JMK Golf LLC has teed up a buyer for Ridgemark Golf & Country Club, shanked by subpar turnouts and legal hazards.
The contract of sale disclosed Feb. 11 by JMK Golf President Alex Kehriotis remains tentative, and calls for legal resolution between the Santa Clara parent company and Ridgemark Homes Association, a not-for-profit corporation legally based in Salinas. In the event the two sides fail to resolve their issues, according to third parties familiar with the matter, the golf course in southern Hollister could shut down as soon as this summer. The threat of closure is not new, as the Kheriotis family has mentioned it as an option at a county board of supervisors meeting.
“If they (the homeowners’ association) don’t want to cooperate with us to re-establish property value in a development that is mutually beneficial, then we’re just probably going to shut down and develop it five, 10, 15 years down the road,” Kheriotis told BenitoLink.
While JMK Golf claims damages by the homeowners’ association and accordingly seeks $50 million, the association is pursuing a judicial decision on the property owner’s easement over roads in the private community. Both parties say that they “had no choice but to file” civil complaints against each other. In separate statements Feb. 11-13, JMK Golf and RHA delved into detail:
“The board of Ridgemark Homes Association met with JMK Golf last year, when we said that we were shutting down 18 holes,” said Kehriotis, who noted that JMK Golf previously received a letter from the San Benito County Water District, saying that its water allocation was cut by 50 percent as a result of a statewide drought. “We just couldn’t afford to continue operating a 36-hole facility,” added Kehriotis.
Matteoni, O’Laughlin and Hechtman Partner Bradley Matteoni, an attorney who represents the homeowners’ association, said that JMK had “advised the association that it would be shutting down a substantial portion of the golf course to pursue residential development.” RHA has long claimed that JMK’s easement over Ridgemark’s roads remains limited to use related to the country club and golf course. In 2011, according to a public record, JMK told the county that “the roads are a private issue.”
Immediately after a meeting April 7, 2014, according to Kehriotis, both JMK Golf and RHA seemed optimistic. “Some of the association’s board members emailed me, saying that they thought the meeting went great,” recalled Kehriotis. “Well, the very next day, we were served with a lawsuit. They didn’t mention that at the meeting the night before. They all said how great it went, then we got sued.”
Matteoni said, “The Ridgemark Homes Association had no choice but to file a lawsuit for a judicial determination of whether JMK could use its roads for the development of a large scale residential project.” She alleged that a potential plan for JMK’s golf resort had proposed unsafe road conditions and intersections. “In response, JMK sued the association and individual members on its board for $50 million.”
Kehriotis said that JMK Golf “had no choice but to file a countersuit against the association and members of its board of directors individually. We didn’t want to do that. We felt that we had been wronged and they refused to meet with us to discuss the issues in the lawsuit.”
Kehriotis touched on financial setbacks, including an ongoing slump in the greater golfing market.
“We’re in a business that’s losing money,” he said. “We invested a lot of capital to try to keep that 36-hole dream alive, but it just didn’t work out. At some point, should the homeowners’ association not want to work with us, why would we continue losing money at approximately $500,000 a year? We’re trying to do the right thing. We’re trying to work with the community. The only people getting rich right now are the attorneys.”
JMK Golf’s $50 million claim against RHA and individuals on its board seeks compensatory damage, general damages, damages for loss of quiet enjoyment, special damages and other recoverable damages, according to the defendants. Matteoni said that she considers that claim “nothing more than a bare-knuckle attempt to intimidate my clients.”
Now, a mutually supported change of ownership depends on a mutual change of heart.
“Our buyer will not close with pending litigation,” confirmed Kehriotis in a telephone interview Feb. 11 with BenitoLink. “It is in the best interest to resolve this litigation, work together and develop the land because right now, it’s not doing anyone any good.”
Matteoni also noted mutual goals among Ridgemark’s stakeholders.
“We are not interested in financially destroying JMK,” she said. “It is our hope that we can work with JMK to find a mutually agreeable alternative to its proposed development that ensures the long term health of the entire community, including the land owned by JMK. We are aware that there is a potential buyer, and look forward to meeting that buyer and hearing what his plans are for the property.”
Several residents of the Ridgemark neighborhood also said they favor legal resolution and new ownership, according to telephone interviews with more than a half-dozen community members since Feb. 11. RHA President Tarasa Bettencourt, who received an invitation to comment, was not among them.
“I absolutely support a sale,” said David Tomlinson, a resident of the Ridgemark neighborhood and the president of Ridgemark Bluffs Association. “I think that it’s really important to recognize the impacts of the Ridgemark situation on Hollister and the rest of San Benito County. If the golf course, restaurant and lodge were to go under, the county’s business community would suffer greatly.”
Gary Easthouse, a resident of the Ridgemark neighborhood, told BenitoLink on Feb. 12 that he moved there in 1999 to retire and play golf for the rest of his life.
“I am all for a sale,” said Easthouse. “I know that it can’t continue the way it’s going now.”