Unincorporated and Unrepresented

Stephen Phinny and his neighbors agree on one thing: The Tortolita
Mountains are beautiful. The hills are covered in old saguaros; the
history of the region is evident in the petroglyphs hidden among the
rocks and caves.

That beauty is the reason why Pima County owns the 4,500-acre
Tortolita Mountain Park there. Phinny has been bitterly fighting his
neighbors over two Tortolita Mountain Park access points that lead
through Phinny’s 1,035-acre Saguaro Ranch development. On the east side
of Saguaro Ranch is a deeded easement that goes through part of the
development, and on the west side is a public easement considered by
neighbors to be an extension of Thornydale Road. (See “Tortolita
Showdown,” May 22, 2008.)

Phinny, a former Telluride, Colo., resident and Gerber Foods heir,
moved to Tucson almost a decade ago to purchase and piece together the
36 properties that would eventually form Saguaro Ranch. He marketed the
development as an exclusive gated community—so exclusive, in
fact, that the only way in is through a 700-foot tunnel blasted out of
a solid rock hillside at the end of Thornydale.

As Phinny completed the first part of the subdivision’s
infrastructure, neighbors kept walking through Saguaro Ranch on the
easements they relied on for years before Phinny arrived in Arizona.
But over the last three years, Phinny has put up locked gates at the
access points—only to have neighbors cut the locks. Then Phinny
put boulders across the entrances; neighbors removed them, only to see
them return.

Now Phinny is waiting to go before a judge regarding a lawsuit filed
by the neighbors in June 2008 to determine whether the
easements—which Phinny claims never existed—are public. The
court is expected to first look at the public easement on the west side
of the development, before moving on to the deeded easement on the east
side. (The easements join as a loop road that, neighbors say, has been
used for generations.)

To complicate matters, Phinny and his company are in Chapter 11
bankruptcy thanks to dozens of liens and lawsuits filed by unpaid
contractors, equipment companies and other local businesses. Phinny’s
own Saguaro Ranch home even went into foreclosure.

Despite the bankruptcy and the lawsuits, Phinny beams as he stands
over a 3-D model of the property at the Saguaro Ranch sales office near
the intersection of Thornydale and Moore roads.

“It’s pretty amazing, isn’t it?” he says, pointing out the main
entrance to the property and the location of McClintock’s, the
development’s reservation-only restaurant (which sits on top of what
neighbors claim is part of the west-side public easement).

The fact that Phinny is talking to the Tucson Weekly is a
surprise. For two years, he relied on his former attorney, Craig
Keller, to be his media spokesperson. However, Phinny has now agreed to
his first interview with the Weekly, and he also insists on
giving a tour of his appropriately named subdivision—supposedly
home to 17,000 saguaros, cataloged as part of the development’s plan
filed with the town of Marana.

“This is really what makes this place special,” Phinny says as he
drives through the 700-foot tunnel and past the gatehouse. As an
employee walks out and says hello, Phinny points out the gatehouse
architecture, specifically the details of rock and wood, and the rusted
metal roof.

For the next hour, Phinny points out more of these
details—like rocks from the property used in the buildings, old
wood built around utility boxes, and rusted iron barricades along the
roads.

“The idea is to make all of this seem like it’s always been here,”
he says.

Phinny points out lots that have been sold and developed, but it’s
the vistas he stops for—big-sky views that make the Sonoran
Desert known throughout the world.

He also points out two of his neighbors’ homes. Steven Blomquist and
Sharyl Cummings, a married couple, live east of the development off
Como Road; Tracy Chamberlain lives on the west side of Saguaro Ranch.
These three are Phinny’s biggest critics, a thorn in his side—and
a pain in the neck to Marana officials.

These neighbors have walked the easements almost nightly for two
years (after walking the roads for exercise for years before, they
say). They hold a bright sign declaring to those driving into the
development for dinner at McClintock’s that the road is, in fact,
public. Usually, the walks end at the restaurant, so they can give
customers an opportunity to see the sign.

Phinny says these neighbors are criminals, because they are
trespassing and disturbing his customers.

“Our plan was, and always has been, to make Saguaro Ranch a private,
gated community. The intent was never to have public access through
Saguaro Ranch,” Phinny says.

The neighbors believe that Phinny knew about the public and deeded
easements all along, but chose to ignore them. For example, they point
to an engineering report (needed to put in a septic system) filed with
the Pima County Department of Environmental Quality, on which part of
the west-side easement is identified as a non-motorized path.

However, those same neighbors say that they’re even more upset about
the fact that the town of Marana has bent over backward to support
Saguaro Ranch, despite problems the neighbors have pointed out over the
past decade.

To better understand why these neighbors are angry at the town and
the developer, Chamberlain says it’s best to go back to the very
beginning, when Phinny first arrived and started buying up parcels for
a large development. A majority of those 36 parcels were part of the
Tortolita Property Homeowners Association. Chamberlain, then president
of the HOA, says Phinny came to one meeting to explain the project, but
when she asked Phinny to come to more HOA meetings to help the
organization survive, he essentially ignored her.

“When I realized we were going to be under the five-person quorum we
set in our bylaws, I asked him to send a representative to the
meetings. We couldn’t do basic business—not even issue dues
notices. I contacted Phinny repeatedly,” Chamberlain recalls.

“It was June 2001. I called and told him, ‘We need you now to be
part of the board. You are affecting our ability to do road work (and)
pay our insurance, and we need to have a meeting so we can collect the
dues.’ Then I started getting the stall, and later in the year, we
accidentally found out they incorporated the HOA and put in their own
board. They never came and told us.”

Chamberlain says what remained of her HOA unraveled.

“We were defunct, and he knew it. He knew he was the reason,”
Chamberlain says.

Phinny says that as the majority landowner, he was within his rights
to incorporate the HOA, especially since he was developing a
subdivision that didn’t include the surrounding properties.

Phinny went to the town of Marana with his plan for Saguaro
Ranch—after Pima County rejected part of the original proposal.
Phinny requested that the development be annexed into the town, a
process which was completed in 2003.

Again, Chamberlain says, her neighborhood was left out—they
wanted to be annexed, too. She and her neighbors believed at first that
everything north of the tunnel and east of the Thornydale
right-of-way—including her home and those of her
neighbors—was going to be annexed.

“So when I saw the first annexation posting show up, I was really
concerned,” Chamberlain recalls. “The amount of acres seemed wrong. …
I was sent a map by the town, and I noticed that our properties, the
properties that Phinny wasn’t able to buy up, weren’t in there. I told
someone in the town that it was unprecedented to not annex the entire
HOA. I was told, ‘Tracy, we’re just as alarmed. We asked them
specifically to talk to you. This is your decision. The developer said
they had meetings with all of you.’

“I told him, ‘If they told you that, that’s a bald-face lie. That is
absolutely untrue. None of us are opposed to this.'”

The town told Phinny that the annexation would be put on hold until
he did a new survey and resubmitted the application. However,
Chamberlain says that Phinny instead asked the town to move forward on
the annexation he first submitted, and then move on to a second
phase.

“I voiced my concerns at the Town Council meeting. I was worried
about us being clearly an island, cut off by the annexation. But this
time around, I felt certain that because the town had caught (Saguaro
Ranch) in a lie, and they knew how vulnerable it left us, that this
time, (annexation) would happen,” Chamberlain says.

In 2004, Chamberlain signed a request for annexation, as did many of
her neighbors. Town officials said they would hold a series of meetings
prior to any annexation.

In May 2005, Chamberlain was traveling through Dallas with her
daughter. She says she got a call from someone at Saguaro Ranch asking
her for a copy of her signed petition, because the town-imposed
annexation deadline was coming up.

“‘What do you mean it’s about to expire?'” she recalls responding.
“‘And besides, I’ve already submitted it a couple of times to different
people (in the town of Marana). Why are you calling me, and how can it
be expiring when we haven’t had any meetings with the town?'”

The Saguaro Ranch representative gave her a number to call, and the
number ended up being the Marana staff person in charge of annexations
and utilities.

“I asked why the developer was calling me and was going to submit my
petition to the town. I was told by the town’s representative that
Saguaro Ranch asked to be in charge of the annexation. Is this normally
the way it goes … that the developer is asked to handle the
annexation of properties that are not their own after they deliberately
kept us from being annexed before? Now we found a year later, after
waiting for the meetings we were going to have, that the time to annex
was going to expire? Amazing.”

Chamberlain says that when she returned home, she was told the town
had decided not to annex her home.

“I didn’t understand,” she says. “There were enough signatures and
no opposition. I offered to get new petitions, but I was told no. ‘How
can you make us wait a year and have no meetings? If you can create an
end date, can’t the deadline be extended?’ I was told no, and when I
pressed for a reason, I was told they didn’t have to have one.”

When asked about these matters, Gilbert Davidson explains that he
became Marana’s town manager less than two years ago. He doesn’t know
why these things happened, he says.

However, it’s now his job to deal with the feud between Phinny and
his neighbors over the disputed easements.

“I’ve often thought of what to do,” he says. “I’ve been thinking for
years, ‘How do you resolve all these things?’ Do I bring them all in a
room and hash it out?”

The neighbors say they’ve gone to town officials for help all along,
but no one has taken their concerns seriously.

The easement dispute heated up when Phinny’s attorney, Craig Keller,
delivered a letter to Chamberlain, Blomquist and Cummings on April 29,
2008, telling them that each time they walked the easements, they were
trespassing.

The letter also claims that the easements no longer exist: “(Y)ou no
longer have a purpose for ingress and egress. There is no destination,
use or purpose associated with whatever easement rights you claim.”

Last year, Marana Town Attorney Frank Cassidy told the Weekly that he hoped the dispute would end once either the neighbors or
Saguaro Ranch officials went to Superior Court to get a judgment on the
easements.

“It’s a real problem, because both sides feel they are on the right
side,” Cassidy said last year. “It’s becoming difficult to stay
neutral. I don’t know how long we’re going to be able to do that. …
We have the right to abandon it. As we tire of the fighting, it could
happen.”

Chamberlain and her neighbors took Cassidy’s advice to heart, and in
June 2008, they filed a lawsuit.

Shortly thereafter, news about Phinny’s financial problems started
to emerge.

The $50 million loan he received from New Jersey-based Kennedy
Funding was gone, and lot sales were down. Phinny’s attorney blamed the
economy.

By December 2008, Phinny defaulted on the Kennedy loan and began
Chapter 11 bankruptcy proceedings. As a result, a stay was put on the
neighbors’ lawsuit. And while the neighbors waited for their suit to be
lifted by the bankruptcy court, the town of Marana began proceedings to
abandon the public easement.

During a packed meeting on Feb. 3, city manager Davidson told the
Town Council that his office would do a three-part study to figure out
whether they were doing the right thing.

However, at a May 21 Town Council meeting, the council voted to
abandon the easement. Chamberlain says there was no discussion about
the promised study, and no one was allowed to speak to the council
before the vote.

Later, Chamberlain, through a public-records request, discovered
that while the town was supposed to be doing a study, instead, city
officials were contacting the county to build an alternative access
point proposed by Phinny.

In late April, Marana parks director Tom Ellis wrote an e-mail to
county parks and recreation director Rafael Payan asking if the county
was interested. Payan wrote back on May 1 that the county was indeed
interested.

The town of Marana then sent a letter on May 7 to Pima County saying
the town would take the lead in developing the point of access proposed
by Saguaro Ranch, and would pay many of the associated costs.

After the May 21 vote, Cassidy declared that “anyone walking or
driving as a member of the public on the portions of the easement
located within the town limits of the town of Marana will be treated as
a trespasser, and will be subject to arrest and prosecution at the
discretion of the investigating officer.”

Several days later, Blomquist and Cummings were warned by Marana
Police that they could be arrested for trespassing. The next day,
Blomquist, Cummings and Chamberlain received criminal-trespassing
citations.

On Oct. 15, Oro Valley Municipal Court Judge George Dunscomb
dismissed all criminal-trespass charges, and even admonished Marana’s
actions as an improper use of the criminal process.

Phinny says his neighbors’ defeat of the trespassing charges happened
only because nobody from the town of Marana was there to make their
case.

“I wish someone had showed up from Marana to represent the other
side. But at the end of day, they were trespassing. If I was to parade
up and down their driveways with signs in front, on their property,
they’d be opposed. The long short of it: It is part of a private, gated
community that is now recognized by the town,” Phinny says.

The neighbors filed a second lawsuit this spring, against the town
of Marana, challenging the decision to abandon the easement.

Phinny says that despite the economic challenges—the last time
a lot in the development was sold was in February 2008—he is
confident that he and the town of Marana will succeed.

“The intent was never to have public access through Saguaro Ranch,”
Phinny says.

According to Marana Police Department records, Phinny is still
trying to get trespassing charges to stick. Phinny and his employees
have regularly called police when Chamberlain, Blomquist and Cummings
walk the easement and protest outside of McClintock’s. According to a
recent police report, an officer told the restaurant manager that the
best thing to do was to get a third party—someone who doesn’t
work for Saguaro Ranch—to complain.

“We’ve had numerous people and guests that have complained,” Phinny
replies.

Phinny has more to worry about beyond trespassing. After all,
there’s the bankruptcy, which Phinny jokes that he prefers to call a
“reorganization.”

Chapter 11, he says, is giving the development a chance to survive
the economic downturn, and he expects his fortunes to start changing
after Thanksgiving.

“I’m committed. We’re here to stay. I really put a lot of blood,
sweat and tears in this, and worked very hard to build something that I
think is one-of-a-kind and very environmentally sensitive. We have done
everything that everybody has asked us to do. I’m not a bad developer,”
Phinny says.

When asked if he would do anything differently, he says he wishes
he’d started the project a couple of years earlier to beat the economic
collapse.

Phinny doesn’t say whether he’s been successful in securing
additional financing.

“I think we’re going to be very successful, and we have a fabulous
project. We have a huge amount of equity, and I think the town has
recognized our project. We’re in a good place. I don’t think (the
bankruptcy) will hurt us.”

Meanwhile, Marana officials stand fully behind the development, a
fact that becomes clear when Davidson and Ellis, sit down to discuss
Saguaro Ranch.

“This (west side) easement was never part of the overall plan of
Saguaro Ranch or the town having access into Tortolita Mountain Park,”
Davidson says. “The town never identified these roads through our
park’s master plan. It’s become a lightning-rod issue, and our approach
to it has been, ‘Let’s look at it as part of a global view.’ … We’ve
been working closely with Pima County and the town of Oro Valley, and
residents of the Dove Mountain area. They have all been able to be part
of these discussions,” Davidson says.

However, the fact that Marana is in discussions with these
incorporated communities feels like a smack in the face to Chamberlain
and her neighbors who live in unincorporated Pima County.

“Where are our representatives in all of this? Our property taxes do
not indicate that our rights or lands are irrelevant—not when my
taxes have more than tripled in the last couple of years,” Chamberlain
says. “Those of us who have been left in no-man’s land do not have
development staff, town attorneys, town managers or council members who
are concerned about our rights. Again, where are our Pima County
representatives who were elected to represent the taxpayers of Pima
County?”

Right now, the Wild Burro trailhead offers the only public access
into the Tortolita Mountain Park; it is located near the Ritz-Carlton
Dove Mountain resort. Another access point, on the other side of the
park in Pinal County, is in the early planning stages.

Chamberlain says she finds it odd that Pima County taxpayers might
have to go through Pinal County to use a Pima County-owned park.

Eric Sparks is representing Phinny and Saguaro Ranch in the
bankruptcy. He says he has faith that his client will be able to pay
off all of his creditors in three to five years.

“He’s gone back to revisit his proposal. He’s convinced he’ll have
creditors paid,” Sparks says.

In bankruptcy filings, the town of Marana and its officials are
listed as potentially owing Phinny and Saguaro Ranch $135 million. The
neighbors have cited this as a potential threat against Marana—a
threat that could have led the town to abandon the easement. However,
Davidson says the Town Council made the abandonment decision on its own
merits.

“The easement has nothing to do with the bankruptcy,” he says.

Sparks explains that when the bankruptcy was filed, the town of
Marana hadn’t moved to abandon the west-side easement. If the town
hadn’t moved forward with abandoning the Thornydale right of way,
Sparks says, his client would have sued. (The $135 million is what
Phinny estimates as the value of the development.)

“We did not pursue it, and the town went ahead and abandoned the
easement,” Sparks says.

Listing that on the bankruptcy wasn’t supposed to be a threat
against Marana, Sparks says; he was just protecting his client.

“It’s part of bankruptcy law,” Sparks says. “If you do not list your
causes of action or disclose possible causes of action, you may later
lose the ability to bring that before the courts. There’s a sense of
caution that all good bankruptcy attorneys have. I didn’t want to take
a chance.”

The neighbors’ first lawsuit against Phinny regarding the public
easement is expected to go before the bankruptcy court in January,
according to Cummings.

She and Blomquist will continue to picket outside McClintock’s most
evenings. While the restaurant hasn’t been terribly busy lately,
Cummings says she and Blomquist expect to see more customers with the
arrival of cooler weather.

“For the most part, though, it’s pretty quiet up there,” she
says.

Cummings admits that at times, she’s considered throwing in the
towel. “Then I ask myself. ‘What is quality (of life) if you don’t
stand up for it? If you don’t, then you’re not going to have it
anywhere, and someone is going to take it.’ So you have to stand up for
your rights,” Cummings says.

“What’s been hard is dealing with the town of Marana. They are not
for the people, but for themselves. What happened to the three-part
study they were going to do and then get back to us? They most
certainly didn’t get back to anybody. Even at that Town Council
meeting, they held it on a day that the council normally doesn’t meet,
and they put it on a consent agenda and didn’t allow us to speak,”
Cummings says.

She still hopes the county and Marana can somehow be convinced to
use the disputed easements to access Tortolita Mountain Park.

“It’s a shame to just give them up,” she says. “I find it
interesting that a county would purchase a park area, and not plan for
vehicular access, especially when there is land that can provide
vehicular access.”

Davidson says having vehicular access to the park was never
considered.

“That’s why we’ve never identified that as a public road. As the
property was developed, and as the developer acquired parcels, the road
was never identified as a public road,” Davidson says.

“Saguaro Ranch has complied throughout the whole process. I see this
now as entirely a civil issue. If (the neighbors) win their case,
that’s fine. I’ll have no problem with that.”

This article appears in Nov 19-25, 2009.