By: Terri Jo Neff, originally published in the Cochise County Record
Developer: County staff had previously confirmed that the Tentative Plat satisfied all of the County subdivision regulations
BENSON - On July 8, the developer of the planned J6 Ranch gated community west of Benson filed a civil lawsuit against Cochise County and its three board supervisors in a dispute about a 2015 vote that has stalled the 556-acre project.
The central issue of the 7-count complaint filed in Cochise County Superior Court and served on the county by property owner Easter Mountain Ranch LLC (EMR) is the interpretation of a condition the board added to a 2011 rezoning approval that requires EMR to provide public access to nearby federal lands.
The Superior Court came just two weeks after the board convened a special executive session to consider an agreement proposed by developer EMR that would have prevented court action while the County Attorney’s Office tried to resolve the access issue.
EMR’s property, which is located on the south end of J-Six Ranch Road, abuts the Coronado National Forest (CNR) on the north side of the Whetstone Mountains, in an area that has long been looked at for establishing public access.
After the board approved rezoning the property from RU4 to RU2 (allowing smaller lot sizes), county staff prepared an “Acceptance of Conditions” document that spelled out the terms of the condition. It reads “Prior to plat approval, the Applicant (Easter Mountain Ranch LLC) must provide either on-site or off-site multi-purpose (vehicle, pedestrian, equestrian, etc) legal access to federal lands.”
EMR and the county signed the document, which was then filed with the County Recorder’s Office. Since then, the developer has moved forward with plans for the first phase of the project, which includes lots 1-42. They also secured an easement from a nearby property owner that would allow for access to the CNF.
However, on July 14, 2015 the board denied EMR’s application for a subdivision tentative plat for those initial lots because the board was not satisfied with the developer’s forest access plan. A second easement proposal addressing the access requirement was also rejected by the county.
In a recent phone interview, EMR’s development manager Duff Hearon explained that EMR started planning the J6 Ranch project “a decade ago” and he has been frustrated by the drawn out process “which normally should only take two or three years.”
Without the board’s approval, the developer must redesign the entire project to include only 139 homes under the old zoning instead of 278 homes under the new zoning.
LAWSUIT SEEKS APPROVAL OF 278 HOME DESIGN, MONETARY DAMAGES
Hearon added that “we would have dropped our $10 million claim if the board had agreed to approve our plat,” and he points to the fact that he held off authorizing the lawsuit until a week prior to EMR’s one year deadline.
“We knew it will be costly for the county to defend, and the monetary damages could be devastating for the taxpayers, so we waited,” Hearon said. “But ultimately we had to preserve our rights and protect our partners.”
Britt Hanson, the county’s chief civil deputy attorney, confirmed that his office will handle the civil lawsuit because “our insurer doesn’t cover liability for land-use decisions.”
According to the complaint, the county’s July 2015 denial of EMR’s proposed plat was “arbitrary, capricious and an abuse of discretion.” It adds that the developer has “spent considerable time, effort, resources and money” to ensure “complete compliance” and has “satisfied and fulfilled all of the requirements” of the rezoning conditions.
The complaint also alleges violations of the Arizona Property Rights Protection Act that have caused the developer significant financial costs and future losses. If the case goes to trial, EMR will ask the jury to award “actual and consequential” monetary damages, as well as attorneys fees and other costs.
In addition to financial damages, EMR is seeking an order from judge Wallace Hoggatt that the county approve the tentative plat so the developer can move forward with lots 1-42, and an order providing EMR an extension of any deadlines they face on the project.
OFFER TO RESOLVE DISPUTE FILED IN JANUARY, REJECTED IN FEBRUARY
“We have been trying in good faith to resolve the forest access for a very long time,” explained Hearon, adding that the board is requiring a level of public access not specified in the signed 2011 agreement.
In Jan. of this year, EMR submitted a notice of claim to the board clerk seeking $10 million in damages to resolve the dispute. That figure, according to Easter Mountain attorney Steven Lenihan, represents lost profits for building only 139 homes and other costs the developer has occurred, including attorney fees.
A notice of claim is required under state law before a public entity can be sued.
The county rejected EMR’s claim in Feb., but emails released by the county attorney’s office reveal efforts have been ongoing for months to identify potential routes that could satisfy the board’s interpretation of the 2011 access condition.
THE HOLD-UP: APPROVED PUBLIC ROUTE TO NATIONAL FOREST
Those emails show Hanson of the county attorney’s office has been in frequent contact with Arizona Game and Fish Dept. and US Forest Service to work toward a deal for an easement on land owned by El Dorado Holdings, the developer of the 12,000 acre Villages at Vigneto project in Benson.
That property abuts the east side of the Whetstone Mountains and could provide an access road off State Route 90 that would eventually connect to existing Coronado National Forest roads.
As recently as June 2, Hanson advised top county officials that “it looks as though the forest access issue is going to be resolved, with the County, Game and Fish and the Forest Service working with Mike Reinbold (El Dorado).”
Included in that email was a communication from Matt Walton of AZGF stating “a feasible route” had been identified and was currently “under review by El Dorado.” That route was flagged by USFS road manager Walt Keyes after several stakeholders took a walking tour of the property to look at access options.
District 3 supervisor Richard Searle, who represents the J-Six and Benson area, shared the June 2 update with EMR, which Hearon says is another reason he held off as long as possible before filing the court action.
“We kept hearing from the county that ‘we’re close’ to a resolution, but without clear communication we are left with no option but to move forward with a lawsuit,” he explained.
“STOP THE CLOCK” PROPOSAL REJECTED
While Hanson continued working toward a deal for CNF public access via El Dorado Holdings, the statute of limitations clock continued to tick for Easter Mountain Ranch. Under Arizona law, a party normally has a deadline of one year from the date damages first occur in order to file a court action.
With the one year anniversary of the July 14, 2015 vote approaching, Lenihan proposed a tolling agreement with the county. A tolling agreement is a legal maneuver that freezes the statute of limitations clock, allowing parties additional time to resolve issues or disputes without worrying about the calendar.
If a resolution cannot be worked out during the tolling period, the amount of days the agreement was in place does not count toward the deadline for filing a lawsuit.
Chief (civil division) deputy county attorney Hanson originally turned down the tolling agreement but the matter was later considered by the board in a special meeting on June 21. Although minutes of the executive session are not public, Hanson explained that the county declined “to sign the tolling agreement because we think the lawsuit has no merit.”
With the developer’s one year clock winding down and no tolling agreement in place, Hearon said he authorized legal action as a “last resort.”
When asked about the decision to forego the tolling agreement, supervisor Searle replied that he is prevented by state law from commenting on the matter. He referred any questions to Hanson, who responded that “nothing has changed” from the county’s previous position that EMR’s claims are without merit.
The county has until Aug. 1 to file an answer to EMR’s complaint.