A federal judge has ruled in favor of Crosby residents in their legal battle to prevent the owner of the golf club in their community from renting the facility out for such events as concerts, weddings, fashion shows, political fundraisers and corporate receptions.
The ruling was issued March 31 by U.S. Bankruptcy Court Judge Margaret Margaret Mann, following a trial that lasted about a week, said Andrew Berman, an attorney for the Crosby homeowners association, which brought the lawsuit in 2013.
The Crosby at Rancho Santa Fe is a private, gated community, northeast of the Rancho Santa Fe Village along Del Dios Highway. It has approximately 420 single family homes, and also includes the Crosby National Golf Club and its 18-hole course.
Mann’s ruling was final, said Berman, and was significant for the community. “It will maintain and preserve the private, residential character of this community,” Berman said.
Mick Dannin, a member of the Crosby’s HOA board and a golf club member, said, “We’re very excited about the ruling. It really means that we are a private, gated community and we can feel safe and secure in here.”
An attorney for the golf club did not respond to a request for comment by press-time. Golf club general manager Ed Sanabria said he could not comment because aspects of the case are still ongoing.
One matter that remains to be resolved is attorney fees and court costs. Berman said his clients are seeking reimbursement for those costs from the golf club, but the judge has not yet ruled on that issue. He declined to specify how much in court costs the plaintiffs will seek.
Berman and Dannin said the lawsuit was filed because residents felt the private nature of the community was being disturbed by “frequent” events held at the golf club facilities. Attendees of the events caused traffic jams getting into and out of the community, they parked on private streets and the community became “ inundated with hundreds of members of the general public who wander throughout The Crosby,” said the lawsuit.
Residents who live near the club also were disturbed by noise from events, Dannin said.
According to Berman, the HOA’s position was that county zoning laws forbid the use of a private club for public events. The Crosby is within the unincorporated area of San Diego County and comes under county land-use regulations.
“The court ruled that the golf club ownership cannot sponsor events, that the use of the club facilities are for the members and their guests, it is a private club and can’t be rented out to the public,” Berman said.
The luxury residential community and its golf facilities were built in the early 2000s by Starwood Development. In 2009, Escalante Golf, a Texas-based company, bought the golf course, clubhouse and other golf club facilities.
At the time of the purchase, the golf club was in a “financial death spiral,” experiencing annual operating deficits of $1.8 million, according to a court document filed by the golf club as part of the legal case.
Within three years, the document said, Escalante had turned things around, stabilizing the club’s finances through “aggressive expense management and event sales.”
During that period, the HOA board was controlled by Starwood, and “the club received no complaints about its events from the residents or the county of San Diego,” said the court document.
But things changed in 2012 when Starwood turned over control of the HOA to elected resident representatives, who found such events “distasteful and a nuisance,” the document said. The lawsuit was subsequently filed by the HOA.
According to the club’s court document, the club spent more than $2 million on legal fees, which drained its resources and caused it to file for Chapter 11 bankruptcy in 2015.
While the club has maintained that it needs the revenue from events to remain financially stable, Dannin said he and other community residents — many of whom are themselves golf club members — are convinced the opposite is true, that the club will attract new members if it operates strictly as a private club, which will in turn boost its bottom line.
The Crosby’s quality of life will also receive a boost, Dannin said.
“It’s really going to help us be the peaceful community we want to be,” he said. “I see cause for celebration and I hope all the neighbors are happy.”