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[whitespace] Neighborhood Bully

Los Gatos--John Musumeci, the developer looking to build on 1,100 forested acres above Lexington Resevoir, has been picking legal brawls around here ever since his Arlie Land and Cattle Company showed up in town in 1997. He's recently lost two of those fights. His attempt to silence local critics by suing the Greenbelt Alliance was thrown out of court on Thursday of last week. Thirteen days earlier, Musumeci failed in an effort to evict would-be golf course tycoon Pete Denevi from a portion of the property.

"We feel vindicated," says Vicki Moore, program director with Greenbelt Alliance. "The decision in the suit is a great victory."

The lawsuit, which Arlie filed in June, stems from the company's aggressive push to sell off lots on one of the largest plots of forested open space in the county. On the site above Highway 17 and the Lexington Reservoir, hundred year old redwood trees cling to steep canyons, rushing clear creeks course along the forest floor and high open fields provide sweeping views across the Santa Clara Valley.

The property was owned by the Jesuit order until it was sold to Hong Kong Metro Reality in 1989. In late 1997, Arlie bought the property and subdivided the land to sell it for luxury estates. When the company used 100-year-old documents to gain 13 additional lots on the property, environmentalists decided to fight back.

Greenbelt Alliance, which had been stirring up support to have the property turned into a park, sent out a press release accusing Arlie of using "shell companies," puppet subsidiaries set up to hide business dealings, to evade zoning regulations. After exchanging a spate of letters, Arlie took Greenbelt to court for defamation.

"Arlie used the courts to try to stifle public participation in an important issue," says Michael McCauley, Greenbelt spokesman. The court evidently agreed, and on Thursday, September 24, the case against Greenbelt was dismissed under a California law that protects interest groups like Greenbelt that engaged in public debate.

"Greenbelt Alliance has been around for 40 years and we have never been sued," says Vicki Moore, the organization's program director who was named in the suit. "We have never dealt with a land owner quite like this."

Though open space preservation groups have approached Arlie on many occasions in order to purchase the property, nothing has come of it. "Arlie has made every attempt to maximize the dollar value of property without regard to environmental or community concerns," Moore says.

Though the suit with Arlie is over, and the company will have cover Greenbelt's legal expenses, things are far from settled. Arlie still intends to see the property developed. And Pete Denevi, a former Los Gatos High School football coach, is still pursuing his plans to build a country club and golf course on the lower portion of the property near Bear Creek Road. His recent court room victory over Musumeci puts him a step closer to his goal.

Since Hong Kong Metro owned the property, Denevi has had an option to purchase. But since Arlie rolled into town, it has been tougher for Denevi to maintain that option. Arlie sharply increased the price of the option from $100 a day to $1,000 a day. And in July, Musumeci tried to terminate the agreement, claiming Denevi had missed a payment.

Though that disagreement was resolved, Musumeci again claimed that Denevi had missed a payment, this time for $2.5 million. Denevi says he had an extension in writing from Musumeci and had to go to court to have a judge decide. Three weeks ago, the judge decided in Denevi's favor.

In an interview Wednesday, Sept. 29, Denevi said he has had enough of Musumeci's games, and finally has bought the property outright for $8 million--$2 million more than Hong Kong Metro was asking.

Environmentalists are still opposed to Denevi's golf course, a development which Moore says would make the property less valuable as a park.
Jim Rendon

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Web extra to the October 1-7, 1998 issue of Metro.

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