Los Gatos Weekly-Times

Arlie Land and Cattle Co. plays hardball with Denevi

By Jeff Kearns

Pete Denevi, the former Los Gatos High School football coach who has been trying to build a golf course near Lexington Reservoir for nearly four years, has stopped making payments on his option to buy the land, according to Arlie Land and Cattle Co., and now the Oregon-based Arlie says it's moving on to other golf course developers.

Arlie's land-acquisition manager, John Musumeci, says his company never received Denevi's most recent payment.

But Denevi is fully paid up on his option, according to his spokesman Rich Robinson, and negotiations are ongoing. "The option still exists legally and in any other sense," he said in an interview.

Both Musumeci and Robinson were tight-lipped on the specifics of the deal, but each contend that the other side has the facts wrong. After Arlie bought the land from Hong Kong Metro Realty late last year, it upped the purchase price on Denevi's 210 acres from $6 million to $7.6 million, and increased payments on the option from $100 to $1,000 a day.

Supervisor Don Gage, whose District 1 includes the land, says he's received 40 to 50 letters on the golf course, evenly split for and against Denevi's proposed Los Gatos Country Club. Gage says he hasn't really been following the land deals, but he did set up a meeting with Denevi and county planning staff three weeks ago after Denevi complained to him that staff was dragging its feet on the application and that he couldn't get answers from planners.

If Denevi is still going to pursue building the golf course, the county is still asking for a $450,000 geotechnical study of the surrounding hillsides before it can get back to the Planning Commission.

If Arlie brings in a new golf course developer, any project proposal would need to start at the beginning of the county planning process.

Musumeci refused to discuss specifics about the golf course deal on the record. He also declined to talk about Arlie's recent sale of a five-acre parcel currently used as a CDF fire station and helicopter base. Records indicate the sale was made to Eugene, Ore.-based Frontier Land and Development.

Greg Buller, Frontier's property manager, says Arlie, frustrated with continuing negotiations to sell the land to the state of California, approached Frontier with the land and sold it. "It was mutually beneficial to both parties to do the transaction," Buller said. "We wouldn't have known about it without Arlie." Buller added that he had had "prior dealings" with Arlie over the last few years.

Frontier Land and Development is the investment arm of Frontier Technology, which makes equipment for hydroelectric energy production and hydroelectric power plants, and sells electricity in Oregon and other locations, he said.

Buller says he's not sure where his company will pick up in the negotiations with the state, which could not agree on a price with Arlie. CDF wants to remodel and upgrade the facilities at the base, but won't do so until it owns the land outright. CDF still has about two years left on its 49-year lease for the land.

"We don't have any obligation to sell to anyone," Buller said. "Eminent domain is irrelevant to us. ...We're not convinced the state is going to acquire this property, and if they are, it's still a matter of market value."

Buller said that Frontier will be looking at "other business opportunities" for the land, but would not say what those opportunities would be. Frontier owns commercial, residential and timber land in Oregon, but this is its only holding in California, he said. Arlie and Frontier are not connected to one another, he said, although the two companies did consider going in on a commercial/residential joint venture in California.

Metro reporter Jim Rendon contributed to this report.

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