Huachuca City buys former strip club to settle lawsuit

Former Dusk Till Dawn Cabaret (courtesy photo)

Town denied company a 2017 adult-oriented business license despite past issuances

By Terri Jo Neff

Huachuca City, Arizona – The town of Huachuca City is about to become the owner of a former strip club after the council settled a lawsuit over its denial of a 2017 adult-oriented business license to the Dusk Till Dawn Cabaret.

The council has authorized the purchase of two parcels from ME Management LLC, including a 3,143-square-foot building and an adjacent vacant lot off State Route 90. The $300,000 purchase price is in line with market value of the parcels, sources close to the case say. Huachuca City is located in western Cochise County, about 20 miles south of Benson and 8 miles north of Fort Huachuca and Sierra Vista.

The settlement was reached during court-ordered mediation and “is in the best interest of Huachuca City and its residents,” according to a resolution adopted by the town council in April. It resolves all claims made by ME Management, which sued after being denied a 2017 adult-oriented business license for Dusk Till Dawn even though it was granted the same license in 2012 to 2016.

According to court records, state law requires such businesses to be located at least 1,320-feet from homes, schools, daycares, churches, and playgrounds. But several homes are located in the buffer zone around the strip club, which the town clerk cited as grounds for denying the license in 2017.

Public records show the town adopted a commercial code more than a decade ago that didn’t prohibit homes in the buffer zone. As a result, various businesses applied for, and the town issued, licenses for strip clubs even though municipalities don’t have authority to make such changes. The town’s code has since been revised to comply with state law.  

ME Management sued in Cochise County Superior Court hoping a jury or judge would force the town to issue the license based on the company’s good faith reliance on prior town actions. But over time the focus turned toward compensatory damages for lost revenue and diminution of value.

The settlement calls for escrow to occur by Oct. 11 although town officials haven’t disclosed how the purchase will be funded. The town recently approved a bid for a Phase One Environmental inspection.  

The agreement does not include the Class 6 liquor license which had been utilized at Dusk till Dawn. That license is owned by Tucson-based GDOC LLC which is not a party to the lawsuit.

Some council members have mentioned a hope that the town can quickly sell the property. If so, it will join a 7,000-square-foot former store and a shuttered VFW hall as large commercial properties for sale or lease in the town.  




Rent Dispute at Plaza Vista Mall in Sierra Vista prompts Lawsuit

Plaza Vista Mall in Sierra Vista, AZ (Photo by Terri Jo Neff)

At issue: Does 2 specialty stores equal 1 Walmart 

SIERRA VISTA, Arizona – A rent dispute at the Plaza Vista Mall Shopping Center has prompted a lawsuit that highlights how the loss of Walmart six years ago impacted one of the mall’s smaller longtime tenants. Plaza Vista Mall, which has nearly 230,000 square feet of retail space, is located at the northeast corner of Highway 90 and Charleston Road.

The mall opened in 1988, and for years Walmart and JCPenney were the two “major anchor tenants,” which are high-traffic, high-profile stores that help attract shoppers to a mall’s smaller retailers. In 2007 discount department store Ross replaced JCPenney. Then in November 2010, Walmart left for a larger, stand-alone building across the street at the Charleston Crossing Mall.

Walmart’s departure left Ross as Plaza Vista’s only anchor tenant of a dozen remaining stores that include Payless Shoes, Dollar Tree, and Daniel’s Jewelers. Another of the stores is Cato Fashions, which had been leasing at the mall since 2003.

Cato’s lease contains an “inducement provision” which permits the women’s fashion retailer to abate (reduce) its monthly rent by 50 percent “during any period of vacancy by either one of the Major Anchor Tenants.” Cato began submitting rent checks for only $2,032.03 per month effective November 2010.

However, a lawsuit filed by 629 Sierra Vista Retail LLC of Delaware, the landlord of Plaza Vista Mall, claims Cato is in breach of contract of its lease. The landlord asserts that “any inducement or other co-tenancy requirement” has been satisfied since early 2014 when Hobby Lobby and C-A-L Ranch started sharing the 127,000 square foot space vacated by Walmart.

The landlord’s civil action filed July 19, 2016 with the Cochise County Superior Court seeks a finding that Cato must begin paying full monthly rent of $4064.06, as well as back rent, interest, attorneys’ fees, and court costs.

Sale of shopping center prompts demand for full rent

The rent disagreement flared up in early 2016, shortly after Plaza Vista was sold to an investment group headed by Friedman Integrated Real Estate Solutions of Michigan.  An attorney for the landlord commanded Cato submit full payment of rent, a demand which Cato rejected. Subsequent efforts to resolve the issue without legal action were unsuccessful.

A counterclaim filed August 24 by current lessee Cato Wo and parent company Cato Corporation based in North Carolina alleges the landlord has “failed to satisfy the requirements” of the inducement provision by not having two major anchor tenants. Cato asserts that neither Hobby Lobby (an arts and craft store) nor C-A-L Ranch (a ranch lifestyle and supply store) meet the criteria of a major anchor tenant, individually or as a set.

According to Cato’s counterclaim, the previous landlord “did not challenge Cato’s payment of reduced rent from November 2010 through January 2014.” Then, after the lease was renewed in February 2014, the landlord did not challenge Cato’s continued abated payments even though Hobby Lobby and C-A-L Ranch had opened for business in the old Walmart space.

The inducement provision also allows Cato to cancel the lease if a major anchor tenant vacates the mall and is not replaced within 12 months “by a single tenant open for business and operating exactly the same type of retail business” in all of the space. The lease states Cato’s election of one remedy “shall not preclude its exercise of any other remedy.”

The lawsuit is currently in the discovery process with depositions of key witnesses expected over the next several months. The parties have until September 25 to participate in private mediation in hopes of resolving the matter without trial.  If the case is not settled by then, judge Karl Elledge will preside over a three day trial in early 2018.

The mall owner is represented by Jonathan Saffer of Snell & Wilmer in Tucson. Sierra Vista attorney Joel Borowiec and North Carolina attorney Michael Montecalvo are representing the Cato defendants.

Contact reporter Terri Jo Neff at 520-508-3660 or cjw_media@yahoo.com




Progress at The Villages at Vigneto Masterplan Benson AZ

The Villages at Vigneto logo (courtesy photo El Dorado Holdings)

El Dorado’s Masterfully Planned Community promises a “Whatever you want you can have” Lifestyle

BENSON, Arizona — A group of 70 business and government leaders from across southeast Arizona  gathered Tuesday at the Cochise College in Benson for an update on The Villages at Vigneto residential and commercial masterplan project planned for northwestern Cochise County. The project is being developed by El Dorado Holdings, the company that spearheaded the growth of what is now the City of Maricopa.

Villages at Vigneto will be built along both sides of State Route 90 in Benson south of Interstate 10. The plan is for 28,000 homes, five golf courses, restaurants, shops, and more than two dozen activity centers and community facilities over a 20 year build out. Two-thirds of the project’s 13,000 acres are located on the east side of State Route 90

Mike Reinbold, development partner with El Dorado Holdings, estimated that it will take about 18 months for completion of horizontal construction such as roads and utilities after which vertical construction of homes and community facilities can begin. Reinbold said he is still confident that some homes will be on the market in 2018, a prediction he made in January at a meeting of the Southeastern Arizona Contractors Association.


During the March 14 meeting Reinbold also premiered a five minute video that overviews the project’s “Tuscan Territorial” concept.
The video likens the Vigneto lifestyle to the American Dream, noting that “whatever you want you can have” within the Vigneto community.

Reinbold also updated the attendees about the Whetstone Ranch Canyons development located on the north end of El Dorado’s property. Approximately 50 homes were built by the previous developer with plans for a few hundred more. That project is being worked into El Dorado’s plans for Vigneto, according to Reinbold, and will concentrate on more family-style homes and amenities. New construction of homes at the Canyons could begin within 90 days once El Dorado breaks ground on Vigneto.

El Dorado has “the experience, financial strength, and will” to develop the Vigneto “lifestyle” project in a manner that is both environmentally responsible and water-wise, Reinbold explained. The Vigneto project has maintained a high level of community support, he noted, by addressing questions “with straight forward answers and facts.”

One pending issue for El Dorado is how quickly the U.S. Army Corps of Engineers will reinstate a Section 404 permit the agency put on hold last year.  The permit was issued in 2006 for the now-defunct Whetstone Ranch project, which encompasses nearly three-fourths of El Dorado’s property.

A handful of environmental groups filed a lawsuit last May asking a federal judge to order the Corps to consult with the U.S. Fish and Wildlife Service to ensure species protected under the Endangered Species Act “are not jeopardized and critical habitats are not adversely modified or destroyed” by development of Villages at Vigneto.  Proceedings in the federal action have been stayed by Judge Cindy Jorgenson allow time for the consultation to take place between the Corps and FWS.

Reinbold, who is meeting with the Corps on a regular basis for updates, believes there is already “a change of federal government philosophy” since the new president was inaugurated.

While the Corps and FWS address the consultation, Reinbold says El Dorado is moving forward with final planning of the project’s first 750 acres. Engineers are on-site, utilizing a grid system in place across the property to digitally design the main Village Center, a recreation center, and the first home sites.  However, Reinbold declined to comment about what steps would be taken if the Section 404 permit is not in hand by the time Vigneto’s engineering plan is approved by the City.

Meanwhile, Benson city manager Bill Stephens confirmed after the meeting that city staff is ready to review El Dorado’s final design and engineering plan for the first phase once it is submitted.  “We are looking forward to the next step” said Stephens.

Reinbold encourages anyone interested in obtaining updates about Villages at Vigneto to sign up for email updates at www.vignetoaz.com.