Promises Made Should Be Promises Kept: A Case for the Phoenix Swim Club

PHOENIX, Arizona, September 17. BROPHY College Preparatory has informed the Phoenix Swim Club that it only has months to remain on the property before a $6.8 million deal closes with a developer, Ryland Homes, in November that will plow over the pools to make room for 35 air conditioners on top of 35 homes.

The neighbors are furious over the fact that they supported Brophy’s original purchase back in 2002 with the understanding that it would not be developed and the historic USA Swimming Club would remain a part of the neighborhood.

The Neighbors Have A Case
The property at 2902 East Campbell Avenue, commonly known today as the Phoenix Swim Club has been designated as a place for children, sports and education since 1959 when the City of Phoenix first issued a special permit allowing for the Madison Vista Elementary School to be constructed on the 10.2 acre property.

A dedication plaque on the original school building remains today as testimony to the long history that this property has had in the neighborhood. Throughout the years, developers have tried to acquire the property and build homes on the land. Each time, the neighbors have voiced strong support for the property as a place for children, sports and education as it morphed from a school to a world-class aquatic complex and finally into an athletic sports facility.

Property owners along the way have been non-profit corporations, ministries and/or educational institutions. Each time the property passed hands, it was under some form of duress allowing for the purchase price to be well below market value. Each buyer along the way knew that the property held greater riches if it were sold to developers and turned into housing units. But with each passing deed came a new renewal to keep the property for the children.

Today the challenge to keep the property out of the hands of the developers has once again become a neighborhood threat.

A Brief History on How Brophy Acquired the Property
Based on court documents, the following are details of the property’s history from 1999 through today, and the conditions that led to the Brophy College Preparatory school acquiring the property with support from the community, the Boreyko Foundation, and the Phoenix Swim and Sports Foundation (PSSF). It is a story of promises made and promises that must be kept.

On May 10, 1999 Athletes International Ministries (AIM) entered into an “Acquisition Agreement” to purchase the Phoenix Swim Club property from the PSSF, run by Dr. Gary Hall, Sr., for $1 million.

On August 5, 1999, the Boreyko Foundation gave Athletes International Ministries (AIM) a gift of $1.5 million with certain covenants, conditions and restrictions placed on the property. One of the conditions of the Gift Letter was that the facility be used for the charitable and religious purposes of AIM and the Phoenix Swim Club. The property was to be named “The Boreyko/AIM Sports Complex (Home of the Phoenix Swim Club)” and was to be used in accordance with zoning requirements.

Ten days later on August 15, 1999, AIM entered into a Management Agreement with PSSF in which “all parties agreed that the provisions shall bind and run with the property, and shall bind any successor of AIM” through August 1, 2020.

A little more than two years later AIM was having financial difficulty and needed to find a way to cash in on the property. It was saddled with the Boreyko gift conditions and the life of the PSSF Management Agreement. The easiest way to get out of those agreements was to violate the zoning requirements that came with the special permit to operate a sports facility.

It was obvious to the neighbors that without the special permit, AIM would be closer to selling the property to developers. During the course of the summer of 2001, the neighborhood presented overwhelming evidence to the Phoenix City Council that 86 percent of the neighborhood was in full support of the facility and that zoning stipulations were in compliance. AIM was forced into bankruptcy in the fall of 2001.

A number of bidders came forward to purchase the property at the time. One of them was Zacher Homes which presented a $5 million offer for the property. Brophy College Preparatory bid $1.5 million with the intent to take over management of the Phoenix Swim Club and honor the Boreyko gift conditions.

On October 24, 2002, in a court document, the Boreyko Foundation said that, “Boreyko does not object to the sale of the Property to Brophy, but it objects to the sale of the Property to a ‘higher or better offer’ in the event the offer does not comply with Boreyko Gift Letter”.

The next day in a court document dated October, 25, 2002, Zacher Homes argued that it was the highest bidder and asked for, “Complete disclosure by Brophy and the other parties of any and all terms and side-deals so that other potential bidders have a fair opportunity to bid on the Property.”

In spite of a higher cash offer, the Bankruptcy judge ruled in favor of Brophy on November 1, 2002 for $1.7 million saying that the offer was “pursuant to the terms and conditions of Brophy’s Offer Letter (the “Brophy Offer”) … including the terms and conditions of an agreement between (1) Brophy and Boreyko Foundation and (2) Brophy and the Phoenix Swim and Sports Foundation (“PSSF”) and Dr. and Mrs. Gary Hall (the “Halls”).

The neighbors were supportive for three reasons:
1. The property went to a well-respected educational institution.
2. The property would remain as an open space dedicated to children, education and sports.
3. There would be no development on the property.

Brophy fulfilled terms of the Boreyko Gift Letter by placing signage on the property acknowledging Dottie Boreyko. Brophy also honored the management agreement by running the swim club but changed its name to Brophy East Swim Team.

Club Threatened, Neighbors Furious
Brophy has informed the Phoenix Swim Club that it only has months to remain on the property before a $6.8 million deal closes with a developer in November. The neighbors are furious over the fact that they supported Brophy’s original purchase back in 2002 with the understanding that it would not be developed.

Brophy acquired the property for a depressed price over higher bids because it pledged to keep it as a swim club.

The neighbors feel deceived because they have now been told that Brophy has title that is free and clear of any encumbrances including honoring the Management Agreement because Brophy paid off Dr. Gary Hall six days after the bankruptcy judge awarded Brophy the property.

The neighbors recently found a court document titled “Release of Agreement and of Memorandum of Agreement”. The Document filed by Brophy, states that Brophy paid PSSF (Dr. Gary Hall) “Valuable Consideration” on November 7, 2002, six days after the Bankruptcy judged awarded Brophy the property.

The neighbors had no idea that this action took place after the judge’s ruling. The “Release of Agreement” document is clearly Brophy’s attempt to rid the property of any long-term promises to the club and neighbors and if it remains unchallenged, will certainly open the door to development. To remove these terms and conditions six days after a ruling, surely raises ethical and legal questions.

In the end, the neighborhood supports Brophy’s decision to sell, but only under the same terms and conditions that it acquired the property. If Ryland Homes wants to purchase the property, run a swim club and rename it the Dottie Boreyko/Ryland Homes Sports Complex until August 1, 2020, the neighbors will not stand in its way.

Until then, promises made should be promises kept.

Note: Brent Rutemiller is the publisher and CEO of Swimming World Magazine, and a resident of the neighborhood that contains the Phoenix Swim Club pool.

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Author: Archive Team


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