Greenway Golf, City Embroiled in Legal Conflict
Greenway Golf, City Embroiled in Legal Conflict
Greenway Golf Associates (GGA) filed a cross-complaint against the City of Alameda with the Superior Court of California in response to the city’s suit against Greenway over management concerns at the Chuck Corica Golf Complex.
GGA operates and manages the Chuck Corica Golf Complex, located at 1 Memorial Clubhouse Road, under a 2012 lease agreement with the city, which was amended in 2018. GGA’s cross-complaint was filed on Sept. 9 by Oakland-based law firm Burke, Williams & Sorensen on behalf of GGA’s majority shareholder Umesh Patel. The suit alleges, among other things, around Oct. 2021 the city began a campaign to trigger a “material default” that would enable the city to terminate GGA's lease.
“Greenway’s claims in this cross-complaint arise from the city’s campaign of harassment, false or baseless accusations, and character assassination directed at Greenway and its majority owners, the Patels, in a concerted and premeditated effort… to strip Greenway and the Patels of their contractual rights under the lease,” reads the cross complaint.
The suit states the city aims to “exercise operational and financial control of the complex” to ensure that “its political supporters receive full access to prime-time tee times and discount pricing.”
The city denies GGA’s assertions.
“The city categorically rejects the claims raised in Greenway’s cross-complaint and looks forward to vindicating the city’s and the community’s rights in the litigation,” wrote City of Alameda Public Information Officer Sarah Henry in an email to the Sun.
Henry says the city’s suit was caused by GGA breaching several clauses of the lease.
On March 2, GGA minority shareholder Marc Logan filed a lawsuit against GGA, GGA director Todd Lee and Patel in Alameda County Superior Court, according to the city’s suit. Logan alleges he had not received $709,000 plus interest owed to him from Patel. He also alleges Patel used GGA funds and a Small Business Administration loan, not his own funds, to pay off a GGA bank loan and he had not yet personally financed improvements to the complex’s North Course, a clause in the shareholder agreement.
Logan hired a forensic accountant to review GGA’s books and records. The accountant’s final report alleges Patel committed “serious financial improprieties” regarding GGA in 2020 and 2021.
On March 21, the city notified Patel it wanted to conduct “an audit of GGA’s records pursuant to Section 5.7 of the lease,” as a result of Logan’s suit and the halting of construction on the North Course in December 2021.
“Greenway has refused to permit the city’s lawful request for access and review of Greenway’s books and records by city finance staff, which constitutes a material breach of Greenway’s lease obligations with the city,” wrote Henry.
Section 5.7 reads, “The city reserves the right to designate its representatives who shall have the right to audit tenant's accounting procedures and internal controls of tenant's financial system and to examine any books, records, statements or supporting documentation as it relates to gross revenues from the operation of the premises, or any other items set forth in this agreement.”
The city also asserts GGA breached the lease by failing to resolve the drainage and irrigation issues on the North Course and violated the covenant of good faith and fair dealing with the city.
GGA believes the city breached Section 3.2 of the lease, which reads GGA “shall have the exclusive right and authority to operate and manage the [golf complex] as [GGA] deems appropriate.” The cross-complaint states the city breached this clause by falsely accusing GGA of making improper staffing decisions; falsely accusing GGA of improperly setting or raising rates; falsely accusing GGA of irregularities in its accounting systems and more.
GGA’s suit also claims the city breached the agreement’s implied covenant of good faith and fair dealing and should be responsible for expenses GGA incurred while defending a lawsuit from Abdul and Priscilla Nevarez. The Nevaraz’s claimed there were ADA violations at Jim’s on the Course and the complex’s parking lot. Jim’s on the Course is a restaurant located at the complex. “Under the terms of the First Amendment, the city agreed to ‘repair, resurface and restripe’ the parking lot, states GGA’s cross-complaint.
GGA is seeking compensatory damages according to proof; attorneys’ fees and costs incurred in this action; and further relief that the court deems just. The city is also seeking attorneys’ fees, compensation for damages, and a restraining order to complete the audit.
Patel and his wife, Avani, acquired an ownership interest in Greenway in 2019. In 2020, Patel became the majority shareholder after purchasing additional shares.