Created by Woody Garnsey
Amended June 27 2019

1. The Park Hill Golf Course (“PHGC”) land currently consists of approximately 155 acres that are zoned OS-B (Open Space-Recreation).
2. Prior to November 4, 1997, the George W. Clayton Trust (“Clayton”) owned the PHGC land in fee simple without any legal use restrictions other than City of Denver (“the City”) zoning restrictions.
3. Under the administration of Mayor Wellington Webb, the City purchased a perpetual open space conservation easement on November 4, 1997 from Clayton in exchange for $2 million paid to Clayton. Therefore, Clayton in perpetuity relinquished its right to develop the PHGC land in exchange for this $2 million payment. This conservation easement was recorded on November 25, 1997 at Reception No. 9700159758. Terms of the conservation easement agreement include the following:
   1. The conservation easement is perpetual.
   2. The stated purpose is “to vest a real property interest in Grantee [the City] that provides for the conservation of the Golf Course Land as open space and for the continued existence and operation of a regulation-length 18-hole daily fee public golf course in its present location….”
   3. The permitted uses include that the PHGC land “shall be occupied, used, operated, and maintained as a regulation-length 18-hole daily fee public golf course with such related uses and activities as may be accessory or incidental to the operation of a golf course including but not limited to a driving range, golf learning center, club house, restaurant and bar, and such unrelated recreational uses such as ball fields, tennis courts, etc.”
   4. The obligations and restrictions of the conservation easement “shall run with the land and be enforceable against any owner, lessee, mortgage holder, assignee, or other successor in interest of Grantor [Clayton].”
   5. The conservation easement agreement can be amended by written agreement of both Clayton and the City and upon approval of City Council.
4. On October 13, 2000, Clayton and the City entered into an agency agreement. The purpose of the agency agreement was to have the PHGC land treated as City-owned land for tax purposes so that Clayton would be relieved of all liability for indirectly paying possessory interest taxes on the land pursuant to its golf course lease. The agency agreement was recorded on December 1, 2000 at Reception No. 2000175267.
5. The terms of the agency agreement include:
   1. The term is through October 13, 2099.
   2. Clayton holds title to the PHGC land “as agent of the City, to hold for the benefit of the citizens of the City and the general public….”
   3. Upon termination of the agreement, Clayton is obligated to “grant, convey, assign, transfer, and deliver to the City…for the use and benefit of the citizens of the City and the general public, all right, title and interest of the Trust in and to the Golf Course, Golf Course Land, and all buildings, improvements, facilities, and other property, real and person, tangible and intangible….”
   4. The 1997 conservation easement is released.
   5. Clayton has the right to terminate the agreement upon 60 days’ notice, but upon such termination Clayton is obligated simultaneously to “grant a conservation easement to the City (in the form attached hereto as Exhibit I with such changes as may be mutually agreed upon by the City and the Trust) that will ensure that the Golf Course Land is used only for the Golf Course and related activities.” The referenced Exhibit I is a conservation easement with essentially the same terms as the 1997 conservation easement.
   6. The purpose is “to ensure that the Golf Course is managed so that (i) the Golf Course Land is preserved as open space, (ii) the Golf Course continues to operate as a regulation-length 18-hole daily fee public course in its present location….”
   7. The agreement can be amended by written agreement of both Clayton and the City and upon approval of City Council and the Probate Court.
6. Clayton currently leases the PHGC land to Evergreen Alliance Golf Limited, LP (“Evergreen”), a Delaware limited partnership. The Lease is guaranteed by Premier Golf Management, Inc, a Delaware corporation. Evergreen is currently owned by Arcis Equity Partners, LLC (“Arcis”), a large “real estate and leisure equity sector” Texas private equity firm. Arcis’ current financial backer is SoftBank Group Corp. The lease terms include the following:
   1. The original term was through December 31, 2018.
   2. The guaranteed lease payments are $700,000 per year.
   3. Arcis has two 5-year options to renew the lease, one of which it timely exercised in June 2018.
   4. Arcis has a right of first refusal to acquire the PHGC land during the term of the lease. Any such sale by Clayton would be subject to the conservation easement restrictions set forth in the agency agreement.
7. In late 2016, Clayton formed a committee identified as the Park Hill Golf Course Citizen’s Advisory Committee (“PCAC”) to address issues regarding the future of the PHGC land. The PCAC was comprised of community members selected by Clayton.
   1. Clayton stated that it created the PCAC because it expected Arcis not to renew the golf lease.
   2. The PCAC generally met monthly through mid-2018.
   3. Notwithstanding the existence of the perpetual open space conservation easement, Clayton stated that–if Arcis did not exercise its 5-year renewal option—Clayton needed to receive a minimum of $24 million or $1 million per year from the PHGC land.
   4. One of the activities at a PCAC meeting was a “Ball and Bucket Game” whose goal was to generate $24 million for Clayton from possible disposition of PHGC land. Participants were given various balls use representing different land uses with each ball having an assigned per-acre value. Open space and recreational uses were given low values and commercial and high density uses were given high values. Using these marked balls, participants were asked to create a rough land use plan that would add up to a value of at least $24 million.
8. Clayton has retained the consulting firm CRL Associates and the law firm Brownstein Hyatt Farber Schreck LLP to advise and represent it in connection with matters related to the PHGC land. The lead Brownstein law firm lawyer on the matter is Bruce James who was Co-Chair of Mayor Hancock’s 2011 and 2015 election campaigns. The Brownstein law firm website states that “Bruce James has played a leading role over the past 25 years in some of the most notable real estate projects in the Denver area and a number of significant projects throughout the country.”
9. In the fall of 2017, Clayton and the administration negotiated a complicated agreement regarding the PHGC land the terms of which included:
   1. Clayton and the City would nullify the conservation easement.
   2. The City would have the right to install an approximately 25-acre stormwater detention facility in the northeast corner of the PHGC land as part of its Platte to Park Hill project.
   3. The City would purchase 50% of the PHGC land from Clayton for $10 million.
   4. The City would lease 50% of the PHGC land from Clayton for 30 years at the rate of $350,000 per year.
   5. Starting January 2, 2019 and continuing through December 31, 2022 the City would have the exclusive right to sell all or portions of the PHGC land at prices no lower than then “as-entitled” (i.e., then zoned) appraised market value.
   6. Starting January 1, 2023 and continuing through December 31, 2037 Clayton would have the exclusive right to initiate and direct sales of the property leased by the City.
   7. Clayton would receive the first $24 million (including the initial $10 million and the aggregate lease payments from the City) from all PHGC land transactions.
   8. The City would pay Clayton up to $350,000 for its development planning costs.
   9. After Clayton would have received an aggregate total of $24,350,000, net land PHGC land sale proceeds would be divided as follows:
      1. first, to the City and Clayton in equal shares until payment in full of any Clayton development planning costs in excess of $350,000;
      2. second, 100% to the City until it would be reimbursed the full amount of (1) its $10 million purchase price, (2) all lease payments made to Clayton, and (3) any purchase option prices and accelerated payments paid by the City;
      3. third, with respect to sales prior to December 31, 2017, 50% to Clayton and 50% to the City; and
      4. finally, with respect to sales after December 31, 2017, 100% to the City.
   10. Potentially all 155 acres of the PHGC land could be developed.
10. On October 3, 2017, the City administration presented the proposed agreement to the City Council Finance and Governance Committee. At the request of the City administration, however, the Committee took no formal action regarding the proposed agreement.
11. On January 2, 2018, the City Council approved ordinances (1) authorizing the City to condemn a permanent stormwater detention easement and a construction easement for purposes of installing and operating a stormwater detention facility in the northeast portion of the PHGC land as part of its Platte to Park Hill project and (2) approving the related construction contract. The City advised that it expected to begin construction work in January 2019 and that the PHGC will be closed through at least mid-2020. The City stated that it would restore the PHGC land to an 18-hole golf course if Arcis exercised its 5-year option to renew its lease.
12. In June 2018, Arcis timely exercised its first 5-year option to renew its lease so that the current term of its lease extends through December 31, 2023.
13. In April 2018, Arcis sued Clayton in Denver District Court claiming that the actions between Clayton and the City described in paragraph 9 above constituted breach by Clayton of Arcis’ right of first refusal to purchase the land and breach of the implied duty of good faith and fair dealing. The lawsuit is captioned Evergreen Alliance Golf Limited, L.P., d/b/a Arcis Golf v. Clayton Early Learning, as Trustee of the George W. Clayton Trust, Case Number 2018CV31475, Courtroom 275. The trial judge denied Clayton’s motion to dismiss. On April 19, 2019, the trial judge granted Arcis’ motion to file a second amended complaint in which it has joined the City as a co-defendant. On May 13, 2019, the City filed its answer and affirmative defenses in which it fundamentally denies all allegations. As of June 21, 2019, Clayton has still not filed its answer to the second amended complaint. The parties scheduled a court status conference for May 16, 2019, but there is no public record about whether or not the conference took place and, if it did, what transpired. The case is still scheduled for trial beginning October 21, 2019.
14. In October 2018, Clayton completed the PCAC process by publishing a document titled “A Vision for the future of Park Hill Golf Course Property” (“Clayton Vision Document”). Despite requests from PCAC members, Clayton failed to allow PCAC members to see any draft of the Clayton Vision Statement prior to its publication. Several PCAC members have submitted a formal critical response to the Clayton Vision Document stating that it is fundamentally flawed due to the fact that it glosses over the fact that in 1997 Clayton relinquished its PHGC land development rights in exchange for the $2 million paid to it by the City in connection with the perpetual open space conservation easement. The response document explains that the Clayton Vision Document is tainted by an engrained bias for development of the PHGC land despite the land use restrictions of the perpetual open space conservation easement. The response document also explains that the Clayton Vision Document fails adequately to address the critical health and environmental need to preserve open space in Denver.
15. On November 6, 2018, Denver voters passed a 0.25% sales tax increase estimated to raise $45 million annually for the purpose of acquiring and maintaining park land to keep pace with the population growth expected to reach 900,000 by the year 2040.
16. On December 31, 2018 Arcis shutdown all operations at the PHGC and furloughed or transferred all employees.
17. Based upon its condemnation powers, the City commenced construction of the stormwater detention project in the northeast corner of the PHGC land on January 4, 2019. At a public meeting in December 2018, city officials indicated the City would be finished with the stormwater detention work in the third quarter of 2019 and would return the property to Clayton to allow it to reconfigure the land as necessary to resume operations as an 18-hole golf course. To date, there has been no public disclosure regarding compensation that has been paid and/or will be paid by the City to Clayton and/or Arcis in connection with its stormwater detention project.
18. On January 14, 2019, the City submitted a letter to Clayton stating that it was prepared to proceed in accordance with the proposed 2017 agreement. Clayton forwarded this letter to Arcis and, on February 15, 2019, Arcis notified Clayton that it desired to purchase the property in accordance with the City’s letter.
19. On March 25, 2019, Arcis sued the City alleging, among other things, that since January 2, 2019 the City has illegally deprived Arcis of its leasehold rights to possession of the PHGC land without compensation. The present status of this lawsuit is unclear.
20. On June 19, 2019, Clayton and Westside Investment Partners made a public announcement confirming “that they are engaged in discussions regarding the Park Hill Golf Course” and stating that “as part of their due diligence, Clayton has filed the appropriate and lawful notice with the City of Denver for termination of he Agency Agreement pertaining to the property’s title.” Clayton’s referenced notice to the City states that its “Termination Notice, and the recordation of the Conservation Easement required by Section 9 [of the Agency Agreement], is in all respects conditional upon Clayton consummating a sale of Park Hill GC to an affiliate of Westside Investments, LLC.” It also states that the closing is currently scheduled for July 11, 2019 and that “if for any reason closing does not occur, the Termination Notice shall be automatically rescinded and o no force and effect.” As of the present date, neither the City nor Arcis has made any public statement regarding this new development.

June 27, 2019