The operator of the Denver, Colo., property wants to buy the course from owner Clayton Early Learning for around $21 million, the same terms announced last fall when the city expressed interest in purchasing the property. Arcis currently has a “right of first refusal” if the course is ever sold, but is locked in a lawsuit with Clayton over what constitutes that right.
Arcis Golf, which runs Park Hill Golf Club in Denver, Colo., said it is willing to match the price discussed last fall when the course’s owner announced a deal that is now up in the air to sell the land to the city, BusinessDen.com reported.
Scott Siddons, general counsel for Arcis, said the company wants to buy the course from owner Clayton Early Learning for around $21 million—the same terms announced last fall with the city. “We always prefer to own the land,” Siddons said. “That’s our business model.”
According to the terms of Arcis’ and Clayton’s current lease, which comes up for renewal at the end of June, Arcis pays $700,000 a year in rent and has a “right of first refusal” if the course is ever sold, BusinessDen.com reported.
Arcis and Clayton now are locked in a lawsuit over what constitutes a right of first refusal, BusinessDen.com reported.
The city announced in September that it had reached a deal to buy the course for a one-time payment of $10.5 million with $350,000 paid per year for 30 years, and a cut of any land sale that might come later if the land is sold to developers. The deal was put on hold in September, BusinessDen.com reported.
Arcis sued Clayton last month, saying it was never given its right of first refusal. Clayton has countered that Arcis’ right hadn’t kicked in yet, because the announcement involving the city was a proposal, not a “bona fide” signed offer, BusinessDen.com reported.
Siddons said Arcis wants to own the land and run it as a golf course for the time being. “If (Clayton) are willing to sell it to the city on those terms, why wouldn’t they sell it to us on the exact same terms?” he said. “Clearly, they would rather have the city in the deal for some reason.
“I’m giving them the same deal financially,” Siddons said. “If it’s about funding the Clayton Foundation, why wouldn’t they take my money just like the city’s money?”
Clayton CEO Charlotte Brantley said Arcis could not meet some terms of the announced deal, such as changing any of the uses from golf to something else. Only the city can change the use, she said, and Clayton would reap 75 percent of any land sale up until the deal reached the $24 million threshold, BusinessDen.com reported.
Clayton and the City of Denver have a previous agreement that lets Clayton avoid paying taxes on the golf course in exchange for designating it open space or golf, Brantley said.
“That is a contract between two parties,” Brantley said. “And only we, as parties of that contract, can change it. Arcis can’t walk in and strike a deal with the city to remove use restrictions.”
This is not the first time Arcis and Clayton have negotiated over the “right of first refusal.” Siddons said that in 2015, when the course was struggling, Arcis asked for a rent reduction from $700,000 a year to $400,000 a year. In exchange, Siddons said, Arcis was willing to give up its “right of first refusal.” Clayton rejected the offer, BusinessDen.com reported.
“We were not prepared to take that kind of hit on the budget,” Brantley said.
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