WATERTOWN — As the City Council prepares to hold a special meeting to discuss what needs to be done about Watertown Golf Club Inc.’s encroachment onto city-owned parkland, a club shareholder and former member of its board of directors claims the existence of the encroachments have long been known by club officials as well as some city staff.
City officials have insisted that they only recently learned of the encroachments when it was brought to their attention by developer P.J. Simao, who owns competitor Ives Hill Country Club. However, Nicki L. Kogut, a club shareholder for about 30 years and a member of its board from 2010 to 2013, contends the club knew that a parking lot, septic system, cart storage area and some tee boxes used by the club are located on city property.
The information is contained in a reply affidavit prepared by Mr. Kogut as part of Mr. Simao’s state Supreme Court action over the club’s lease with the city. Mr. Simao filed suit in November contending the lease violates state General Municipal Law, legally necessitating that the agreement be voided and that the city retake possession of the property.
Mr. Simao claims that two leases entered into by the city with the club should be voided because former Mayor Joseph M. Butler Sr. had a prohibited conflict of interest when he signed the leases, signing one in 2000 as mayor while also being a member of the club’s board of directors and signing a second in 2006 as club president after leaving office. Mr. Simao has contended that the actions are part of a pattern of favoritism toward the club by the city and represent an unfair taxpayer subsidy of his competitor’s operations.
In March, Judge James P. McClusky dismissed the suit, ruling that the 2006 lease legally superseded the 2000 lease and that Mr. Butler had not violated the city’s Code of Ethics by appearing before the City Council in the matter after ending his service with the city.
Mr. Simao subsequently learned that a gravel parking lot, a fenced-in golf cart storage area and septic system used by the club encroach on city-owned property. He filed a motion to renew the legal action in April claiming that if this information was known while the litigation was ongoing, the outcome of the case would have been different.
The city and club have countered that the encroachment issue is unrelated to Mr. Simao’s conflict-of-interest contentions in relation to the lease. The city contends that the encroachments “exist outside of the leased premises” and are occurring from club-owned property onto city-owned property in an area removed from the leased property.
The city and developer Michael E. Lundy, who acquired the majority of the club’s assets through a stock purchase in December, have signed what City Manager Rick Finn has termed “a letter of understanding” in which Mr. Lundy has agreed to a timetable in which he will rectify each of the encroachment issues.
In his affidavit in support of Mr. Simao’s motion to renew his legal action, Mr. Kogut says “it was common knowledge and a subject of regular discussion” that any time there was an event in Thompson Park that drew a large crowd, the club’s board of directors would hire parking attendants to guide drivers to the parking area that encroaches on city land.
“During events drawing greater attendance in the park, the Lower Parking Area was reserved for the exclusive use by members and guests of the WGC,” Mr. Kogut stated. “The parking arrangements were regularly observed by personnel from the City Parks and Recreation Department.”
Citing an earlier affidavit filed by Mr. Lundy, Mr. Kogut says that Mr. Lundy stated that the use of city-owned land for parking has “existed for decades” and is “done cooperatively” with the city. He also claims the city mowed a grassy area used by the club for parking and the club would periodically add crushed stone to the lot on city land.
“The WGC also knew that the Lower Parking Area, cart storage, and tee boxes encroached upon City owned parkland,” Mr. Kogut said. “The WGC knew that its septic system encroached on City property; when it needed to be maintained due to overflow, City employees occasionally observed the work.”
He further claims that Mr. Butler, while president of the club, had informed club directors that an agreement existed with the city “to cut trees and install a fence that enlarged the use by the WGC of City owned parkland.”
Mr. Kogut’s affidavit had not been filed with the court as of Monday, but Mr. Simao said it would be filed in advance of the council’s special meeting at 6 p.m. today at City Hall.
Mr. Kogut filed his own suit against the club in August over the pending sale of its assets to Mr. Lundy. He contended, among other things, that the club’s officers and directors breached their fiduciary duty by not entertaining the highest offer for the club’s assets. He contended that Mr. Simao had submitted a higher offer for the assets.
Judge McClusky dismissed that action in December, stating that shareholders were free to accept or reject a offer “for any rational business” and made reference to Mr. Lundy’s vow to try to maintain the club as an 18-hole course, something Mr. Simao declined to do.