Builder Johnson: Visionary or bully? - East Valley Tribune: News

Builder Johnson: Visionary or bully?

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Posted: Sunday, August 3, 2003 3:10 am | Updated: 2:05 pm, Thu Oct 6, 2011.

Generous philanthropist. Overbearing bully. Bold visionary.

These are ways people have described George Johnson, a Scottsdale developer whose unassuming name belies a complex and enigmatic character.

He can be charming, intimidating, warm and volatile — all within the same conversation.

Johnson the philanthropist has built a highway and a school in Pinal County, donated facilities such as a golf course to hold charity events and raised more than $100,000 from developers to benefit nearby San Tan Mountains Regional Park.

Johnson the bully is a die-hard capitalist who has been accused of using his close ties with Pinal County officials to benefit his companies and force competitors into submission. Johnson said he is worth about $200 million and his many business interests include water, sewage, garbage collection and cable TV services, which he provides to several communities in the county.

Johnson the visionary invested millions of dollars to turn a desolate section of northern Pinal County into a thriving residential community southeast of Queen Creek known as Johnson Ranch. Sold in 1999 to Scottsdale-based Sunbelt Holdings, it is now one of the fastest-growing areas in the East Valley.

The Arizona native was born into a family of produce farmers who moved to the state in 1914. Johnson worked for the family business until the death of his father, Harry Johnson, and embarked on a second career as a real estate developer in the late 1950s. His Scottsdale-based Johnson International empire now includes about 30 companies, and Johnson said he is responsible for developing a good portion of north-central Scottsdale, including a stretch of Hayden Road near McDonald Drive.

These days, Johnson seems to prefer doing business in the tight-knit, rural communities of Arizona, and critics say he's not above scratching a few backs or intimidating people to get his way.

One pending lawsuit claims that Johnson and Pinal County officials worked together to force water company Diversified Water Utilities Inc. out of an area that Johnson wanted to serve. However, Johnson says he was merely taking advantage of a business opportunity that arose when area developers petitioned to have Diversified's service area converted into a county-run water improvement district.

Pinal County awarded Johnson a 30-year contract to serve the district, which was condemned in 2001 despite Diversified's clean operating record. Diversified owner Scott Gray said Johnson initially tried to buy him out, but Gray refused.

Diversified also has accused Pinal County of holding a crucial well hostage at Johnson's behest. Diversified's lawsuit claims that the company needed the well to provide fire protection to its customers, and that Gray was negotiating to buy it from former owner Russ Brandt when Johnson interfered and prevented the sale.

Brandt denied any interference by Johnson, but a taped conversation between Gray and Brandt reveals that Johnson had pressured Brandt not to sell it to Diversified. Gray even got a temporary restraining order against Johnson for interfering with his business. Ultimately Brandt sold the well to Pinal County — but Diversified claims it was Johnson who actually paid for it.

"One of my companies could have," Johnson said. "I'm not sure — I'd have to go back and research it."

Officials at the Arizona Corporation Commission have criticized Johnson's ties with public officials. Commissioner William Mundell contacted Queen Creek officials in July and warned them to vote against the district, known as the Skyline Domestic Water Improvement District, which the county has asked them to approve retroactively.

By law, the Queen Creek Town Council should have voted before the district's formation in 2001, but the county did not seek its approval until recently. Mundell accused Johnson of using county protection to escape the commission's regulatory jurisdiction, which does not include special districts.

Despite the accusations of Mundell, Gray and others, Johnson insists that he was not involved in taking away Diversified's territory, although he was aware of the effort.

"Let's face it — everyone knows what everyone else is doing," he said.

Still, stories of Johnson's boorish professional behavior abound. In Apache County, northeast of Phoenix, Johnson recently lost a battle over his efforts to build an RV park with prefab homes and cabins, said Larisa Bogardus, Apache County editor for the White Mountain Independent.

Johnson had hoped to lease state land on which to build the development, she said, but the State Land Department denied the request, and Johnson recently withdrew his application.

Wink Crigler, a rancher near the Little Colorado River's South Fork, formed a group called "Save South Fork" to lobby against the development, Bogardus said. Crigler's problems with Johnson date back to 2001, when he attempted to buy her property but she refused. She said Johnson then threatened to "force (her) out" and lobbed insults at her, the Independent reported.

Johnson even built a pig pen near Crigler's property and placed a sign on the fence that read "Don't Feed Wink," Bogardus said. He also wrote a letter to the Independent, promising that the "malicious, slanderous and libelous accusations" of Crigler and others "must, and will, be stopped."

"George is kind of abrasive and doesn't win friends and influence people very well," Bogardus said.

Johnson also has his supporters, particularly in Pinal County. For instance, the county has waived Superstition Valley Transit Plan fees for Johnson's subdivisions such as Magic Ranch and Mystic River Ranch in northern Pinal County.

One competing developer said the exemption will save Johnson millions on his residential housing projects, and Johnson himself admits his savings will approach $10 million. Johnson said the exemption was the result of a "grandfathering" agreement and not a special favor.

Not all of Johnson's fans are government officials. Nancy Roberts, a resident of the Sun Valley Farms V neighborhood near Florence, said Johnson bought that community's dilapidated water system and quickly returned it to working order.

Some area property owners filed a lawsuit to contest the sale of the wells, but Roberts said most are not residents and did not have to deal with the poor water quality before Johnson purchased the system in 1998.

Still, there are controversial elements to the purchase, including a record $80,000 fine levied by the Arizona Department of Environmental Quality against Johnson for transporting water to Sun Valley Farms without keeping proper records and digging a new well without DEQ approval.

Roberts — who was a member of the neighborhood's property owner's association board when Johnson bought the water system — said Johnson broke DEQ rules because her community was in dire need of water.

However, a lawsuit filed by property owner Melanie Rettler claims the association board ignored legal advice to have the wells appraised prior to the sale, and that resident Larry Quick, who was board president at the time, took a personal loan from Johnson just a few days before the board sold the wells in May 1998.

Quick admits to accepting a $125,000 loan at 8 percent interest, but said it had nothing to do with selling the wells, and that the board benefited from the sale more than Johnson did.

"Nothing was done under the table," Quick said, although he did not report the loan to the board or recuse himself from a vote on selling the water system. "It was strictly a business deal from which George was profiting."

During a taped interview in mid-July, Johnson struggled to keep his cool when confronted with Diversified's allegations of corruption and bad-faith manipulation. He also accused the Tribune, in interviews for this and other stories, of characterizing him in a bad light.

"You've intimated to people that I've got something dirty going on with Pinal County, and I don't like it," he said.

Johnson also criticized Diversified for filing lawsuits, adding that owner Gray has not made any philanthropic contributions to the community.

"And yet we're all dirty guys and he's real clean," Johnson said. "Well that's a bunch of crap."

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