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PHOENIX AREA 1400 East Southern Avenue, Suite 400 Tempe, Arizona 85282-5691 T 480-427-2800 F 480-427-2801 Edward D. O’Brien, Esq. Licensed in Arizona e-mail: ed.obrien@chdblaw.com direct: 480-534-4421 Phoenix Prescott Tucson www.chdblaw.com T 800-743-9324 F 800-743-0494 August 14, 2024 VIA U.S. MAIL AND EMAIL City of Chandler Real Estate Administrator c/o Erich Kuntze RealManage - Vision Community Management P.O. Box 4008, MS 407 Chandler, AZ 85244-4008 erich.kuntze@chandleraz.gov Re: Cooper Commons Community Association City of Chandler Purchase Inquiry Dear Mr. Kuntze: This firm represents Cooper Commons Community Association (“Association”). The City of Chandler (“City”) Real Estate Administrator’s Office has asked the Association to consider selling, to the City, a parcel of undeveloped Common Area property to the City for use as a new well site. 1. The Parcel The parcel is Maricopa County Assessor Parcel 303-84-617, which is Tract B of the Association-owned Common Area, which the Association owns pursuant to the June 15, 1999 Deed recorded at Maricopa County Instrument No. 1999-0573026 (“Tract B”). Tract B is a parcel of undeveloped desert between the well site and the Association’s park at Hunt Highway and Cooper Road. The Plat Map, at Maricopa County Book of Records 504, Page 43, provides for a 20’ Drainage Easement, serving the City’s well site. The Association has not developed Tract B because it cannot be used for any purpose other than to serve the well site. The City issued a letter dated July 24, 2023 that provides Tract B will develop and serve the well site, if the City purchases it. In addition to the Plat Map, the Association’s governing documents run with the land of Tract B. CHDB LAW, LLP COOPCOM.0038 August 14, 2024 Page 2 2. The CC&Rs All Association real property, including Tract B, is subject to the terms and requirements of the Declaration of Covenants, Conditions, Restrictions, Assessments, Charges, Servitudes, Liens, Reservations and Easements for Cooper Commons (“CC&Rs”). Tract B is also subject to a Tract Declaration, but the Tract Declarations do not appear to provide any obstacle to a sale. The CC&Rs provide that the Association has authority to sell Tract B to the City, but a vote of all Association Members (the 1,630 lot owners) must vote to approve such a sale. Article III, Section 3.1(c) of the CC&Rs provides the Association with authority to sell Tract B, as a parcel of Common Area, to the City. Section 3.1(c) provides: Section 3.1. Easements of Enjoyment. Every Owner and Tenant and other Member of the Association shall have a right and easement of enjoyment in and to the Common Areas which shall be appurtenant to and shall pass with the title to every Lot and Parcel, subject to the following provisions: . . . (c) The right of the Association to dedicate or transfer all or any part of the Common Areas to any public agency, authority, or utility company for such purposes and subject to such conditions as may be agreed to by the Association. Unless otherwise required by zoning stipulations or agreements with the City of Chandler effective prior to the date hereof or specified on a Recorded subdivision plat, no such dedication or transfer shall be effective unless approved by the Owners representing at least 75% of the votes entitled to be cast by each class of membership, except that the Board shall have authority to transfer to such public agencies, authorities or utility companies easements and rights-of- way which are intended to benefit Cooper Commons and which do not have any substantial adverse affect on the enjoyment of the Common Areas by the Members. Article XV, Section 15.13 of the CC&Rs provides: Section 15.13. Conveyance or Encumbrances of Association Land. The Association Land shall not be mortgaged, transferred, dedicated or encumbered without the prior written consent or affirmative vote of the Class B Membership and the affirmative vote or written consent of the Owners representing at least two-thirds (2/3) of the votes in Class A Membership. Both Sections 3.1(c) and 15.13 of the CC&Rs require a member vote, with non-participant votes counting as “no” votes, in order to sell Tract B, although the Sections disagree about the CHDB LAW, LLP COOPCOM.0038 August 14, 2024 Page 3 approval threshold (3/4 and 2/3, respectively). The problem for the Association is that its annual meetings demonstrate the unlikelihood of reaching even 20% participation, and so a member vote to sell Tract B is empirically demonstrated as impossible. 3. Quorum and Member Vote Impossibility The Association cannot obtain any Membership vote that will achieve 2/3 quorum, which is 1,068 approving Member votes. The Association holds Annual Meetings of the Members to elect its Board of Directors in May of each year, with a 10% quorum requirement that the Members rarely exceed by much. The Association has no record of ever achieving even 20% participation toward quorum since its transition from Developer control approximately 20 years ago. The Association has attempted to increase and encourage the participation in its Annual Meetings each year, most recently by adding electronic voting, but the Association Members’ participation does not come close to the quorum necessary to authorize the sale pursuant to the CC&Rs. Notwithstanding the impossibility of a Member vote to authorize the sale, the Association’s Board of Directors has consulted with experts to determine that selling Tract B to the City is in the best interest of the Association. The only reason that the Board cannot move forward with the sale is the impossibility of quorum for the Member vote that the CC&Rs require, or even to amend the CC&Rs at issue. The Association is unwilling to undertake the futile and significant expense of holding a Member vote that the Board knows cannot achieve quorum. 4. Eminent Domain The Association’s Board of Directors is open to a negotiated sale of Tract B if the City has legal authority to acquire it by eminent domain. The Association is open to the City’s use of this legal authority. The Association has begun discussing a negotiated sale with the City that would amicably respond and settle such a claim, if the City uses eminent domain to acquire Tract B without an Association Member vote. The Association has reviewed the City’s April 18, 2024 letter captioned “OFFER TO PURCHASE,” which provided the City’s offer to purchase Tract B from the Association for $352,298.00. The Association’s Board of Directors accepts this offer. The Association desires to complete the sale through eminent domain because of the impossibility of the Member vote. The Association’s Board prefers to execute a written agreement for the sale before the City files and serves the eminent domain case. CHDB LAW, LLP COOPCOM.0038 August 14, 2024 Page 4 5. Conclusion We hope this letter responds to the City’s request for the Association’s position as to Tract B. This letter follows one year of discussion and negotiations on the sale of Tract B, and the Association’s Board of Directors has determined the above-described negotiation is in the best interest of the Association. The Board looks forward to any questions the City has, and to meeting to discuss the continuing negotiations. Please contact this firm on behalf of the Association. Sincerely, Edward D. O’Brien, Esq. for CHDB LAW, LLP