Central parcel, and balancing 50% of the grades north to south on the East Parcel as base elevations for our analysis. We are also avoiding areas with significant grade change. On the West Parcel, for example, we are avoiding development in the Northern portion of the Parcel, thus allowing us to lower the overall grades.

Q: What will be the distances between houses in each parcel?

The current site plans contemplate 10’ side yard separation on the Central and West Parcels and 15’ side yard separation for East Parcel.

Q: What is the distance from existing houses to new houses in each parcel?

The distances from existing homes to new homes vary throughout each Parcel. The various Parcel lotting plans provide sample distances that can be utilized to estimate a specific homeowner’s distance. If you are measuring home to home then both rear yard depths should be considered. Once we have determined final lotting and houses types, we can provide more specifics for your home.

Q: Can you do anything to allow for more parking and better access to existing HOA clubhouse and park/tennis facility?

Our current plans do not assume additional parking contributions to the HOA. The HOA does own the land contiguous and south of the Park. Perhaps there is an opportunity for the HOA to create additional parking in that location and we are more than willing to assist.

Q: Can the west parcel be configured differently within the same space to reduce loss of views and increase greenbelt between new and existing homes?

We respect the overall Community concern to preserve view corridors and yes we are currently reviewing alternate site plans for both the West and Central Parcels to reduce the number of 2-story homes.

Q: Can you prove you are not involved with Wilson other than initial purchase from him?

HOA Board knows we are willing to disclose to details of the purchase agreement to them. We will also work with the Board’s legal counsel so they can confirm our relationship with Gee is limited to the terms of the purchase agreement.

Q: Did you refuse to share your golf course financial plan or do you think it is not important?

We understand that the Community wants to ensure sufficient funds are available to build and operate the facilities long-term. Thus, we plan to share our confidential information with the HOA Board and Golf Course Committee so that they can become comfortable that our plan will generate sufficient funds to build and operate the facilities long-term.

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Q: How is losing 50 acres of current open space considered “restoration”?

A golf course and a properly preserved “Open Space” are separate concepts. Our plan restores an 18- hole course worthy of our community and the direction of modern golf.

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Q: Did you get as much per acre as Tempe Schools did for Palmas Brisa? If not, why?

No, our contract with Taylor Morrison was at a discount to the Palmas Brisas deal. Through the Parcel Offering Process, homebuilder demand dictated our selling price. Many homebuilders decided not to participate in the offering due to the stigma surrounding The Lakes. The uncertainty and risks associated with the Club West approval processes were definitely priced into the deal. It is important to note that Taylor Morrison was not the highest offer, but rather the builder we felt was best for the Community.

Q: Won’t traffic double on 14th Avenue as opposed to a normal day when the course was open?

We understand that potential increases in traffic along 14th Ave is a concern. Once we determine the final site plan for the Central Parcel we will engage our traffic engineer to provide accurate traffic counts.

Q: Would you agree that the plan is tearing the community apart? 75 homes will be in proximity to new development so that a few residents can play golf and a few others won’t have to look at dirt.

We do understand that any solution will cause angst and divisiveness. However, leaving the golf course in its current form is not a solution. As recent studies have shown, a fallow golf course robs all property owners of appreciation and value. This has occurred at Club West and will continue along a negative trend until something is done. The Edge at Club West is a tremendous benefit to the 2599 homeowners in the Foothill Club West HOA as far as a community asset and boost to property values.

We encourage discussions along the lines of “Are any losses of value related to views mitigated by the facts that 1) uncertainty in local real estate is settled, 2) disclosure signatures will no longer be required during transactions, 3) we will be getting a new golf course facility with amenities, 4) we are getting new green belts, parks and buffering, and 5) the new homes are designed and priced to increase surrounding property value?”

We also believe that having local homeowners develop a solution is preferable to having a large developer or outsider developing a solution. One of the reasons we decided to get involved was that we became aware of a pre-zoning application that wanted to put a gas station on the corner of Chandler and 17th and houses on all the remaining parcels. AKA “Develop the Entire Property”.

Our data showed the community wanted and benefited most from a golf course. We now understand that there are people who want open space instead of a golf course. We are working with a group to develop an alternate proposal. Most all involved understand that development is needed to fund either option. We continue working with others to help define any alternatives. Ultimately, it is a community decision that will be made by following the process set forth in the CCRs. The reality is that there will always be people that disagree with any decision that is made.

Q: Are you essentially stealing view from 75 homes whose property value will plummet and selling their views for tremendous profit?

We encourage discussions along the lines of “Are any losses of value related to views mitigated by the facts that 1) uncertainty in local real estate is settled, 2) disclosure signatures will no longer be required during transactions, 3) we will be getting a new golf course facility with amenities, 4) we are getting new green belts, parks and buffering, and 5) the new homes are designed and priced to increase surrounding property value?”

The financials will be disclosed to the HOA Board and the Golf Course Committee (which includes qualified members of the community) and they will be able to verify a reasonable rate of return.

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Q: Can there be fewer homes?

Potentially, based on the ongoing Community feedback, we are currently exploring alternative site plans and housing product types for the Central and West Parcels.

Q: Is there adequate drainage along the east and west perimeters of the East Parcel to handle the regional flows, and is the X-Section accurate (the drainage swale on the cross-section appears to be only approx. 1-2 feet deep)?

There is an approved Master Drainage Plan for Club West and yes the golf course accepts offsite flows. Any change to the current Plan will be professionally engineered and approved by the City of Phoenix during the civil plan approval process. Our goal is to design around and utilize as much of the existing washes and drainage facilities in our site planning process. You will notice that many of the existing washes/drainage swales are heavily vegetated and the planning goal is to leave these natural buffers in place. The FIRM maps designate the Property and surrounding neighborhoods as Zone X. Newly constructed homes will built within this designation without the need for Flood Insurance.

Q: Will golf carts be electric to reduce noise?

Very high likelihood that electric carts will be utilized. Battery technology has come a long way and our goals of fiscal and environmental sustainability are in line with using as much battery technology as possible. Solar charging may even be in play.

Q: Will the dog park remain at corner of Chandler and Central?

Yes, with possible enhancements.

Q: Have you considered “loaner bikes” for use on the course when safe?

Love that idea and it certainly defines the concept. We have similar suggestions for Yoga classes, a running club that uses the cart path as a ~ 5 mile track in early morning, Artisan Memberships (rounds in exchange for skilled work), Community Picnic Days, more Pickle Ball, Farmers Markets, Star Gazing with a neighbors 40cm telescope, Backyard Holiday Decoration festival with prizes and an illuminated walking night, and many more.

Did you know the famous St. Andrews Old Course in Scotland is open for the community to walk the course, picnic, etc on most Sundays?

Q. Would you consider delaying the HOA vote by 30-90 days to allow Homeowners to become more informed about your proposal?

We have considered delaying the vote. Although we will defer to the schedule that is set by the HOA Board, decisions need to be made and we would rather stick to the previously proposed schedule and remain committed to providing thorough information via our presentation and Fact Sheet at the 1/16/20 HOA Board Meeting, during our 1/29/20 Open House, responding to questions provided to us, and through other meetings and communications.

Also, we ask that everyone keep in mind we have contractual obligations to both the current owner of the course and Taylor Morrison. Delay could jeopardize the entire Proposal.

Additionally, based on the current schedule, the Homeowner vote would conclude at the earliest April 1. From the January 16th presentation to the HOA Board and Homeowners in attendance to February 20th (the date the HOA Board determines whether to submit the Proposal to the HOA members) is 5 weeks.

From the HOA Board determination to the earliest anticipated conclusion of the HOA member vote (April 1) is another 5 weeks. Thus, Homeowners have approximately 10-weeks to become educated about the Proposal. We believe this is sufficient time to educate themselves about the Proposal.

Q. Did you consider other homebuilders?

Yes. We requested proposals from approximately 10 local homebuilders.

We are confident that Taylor Morrison will help restore property values throughout the Community.

Q. Have you eliminated alternate water solutions?
We will never stop looking for feasible water solutions. However, we nor any of our predecessors over the past 5-years have identified a feasible water solution other than purchasing potable water from the City of Phoenix.

The most talked about solution contemplates acquiring irrigation water from the Gila River Indian Community (“GRIC”) for delivery by SRP. Although the base cost of the GRIC water appears attractive, two primary problems complicate this solution.

First, the Gila River Indian Community will only enter into a 5-year contract to sell water. Therefore, we cannot rely on this solution long-term.

Additionally, we would have to build a pipeline from Pecos Park along the south side of the Loop 202 to an existing City owned delivery system located on Liberty Lane west of 24th street. Now that the Loop 202 is complete, any attempt to deliver GRIC water to Club West must be approved by ADOT, 202 Connect Partners, SRP and the City of Phoenix.

Current cost estimates (without approved Civil Plans) are estimated at approximately $1.4M. In our assessment, the estimated cost of the GRIC water and delivery systems is not a feasible solution.

Many of you may have seen Rande Leonard referenced in a recent article as having been one of the primary architects of the potential Gila River Water Solution. Rande recently shared his thoughts on the feasibility of his solution:

“Here’s the deal on the SRP water “solution.” SRP will only do a 5-year contract. You may be able to buy enough to last longer (7 years+), but pay for it over 5 years, taking delivery later. There is no assurance of reasonably priced water after 5 years. Consequently, the pipeline must be amortized over 5-7 years. The cost estimate of the pipeline was $1.2mm last summer. As the freeway nears completion with DG and landscaping the cost will go up. Choose a number of years— and total cost: $1.4mm/7 = $200,000/year and all of a sudden you’re $400,000 plus pumping costs, etc. You can quickly get to $500,000/year with more escalations possible in the future. A longer contract period with SRP would reduce the annual depreciation cost and total annual cost. So, the uncertain contract period is the Sword of Damocles hanging over the pipeline as a water solution. It is a roll of the dice.”

Q. What is your water plan?
The Golf Course will be irrigated with City of Phoenix potable water. As is explained in above #3, this is the only known and economically viable water solution for the Property. However, we will continue to diligently pursue alternative water solutions even after the golf course is operational.

The original golf course was developed on 162 acres, including approximately 70 acres of turf. This required approximately 452-acre feet of water per year at a cost of $700,000+ per year.

The new course will be constructed on 110 acres, will have approximately 33 acres of turf and is expected to use approximately 182 acre feet of water per year. Combining the turf reduction with state-of- the-art irrigation infrastructure, we project a reduction in water costs to be approximately $296,000 per year which is an approximately $400,000 annual reduction in water cost.

We also anticipate that the cost of the water will increase 5% each year for the next 5 years. Other than the 5% increase, we are not currently aware of any other increases. However, recognizing that the cost of water will always be an issue for any golf course, we will continue to diligently pursue other alternatives.

The course still has the original irrigation system. That system is unusable, is beyond repair, and must be completely replaced. The good news is that the new irrigation systems are more efficient.

We have been advised that the new systems are 10-15% more efficient than what is currently in place. Additionally, by removing the lake and using storage tanks or other alternatives, we eliminate evaporation losses and gain additional efficiencies.

Q. When the reserves to pay escalating water fees runs out, how will you pay the increasing bills?

Based on our proforma, we anticipate being able to pay for the expected 5% increase in water costs over the next 5-years out of our operating account not out of our reserves.

Q. It is likely within a decade Phoenix will have to impose water restrictions due to decreasing supplies from the Central Arizona project. This will clearly impact non-residential drinking water users first. How will you maintain the course in the absence of potable water?
Although potable water is becoming a scarce commodity, we have no way of currently knowing what, if any restrictions, will be placed on golf courses in the future. The golf industry is a significant component of tourism and quality of life and a substantial revenue source for both the City and the State.

As potable water becomes more expensive for golf courses, we anticipate the City and State will work with courses in an effort to not lose the golf industry and the tax revenue it generates. Nonetheless, as stated above, we recognize that using potable water is not the perfect solution and we will diligently continue to explore alternatives.

Q. Do you have a Business Plan?
Yes. An Executive Summary of the Business and Construction Plan was summarized in the Board Meeting on January 16, 2020. To summarize, the golf course will be reconfigured into an 18-hole, par 60, USGA rated course.

The supporting course facilities, new clubhouse/community center, 18-hole putting course, practice facilities, bar and grill and pavilion area for events will be relocated to Chandler Boulevard where the current maintenance facility exists. The construction of the course and clubhouse/community center will be funded, in part, by the sale of 52 acres (3-parcels) to Taylor Morrison who will build single family detached homes on those parcels.

We have assembled a best-in-class Team of golf experts to help execute our Plan. The core Team members include Golf Course Architect, Forrest Richardson, Facilities Designer, Brian Curtis, Golf Course Manager OB Sports (a boutique division of Troon Golf) and Irrigation Specialists, Coates Irrigation.

Our current construction costs estimate to redevelop the course and construct the supporting Facilities is approximately $8-9 million dollars. We have agreed with Taylor Morrison to escrow 110% of these costs at the Taylor Morrison land closing to ensure performance and payment of the redevelopment Plan.

We have worked with our Team to create a proforma operating budget for the course. According to OB Sports, the current proforma financials are acceptable for the proposed development plan. The entire Team understands the importance of operations and long-term impact on sustainability. It is important like with most private companies, that certain aspects of the Plan remain confidential.

However, the Team has agreed to share certain confidential financial information with the HOA Board.

Q. Can you build fewer houses on the Parcels sold to Taylor Morrison?
We understand that the residential development component of our Plan is probably the most sensitive and personal issue for some. The (a) East Parcel is designed for 64 homes, (b) the Central Parcel is designed for 81 homes and (c) the West Parcel is designed for 17 homes.

The quantity and types of homes proposed for the three residential parcels have evolved over the past 3-months and are well-planned, well-buffered, appropriately-located, and needed for housing diversity and financial viability.

Taylor Morrison’s current site plans incorporate self-imposed elements including, all detached homes, enhanced perimeter buffers and trails, and single-story homes on the East Parcel. We believe these site plans balance the aforementioned traits with sufficient density to generate the land value needed to ensure performance and payment of the golf course redevelopment plan.

We selected Taylor Morrison for a reason and are confident in their ability to establish thoughtful solutions to reasonable neighborhood concerns. We encourage residents to continue providing Taylor Morrison with constructive feedback.

Q. Will you compensate Homeowners who paid a premium for a golf course lot?
No. Neither The Edge nor Taylor Morrison caused or are responsible for closure of the golf course and the resultant 162 acres of vacant dirt, dead/dying vegetation, and decayed irrigation system. Neither The Edge nor Taylor Morrison charged the lot premiums, or caused any decrease in value caused by the current dire condition of the 162 acres that was the golf course.

Instead, The Edge with assistance from Taylor Morrison (but without seeking financial contributions from the HOA or homeowners) is proposing and funding an $8-9 million viable solution that includes an 18-hole course, a community center, substantial buffers, and high-quality homes by a top-notch local homebuilder.

Approval and construction of that solution will benefit all homeowners within Club West – including those that are adjacent to the East, Center and West parcels that are identified for new Taylor Morrison homes and landscaped perimeter buffers.

It is unfortunate that golf courses like Club West are closing throughout the Country. However, we are confident that our Plan will have a positive impact on property values, both measurable and perceived, throughout the Community.

Q. How did you determine the Parcels to sell to Taylor Morrison?
The residential parcels were selected for four primary reasons; (1) re-routing of the course (2) reduction of turf, (3) access and (4) infrastructure.

Architect Forrest Richardson was instrumental in determining the new routing plan and maintaining cohesive flow of play, including 9 and 18-hole options, that aligns with the sustainability of the 50% turf reduction plan.

Finally, the selected residential parcels are the most viable parcel options that provide access to public infrastructure (water, sewer and streets). RCC Design Group assisted in the parcel selection process and Taylor Morrison’s land planning and civil engineers are in the process of confirming our initial utility and access findings.

Q. Will you disclose your financials to the community?
Certain elements of the Plan will remain confidential. Understanding that the Community wants to ensure sufficient funds are available to build and operate the Facilities long-term, we plan to share certain confidential financial information with the HOA Board.
Q. Will you disclose how much you are making?
We have invested hundreds of hours researching and developing our proposed redevelopment plan. In addition, we have invested significant monies putting the course in escrow and hiring our Team of architects, civil engineers, soil experts, tax experts, legal experts, golf course operation and management experts, and irrigation experts.

We spent the money knowing that there was a significant risk in the HOA, Community and City of Phoenix approval processes. We recognize some people believe that this is a “money grab” and that simply is not true. We certainly expect to earn a reasonable return based on our commitments and overall assessment of investment risk.

Our current proforma returns are based on the best available information today, but we expect these returns to vary throughout the Project approval and development process. Similar to specific aspects of the Business Plan, our return expectations will remain confidential other than certain elements that we will share with the HOA Board.

Q. Can I invest?
We are very encouraged by the number of neighbors asking to invest in The Edge. We will be able to address this once approvals have been granted. Therefore, not at this time, but possibly in the future. We have a small cohesive group that works well together.

As you can imagine, we have had to make many critical decisions over the past 6 months. Many of those decisions have been made after respectful debate. For the moment we are comfortable with the Team’s synergy and are not seeking additional Partners. Alternatively, we believe the most significant investment residents can make in the Project is to remain informed with Facts and exercise your vote.

If the project is approved by the HOA, we will explore possible investment options that may involve members of the community who want to invest. Part of what we would need to explore is whether or not offering such investments would be considered a “security” and the consequences of being considered a “security”.

Q. Do you all own homes in Club West?
Bill McManus has owned a home and lived in Club West for almost 20 years.

Matt Shearer owns a home in Club West and, since Jan 2020, splits his time between Club West and Superstition Mountain. Matt’s parents reside in the home during the winter months.

After 14 years, Keith Schott recently sold his home on Hole 6 but retains carry-back financing for the buyer. Mike Hare has lived in the Foothills for approximately 19 years.

Q. What is a Precision Course?

A “Precision Course” is a more modern description for what were once referred to as “Executive Courses,” a term coined in the 1960s to refer to a course that was less than “regulation” in terms of length, but longer than an all-par-3 course.

“Regulation” is a term reserved for courses with an 18-hole equivalent measuring anywhere from 5,800 to 7,000 or more yards. The original Club West layout was a regulation length 18-hole design. Generally, regulation courses have a par ranging from 68 to 72, although there is no set standard.

At Club West, the proposed layout retains four par-4 holes and one par-5 hole, with the balance being par-3 holes of varying lengths from 120 to more than 200 yards. The 18-hole experience (18-holes, 4,080 yards with a par of 60) will allow golfers to hit a variety of shots, including the challenging par-5, 11th hole, which is basically the old 12th hole.

The main concept of a Precision Course is to consume less land area, use fewer natural resources (water) while providing golfers a full golf experience in much less time. Because such courses involve several par-3 holes requiring accuracy as opposed to long drives, “precision” becomes a part of the theme.

However, the proposed design for Club West is not “target” golf. Instead, the new layout is actually fairly forgiving with large even greens, sufficient landing areas and minimal hazard/bunkers.

Q. Is Precision Course just another name for an “easy” pushover type of course?

Absolutely not. With multiple tees there is a flexibility for holes to play difficult or less challenging. Many of the same challenging holes of the original Club West will still be in play, yet with all new features, landscaping and re-established turf.

The serious golfer can still face long par-3 of more than 200 yards, the 500- yard long 11th hole and plenty of back tees where making par will be just as difficult as before.

Q. Can a Precision Course be profitable?
Yes, in fact there is a resurgence of such courses across the U.S. and internationally and there are many success stories. At present there are 970 courses in the U.S. that are of less yardage than “regulation length” courses.

These include par-3 courses, courses of less than 18-holes and precision courses. Some of the leaders in destination golf, such as Pebble Beach, Pinehurst, Bandon Dunes and Sand Valley, each have such courses in their collection or under development representing millions of investment dollars.

Pebble Beach has just hired Tiger Woods to completely re-create their short par-3 course into a new experience for seasoned golfers, casual players and families. Our proposed 18-hole course — 4,080 yards, par-60 — will take less time to play, and will be a major attraction to millennials, families and serious golfers who cannot always devote 5 or more hours to a round of golf.

Locally, Mountain Shadows at 2,000 yards does approximately 40,000 rounds per year. What’s more, with only 30 acres of managed turf area, the new Club West golf experience will consume far less water (a key financial aspect) and will cost less to maintain than the original layout.

All of these factors have been carefully weighed and considered in the design, including the exciting Community Area/Clubhouse relocated off of Chandler Blvd. The end result is a financial proforma that not only works, but is demonstrated to be sustainable.

Part of this long-term outlook is filling a missing element in the South Mountain Foothills area of Metro Phoenix where golfers do not have access to any alternative golf courses besides full length “regulation” courses. The new course will fill that need while attracting a diverse group of golfers including the serious player, casual golfers, families, seniors and people just looking “to have fun” in the span of a few hours.

Q. Can you build single level homes on the Central and West Parcels?
The proposed housing product for the Central and West parcels appeals to growing consumer segments providing privacy, indoor/outdoor living, and low maintenance lifestyle.

Utilizing this product allows for a more efficient use of land thereby providing for more open space which will allow for adequate density to generate the land value needed to ensure performance and payment of the golf course redevelopment plan.

This will establish sufficient HOA dues to maintain the parcel’s associated private infrastructure. As is shown on the plans, the homes planned on the central and west parcels are encircled with landscaped buffers.

Q. What Impact will the Proposal have on traffic?
It appears most residential concerns are directed toward the central parcel (Old Clubhouse Site) and its conversion from a commercial golf course operation to 81 detached single family homes.

Accordingly, the Team’s civil engineer is studying the potential impact to traffic volumes and associated levels of service. The results of this study will be made available once it has been completed.

It has also been suggested to add speed controls along 14th Ave. The Team is agreeable to working with the City Streets & Traffic Department during the Zoning Process to establish available measures.

Q. What impact will the Proposal have on the School system?
The team is coordinating with the Kyrene and Tempe School Districts to determine what, if any, impact the additional 162 residences will have on the local schools. Information obtained from the Kyrene School District provides that there is currently available capacity for over 300 additional students at Sierra Elementary and over 100 additional students at Altadena Middle School.

Information obtained from the Tempe Unified High School District provides that there is currently available capacity for approximately 100 additional students at Desert Vista High School, and that Desert Vista will admit all high school students living within Desert Vista’s boundary. In addition, there are also charter school and private school options available to families who opt for charter and/or private schools.

Anecdotally, given the community’s current population demographics and the schools’ existing capacity, the Proposal is not anticipated to have any negative effect on the schools and will certainly increase the tax base which helps public schools.

Q. What impact will the Proposal have on the Environment?
Redevelopment of the course will follow all required federal, state and local environmental regulations including those pertaining to storm water pollution prevention and dust control.

Additionally, the residential site plans respect and maintain existing drainage corridors while providing additional open space buffers that will be landscaped with native plants.

Finally, the Team has conducted a Biological Assessment of the site which determined that proposed redevelopment would have no effect on protected or threatened species in the area.

Further, redevelopment of the 162 acres will eliminate the existing dust issues with the vacant course and driving range.

Q. Can the course be converted to Open Space?
As we thought of potential alternatives for the course, we did consider the option of turning the course into open space. Given what we estimated to be the cost of converting the course to open space, we believed that the HOA or the City of Phoenix (as opposed to a private entity) would be in the best position to take on such a project.

It is our understanding that the City has shown no interest in the past or recently as there are a number of obstacles with the City acquiring the Property to operate a golf course or convert the Property to Parks/Open Space. The HOA does not have the authority to acquire the property.

Q. What guarantees does the Community have that additional homes will not be built on the remaining golf course parcels in the future?
The CC&Rs, zoning, access, infrastructure, parcel size, shape and location, topography, engineering requirements, etc. all make it nearly impossible and not economically feasible to build homes on the remaining 110 acres.

Further, we are amenable to the HOA establishing additional encumbrances to restrict future development of the remaining golf course parcels.

Q. Who will be managing the golf course?
The Course and Facilities will be professionally managed by third party operators with core competencies in golf management, food & beverage and Event Planning.

We have been consulting with OB Sports, a boutique division of Troon Golf. OB Sports is very interested in managing the Course and we will continue to explore other qualified Golf and Facility Managers.

Q. How many rounds of golf do you expect to sell annually and at what price?
In its proforma OB Sports has estimated selling 33,000 rounds of golf in Year 1 at an average cost per round of approximately $40.
Q. When will the Construction of the Golf Course and Clubhouse/Community Center start?
Once the sale of the land to Taylor Morrison is complete, we will start the process of finalizing construction plans and City permits to commence construction.

Our goal is to commence construction concurrent with Taylor Morrison’s land development process (estimated June 2021). Construction of the course will also depend on the optimum months to allow for the grass to grow in.

Q. Is there any way you can widen the buffers on the plans?
Most of the current buffers have resulted from prior land planning exercises with a goal of maximizing the buffers.

Future buffer adjustments will be limited as Taylor Morrison has set the current lot depths to its minimum for the proposed housing products.

Q. What amount do you need to keep in reserves?
We will have two “reserve” accounts. One to fund 100% of the project construction costs and one for operations. Currently, we anticipate having $8- 9 million in the construction reserve account and an operating reserve account in the amount to be recommended by OB Sports in accordance with industry standards.
Q. Do we have any say in plan changes after the initial plan is approved?
Yes. If the HOA and the Community votes to approve the Plan, Taylor Morrison will still have to go before the Ahwatukee Village Planning Committee, City Planning and Zoning Commission and City Council.

These are all public forums where residents can voice opinions. In addition, the HOA Architectural Review Committee retains certain approval rights regarding Taylor Morrison’s proposed homes.

Q. If the course is to be managed by Troon, would Club West members be able to use other Troon properties?
Although we are in discussions with OB Sports which is a division of Troon Golf, we have not yet finally selected a Golf and Facilities manager.

However, irrespective of whether it is OB Sports/Troon or another third-party management company, we will seek to be included in any third-party golf course management company’s reciprocal course program.

Q. Will Mr. Gee participate in any of the profits from the sale of the land to Taylor Morrison or the operation of the golf course and related facilities?
No.
Q. Are you in fact funding your “investment” in the course largely or entirely from the equity extracted from the abutting homeowners?
No, we did not cause the course to shut down and we did not/are not extracting any equity from any homeowners. We are using a large portion of the proceeds from sale of the Residential Parcels to Taylor Morrison to fund the construction of the golf course and clubhouse/community center.

We do not view this as an extraction of equity but rather a value enhancement to the Community once the course and Facilities are operational. As recent studies have shown, a fallow golf course robs property owners of appreciation and value which has and will continue to happen at Club West unless something is done with the course.

Q. How will the runoff from the east, west, and north be addressed, or should we expect it to come over/ through our walls and through our homes?
We do not anticipate any negative drainage impacts with regards to rerouting the course or developing the residential parcels. Our goal is to utilize as much of the existing drainage facilities as possible.

Any changes to the existing drainage will be designed by licensed engineers and approved by the City of Phoenix during the typical civil plan review process for Grading and Drainage.

Q. What change in Flood rating is expected as a result of the revised drainage?
None. The entire 162 acres is currently located in “Zone X” FEMA designation and will remain in “Zone X” post development.
Q. How will the design with only narrow runways prevent significant intrusion of these animals into the abutting backyards?
Wildlife typically use washes and drainage corridors for migratory purposes as the vegetation within them provide cover and shelter.

The site plans respect and maintain the existing washes and drainage corridors thereby allowing wildlife to maintain their current migratory patterns. Moreover, it is important to note that approximately 110 acres will remain as golf course/open space.

Q. Will development be able to continue after abutting homeowner start to liquidate their properties en-mass since the primary reason they have those lots are the views now to be eliminated?
Yes. We believe that revitalization of the course and creating new home buying opportunities will actually enhance all Community property values.

We expect new and resale home demand to accelerate during the development process and have the reverse effect of a “mass exodus”.

Q. Will the development still be viable and completed if the neighborhood comparable are running in the $275-$325 range?
We, like most local real estate experts, predict strong residential fundamentals for the coming years. We believe the local Ahwatukee/Foothills market will experience similar supply & demand fundamentals to support the residential as proposed.

It is also important to note that new homes typically demand a significant price premium ($/SF) over existing re-sale homes, particularly when the existing re-sale stock is over 20 years old. For example, the average re-sale price per square foot in the area bounded by 17th Ave, Chandler Blvd, Central Ave, and Liberty Ln over the last 12 months is $166/SF.

Whereas, the estimated average sale price per square foot in the West and Central Parcels is $202/SF, and the estimated average sales price in the East Parcel is $210/SF.

Q. What, if anything, do the prospective new golf course owners/builder plan to do to reimburse the current owners that have lots on the golf course for taking away a good portion of their home equity?

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Q. When would the course be open for play again?
That depends on a variety of factors including, but not limited to, when all the necessary HOA, Community and City approvals are obtained and the best time of year to plant new turf. Our goal is Q2 2022.
Q. When would they open the clubhouse/restaurant/bar?
That depends on a variety of factors including, but not limited to, when all the necessary HOA, Community and City approvals are obtained and the best time of year to plant new turf for the range and practice facilities. Our goal is Q2 2022.
Q. When will the new homes be developed and the course open?
That depends on a variety of factors including, but not limited to, when all the necessary HOA, Community and City approvals are obtained. Initial home deliveries are currently scheduled for Q2 2022
Q. Will the existing see-through metal fencing facing the new parcels be replaced by the builder with solid block privacy fencing?
It is expected that the existing residential perimeter fences will remain as constructed. The HOA Architectural Review Board and the City will dictate the construction materials for all new Builder walls.
Q. How will traffic be handled between the Central Parcel and Chandler?
Just like the drivers to/from the now boarded-up clubhouse and associated approximately 212 car parking lot used 14th Avenue for access, so will residents of the central parcel. 14th Avenue functions like a collector street south of Chandler Boulevard.

The Team’s civil engineer is studying the potential impact to traffic volumes and associated levels of service. The results of this study will be made available once it has been completed.

It has also been suggested we should consider adding speed controls along 14th Ave. The Team is agreeable to working with the City Streets & Traffic Department and adjacent homeowners during the Zoning Process to establish available measures.

Q. What are the forecasted annual gross revenues for the new Par 60 golf course, and how does this compare to what Club West was doing when it was open (reportedly about $2.0-2.2 million annually)?

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Q. What is the projected annual water cost in dollars for the new Par 60 course, and how does this compare to what Club West was spending when open (reportedly $700,000 annually)?

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Our Golf Architect and our Irrigation Consultant expect to reduce prior water costs by over 50% through the reduction of turf and construction of a new efficient irrigation system.

Q. What is the estimated sales price for the 3 housing parcels that Taylor Morrison might purchase?
As previously mentioned, this information along with certain elements of our Plan are and will remain confidential.
Q. Will the homes in the central and west parcels be zero lot line homes?
Yes, the homes in the central and west parcels will sit on one of their side property lines but will maintain a minimum of 10’ of separation (side to side). Once constructed this type of configuration is not easily discernable from a conventionally lotted product.
Q. On the East Parcel, will homes be higher than existing homes?
All of the proposed homes on the East Parcel will be single-story and limited to less than 30’ in height. Based on the East Parcel topography, homes are not expected to exceed the height of a single-story home in the adjacent neighborhoods.
Q. Will the new course be completed before the new homes?
Our current goal is to complete the golf course and clubhouse/community center in line with Taylor Morrison’s initial home deliveries (Q2 2022).
Q. Will buffers be grass or desert, and what type of plants/trees?
The buffer landscape pallets will be designed in accordance with current HOA and City of Phoenix design requirements which we expect will be a lush xeriscape theme consistent with Taylor Morrison’s commitment to use native plants whenever possible.

The HOA Architectural Review Committee will be active participants in the design process.

Q. What level of play/revenue will be needed monthly to pay the operating costs of running the planned golf course?
The AZ golf business is seasonal so monthly rounds can be misleading. Our Goal is to generate a minimum of 33,000 golf rounds per year.
Q. Was there research done to assess the market/ level of play that can be expected at this property?
We are currently relying on actual operating data from OB Sports/ Troon vs. anecdotal market information. While there is inherent risk in all new business plans, we have aligned with industry experts and are confident in their data and operational recommendations.
Q. What are the plans/ contingencies that have been explored should the course not get the level of play to sustain operations?
We expect the supporting facilities; food & beverage, practice facilities, putting course and the events pavilion to generate additional revenues to offset this risk.

We expect our facilities Mansger(s) to implement strategies to maintain profits within these operational categories.

Q. How will the watering of common areas (particularly the new planned 162 housing units) of the Property be paid for on an ongoing basis?
The new public Common Areas on the East Parcel will be constructed by Taylor Morrison and subsequently deeded to the HOA for ownership and maintenance.

The new Common Areas on the Central and West Parcels are private and will be maintained by the Central and West Parcels’ respective sub-associations.

Q. Who owns Club West Golf Course today and, in the future, according to the Proposal?
The course is currently owned by Hiro Investments, LLC, an entity managed by Wilson Gee. The Edge LLC will own the course once the sale from Hiro/Gee to The Edge is completed. The Edge will ultimately sell approximately 52 acres to Taylor Morrison.
Q. The proposal mentions that it will resolve the water issues regarding the golf course. How will this be done? Just through reducing the course size, reducing the percentage of the course covered by turf, and by a more efficient irrigation system, while still using expensive city of Phoenix water? Or are there still plans to pipe cheaper water in from a well on the Reservation or elsewhere? Or still hope that an aquafer suitable for a well might still be located on the site?

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Q. Will the construction of the homes require blasting? If there is blasting, will Taylor Morrison be responsible for any damage to the homes? During construction, would Taylor Morrison also be held responsible for any damage caused by construction equipment? Particularly if a large excavator is used and the vibration causes home damage?
We are in the process of completing our geotechnical studies. We believe all excavation can be completed with typical excavation equipment and methods without blasting.

While we do not expect damage to be caused to nearby homes, damage (if any) caused to homes during the course of construction will be the responsibility of the party that caused the damage.

Q. Has there been an environmental study performed to determine the increase in the amount of heat produced by these new housing developments?
Heat is not a typical component of an environmental assessment. However, the City of Phoenix has been studying heat island effects and ways to mitigate them.

For example, the City now requires street trees to be planted between sidewalks and streets in new developments to help provide shade and limit the absorption of heat.

Q. Will the natural barrier of the granite ravine (between the rear of homes in Lakeview Estates and lake area) be removed when the homes are built? This would create a potential flood plain for our home as during the 2018 storms the ravine became a river.
No. The current site plan has been designed so that the ravine remains as the primary course for drainage flows from the North to South.
Q. How are you going to keep dirt under control during building including noise?
Dust control and noise are regulated by Maricopa County and the City, respectively. Specific measures will be in place to maintain compliance throughout construction.

For example, the County requires us to submit a dust control plan and obtain a dust control permit, which it then inspects on a regular basis.

Q. What company or experts did you rely upon to determine the layout for the course re-design and home development? What other layouts were considered?

Forrest Richardson developed the current routing plan.

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Q. Prior to the vote, will homeowners be able to see specifics and when is it scheduled to close? (buffer spaces and home plat proposed)
The redevelopment Plan was introduced to the Public at the January 16 HOA Board Meeting. An additional Public Open House to discuss the Plan and ask the Team questions is scheduled from 6:30-8:00 p.m. on January 29th at Altadena Middle School in the Multi-purpose Room.

The Edge LLC Property acquisition date is contingent on both the HOA and Community Plan approvals. Our goal is to acquire the Property on or before April 15, 2020.

Q. Where will the entry to the east parcel be?
The East Parcel will have 2 entry points. One entry along Chandler Blvd and a second entry along Central Ave. The City Streets and Traffic department will determine the specific locations during the Civil Plan approval process.
Q. Since the presenters live on the golf course by holes 4, 6, and 7 why don’t they build by their houses?

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Q. What will be the number of homes on each parcel?
64 homes on the East Parcel, 81 homes on the Central Parcel and 17 homes on the West Parcel.
Q. Could the Community Center also have a small outdoor space? (park, playground) possible to include a small gym for people to join?
The Community Center will have outdoor public spaces. We are open to researching the possibility of adding a small fitness center.
Q. Will the new course be public, private, or semi-private?
The new course will be public. However, we are currently exploring with OB Sports various membership/marketing programs, particularly for local residents.
Q. Was the City asked to consider purchasing just the land that Taylor Morrison is going to build on?
It is our understanding that the City has shown no interest in the past or recently as there are a number of obstacles with the City acquiring the Property to operate a golf course or convert the Property to Parks/Open Space. The HOA does not have the authority to acquire the property.
Q. Will you make the real estate appraisal done by Ralph Brekan & Co available to the board and the members? Does it address the loss of property values for homeowners on holes that will be developed?
Approval and construction of the Proposal will benefit all homeowners within Club West including those that are adjacent to the East, Center and West parcels that are identified for new Taylor Morrison homes and landscaped perimeter buffers.

We are confident that our Plan will have a positive effect on property values, both measurable and perceived, throughout the Community. With respect to Mr. Brekan’s report, we will share the report with the HOA Board.

Q. What are the development qualifications for The Edge LLC and Taylor Morrison?

Mike Hare is spearheading the Golf Course and Facility land development/construction process. He has 30+ years experience acquiring and developing land parcels throughout the United States and has been active in the Phoenix markets since 1994.

This includes acquiring, developing and financing in excess of 40,000 residential lots. He has a strong working knowledge of the City of Phoenix entitlement and development processes, currently with 5 active City projects.

Similar to its planning process, The Edge LLC will align with best-in-class general contractors and subcontractors to execute construction of the Golf Course and Facilities.

Taylor Morrison plans and develops inspired communities in 20 markets in 9 states throughout the country. Locally, Taylor Morrison acquires, plans and develops approximately 2,000 lots per year, making it a top 3 builder in the Phoenix market.

Taylor Morrison prides itself on the diversity of its communities, ranging from large master plans like Sky Crossing (Phoenix) and Adora Trails (Gilbert), to small infill sites like North 70 (Scottsdale) and Shadow Rock (Tempe).

Taylor Morrison also has a reputation for successfully executing on the most demanding development projects such as Sonoran Gate (Phoenix) and Promontory at Foothills West (Phoenix).

Q. Would you modify your proposal for the “Central Parcel” (and possibly the West Parcel) to be developed as you have planned for the East Parcel. Single story homes, 2,700 to 3,400 sq. feet, priced at $625K to $657K to replace the much smaller, less costly and densely packed homes on the current plan? This modification is critical to gaining support from the homeowners who are concerned about: congestion, existing property values and appearance in the area?

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Q. What guarantees do we have that the golf course would be developed and operated after the sale of parcels to Taylor Morrison for new home builds? Would The Edge LLC principles be willing to post a bond or put the development money for the course in escrow until the new course is built and is operational to provide that guarantee?

This concept is already required in our Purchase and Sale Agreement with Taylor Morrison. The Edge LLC is required to escrow 110% of the estimated cost of the redevelopment Plan.

We currently estimate the escrow amount will be from $9-$10 million.

Q. Will there be any other visual obstructions (nets, walls, fences, etc.) placed on the golf course or the driving range?

No visual obstructions are currently planned by The Edge for the Golf Course and Driving Range.

However, the existing CC&Rs may allow individual homeowners to install such obstructions if they choose to do so and their plans are approved by the HOA Board.

Q. Just want to be able to trust your group. Will you simply share your financials for transparency? Also, will the clubhouse be public? Can it be used for events for profit? Will you be active in the community? Will non-profits be able to use for free? Will you support charities?

Many questions of a similar nature have been asked and answered throughout this Q&A. Please read the entire Q&A and contact us for any clarification. Thanks.

Yes to everything else.

Q. What’s beneficial in The Edge’s Plan for me as a homeowner in Club West?

There are numerous benefits including, for example:

  1. The three-year battle and uncertainty over the golf course will be permanently solved.
  2. Club West’s open space will be restored.
  3. Property values will be protected.
  4. The Edge’s Team is committed for the long haul in Club West.
  5. The new Plan improves the appearance and ambiance of our community.
  6. One-time approval of 162 high-quality single-family homes will help to fund the golf course modernization and protection from additional homes in the future.
  7. The new golf course and family-oriented Community Facility will be welcoming, go-to venues.
  8. Club West’s water problem will be solved.

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