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sale of one-half of Cherry’s interest in the Flagstaff Ranch
Water Co. instead of Cherry’s full interest pursuant to the 1996
purchase agreement.
Petitioner and Walker prepared an offer and submitted it to
Rex Maughan for approval. Petitioner sent a letter to FRGC’s
investors in early January, calling for a meeting on January 12,
1998, to vote on whether to proceed with the new purchase
agreement. FRGC’s operating agreement provided that more than
one-half of the 50 outstanding partnership units had to agree to
continue with the partnership. Although 16 units voted for
redemption of their interests in FRGC, 34 units voted to continue
with the partnership. Each redeemed unit received $11,000, which
was $14,000 less than what was paid for the unit.
FRGC and Cherry executed a new real estate purchase
agreement (1998 purchase agreement) on January 15, 1998.
Flagstaff Ranch issued its private offering memorandum on
February 10, 1998. Cherry conveyed the subject property directly
to Flagstaff Ranch on June 29, 1998, and the parties closed
escrow on June 30, 1998.
General Development Plans
In March 1999, a new general development plan report (March
1999 plan) was presented to the Coconino County Board that
substantially complied with the zoning approved in the 1983
minutes. The Coconino County Board approved some of the March
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