SIGNED CSRL FOR TX15-245 AND TX17-105.PDF

225 WEST MADISON
PHOENIX, AZ 85003
WWW.MARICOPACOUNTYATTORNEY.ORG

PH. — (602) 506-8541
FAX (602) 506-4317

Marteopa County Attorney

ALLISTER ADEL

September 10, 2020
Via Electronic Mail

Paul Moore

Bart Wilhoit

Mooney, Wright, Moore, & Wilhoit, PLLC
1201 S. Alma School, Ste 16000

Mesa, AZ 85210

RE: TX2015-000245, TX2017-000165— TTLC AHWATUKEE LAKES INVESTORS LLC
Dear Paul and Bart:

This letter is a settlement communication written in accordance with Rule 408 of the Arizona
Rules of Evidence, is not admissible in any court proceeding or pleading in these matters, and
replaces and supersedes any previous recommendation on settlement.

Our client, the Maricopa County Assessor’s Office, has reviewed the information in the above-
referenced cases and has authorized us to make the following conditional settlement recommendation
(“Recommendation”). This Recommendation replaces and supersedes any previous recommendation
issued by this office. These lawsuits concern the tax years 2015, 2016, and 2018 valuations of, and
penalty assessed under A.R.S. § 42-13154(D) for, parcels identified as follows: 301-58-782J and 301-
58-785A (“Subject Property”).

Named Plaintiff in the above-referenced cases, TTLC Ahwatukee Lakes Investors, LLC, and
ALCR, LLC, have represented to the County, through you, that they are the only real parties in
interest to the Subject Property and any claims raised in the above-referenced tax cases; that ALCR,
LLC is the current owner of the Subject Property, and that all rights to the Subject Property and any
and all rights asserted by TTLC Ahwatukee Lakes Investors, LLC and the entities from which it

purchased the Subject Property (including, without limitation, any rights claimed through or in

TX2015-000245; TX2017-0001@5
September 10, 2020
Page 2 of 5

connection with the above-referenced cases) have now been assigned to, and remain vested in,
ALCR, LLC. TTLC Ahwatukee Lakes Investors, LLC and ALCR, LLC, and ALCR, LLC’s
successors and assigns shall hereinafter be referred to as the “Plaintiff Parties”. The Assessor’s
Office recommends establishing the amount of the aggregate penalty for the Subject Property for
the ten years beginning tax year 2004 through tax year 2013 (the penalty associated with the
conversion of the subject property from golf course use, pursuant to A.R.S. § 42-13154(D)) at
$500,000. Within 90 days of the approval of this contemplated settlement by the County’s Board
of Supervisors, ALCR, LLC and/or its successors-in-interest to the Subject Property shall cause to
be paid to the County the said reduced penalty of $500,000, with interest thereon at the rate of
$6,666.50 monthly from November 2, 2015 until paid. All taxes, liens, and penalties on the Subject
Property in connection with the subject tax years, including, without limitation, the penalty pursuant
to A.R.S. § 42-13154(D), and all interest to be paid by any of the Plaintiff Parties, are and remain
secured tax liens on the Subject Property and are not discharged until all payments by ALCR, LLC
and/or its successors-in-interest to the Subject Property under the settlement contemplated herein
are made in full pursuant to Arizona law. After said payment is made to the County, the County
will pay the remainder of the certificate of purchase of the lien for the penalty for the 2015 tax year,
and will reduce the Subject Property’s full cash value as follows: the full cash value of the Subject
Property for tax year 2015 shall be reduced from $12,675,420 to $4,500,000; the full cash value of
the Subject Property for tax year 2016 shall be reduced to $4,500,000; and the full cash value of
the Subject Property for the 2018 tax year shall be reduced to $2,035,300. The limited property
value of the Subject Property for each subject tax year will be calculated pursuant to A.R.S. §§ 42-
13301 — 42-13304 as applicable.

In the event any of the Plaintiff Parties has paid less than 100% of any subject tax year’s taxes, that
entity’s refund for that year will be limited and equal to the percentage of that subject tax year’s
taxes that it overpaid, plus statutory interest as set forth in the following paragraph. Mooney,
Wright, Moore, & Wilhoit, PLLC represents the Plaintiff Parties, and undertakes to receive in trust

the payment of any refunds hereunder and to distribute them appropriately among the Plaintiff

TX2015-000245; TX2017-000165
September 10, 2020

Page 3 of 5

Parties. After entry of judgment, the Treasurer’s Office will calculate the amount of a tax refund

for the 2015, 2016, and 2018 tax years, if any, with interest thereon at the applicable legal rate

pursuant to A.R.S. § 42-16214(A)(3) payable from the date of overpayment until the judgment is

paid in full.

The reduced full cash values as contemplated herein shall apply to the stated tax years in question

and shall not “roll” to subsequent tax years pursuant to the provisions of A.R.S. § 42-16002. These

recommendations are made as a risk management decision by the County.

This Recommendation is conditioned upon review and approval by the Board of Supervisors, A.R.S. §

11-251(14) and is void in the event the Board of Supervisors does not give its approval.

This Recommendation is also subject to the following terms and conditions:

1,

Each party will bear its own attorneys’ fees and costs.

Each of the Plaintiff Parties and each of their members, managers, successors, and
assigns, waives any and all other claims it may have with respect to the assessment,
valuation, classification, penalization, and taxation of the subject property for the subject
tax years, including, but not limited to, claims pursuant to A.R.S. § 42-11005 and claims
pursuant to A.R.S. §§ 42-16251 to -16259. Without limitation, said entities waive any
claim that any penalties previously assessed against the Subject Property under A.R.S.

§ 42-13154 are excessive, untimely, unenforceable, or contrary to any applicable law.

This settlement Recommendation and any judgments entered pursuant to it do not
constitute an admission to any factual or legal theory, and are made solely for the
purpose of compromise and dispute resolution; they may not be used for any purpose

other than settlement of the claims directly addressed herein. It is the intent of the

TX2015-000245; TX2017-0001@5
September 10, 2020
Page 4 of 5

County and the Plaintiff Parties to resolve by the contemplated settlement all claims
arising out of the assessment, valuation, and taxation of the Subject Property, and out of
penalties associated therewith pursuant to A.R.S. § 42-13154, in connection with the

subject tax years.

The Plaintiff Parties may only agree with the terms and conditions of this Recommendation and
authorize its submission to the Maricopa County Board of Supervisors in whole and may not agree with
the terms and conditions of this Recommendation and authorize its submission to the Board of

Supervisors in part.

If this Recommendation meets with the approval of your clients, please sign the Authorization on the
last page of this letter and return it to our office. After receipt of that Authorization, we will ask the
Assessor’s Office to prepare a recommendation, which will be submitted to the Board of Supervisors
for its review and approval. If the Board of Supervisors approves the recommendation, we will send

you a copy and contact you about lodging a judgment.

Should you have any questions, please feel free to contact me. Please note that my direct telephone
number during COVID-19 pandemic out-of-office practice is (602) 214-2045 (though e-mail is usually
better, especially given the undersigned’s extremely-heavy hearing schedule). We hope that this matter

will be amicably resolved.

Sincerely,

Allister Adel
MARICOPA COUNTY ATTORNEY

by___/s/ Louis Comus III
Louis Comus III

Deputy County Attorney
Attorneys for Defendant Maricopa County

TX2015-000245; TX2017-000145
September 10, 2020
Page 5 of 5

ce: Stephanie Wolfe, Litigation/Paralegal Supervisor

AUTHORIZATION

My clients, TTLC AHWATUKEE LAKES INVESTORS LLC, ALCR, LLC, ALCR, LLC’s successors-
IN-INTEREST, AND ALL OF THEIR MANAGERS, MEMBERS, SUCCESSORS, AND ASSIGNS, agree with the
terms and conditions of the proposed conditional settlement recommendation and authorize its
submission to the Maricopa County Board of Supervisors.

Dated this 4 day of Septerbe 2020.

One WRIGHT MOORE AND WILHOIT, PLLC

Pat Mdoré )
Bart Wilhoit

Attomeys for Plaintiff and Plaintiffs successors-in-interest to
the Subject Property, including, without limitation, ALCR,
LLC.