But McElhanon is convinced somebody's been trying to chow down on him. This 59-year-old cowboy businessman is certain that one of the state major developers is conspiring with the Arizona Department of Land to get rid of him--to force him to give up his state land lease and move out so a newer, fancier development can replace him.
This isn't the first time McElhanon has thought he was the object of a secret plot. You get the impression conspiracies are as real to him as the hungry hawks circling the granite slopes of the mountains in his backyard. But this time, he bandies about a fist full of state records that back up his strange story. This time, Harvey McElhanon isn't just serving up beans.
"Maybe I'm just paranoid, but isn't this interesting?" he begins, thrusting yet another document forward.
IN 1983, HARVEY McELHANON decided to expand his patio to provide an outdoor cookout area. He already owned the ten acres the restaurant sits on, but he needed more room. He signed a ten-year lease with the state land department on a twenty-acre parcel just a short wagon ride from his property. For about $10,000 a year, McElhanon could cart all the tourists he wanted in a horse-drawn wagon to a cookout on those twenty acres. He put in a few picnic tables, a couple of grills, some bathrooms and a bandstand. A twelve-hour-a-day workaholic, McElhanon's expansion turned the restaurant from a little mom-and-pop steak house to a 1,600-seat turista trap that he claims grosses $4 million a year. He calls it the "World's Largest Western Steak House."
In 1986, McElhanon suddenly got the World's Largest Land Lease Bill. The state informed him it had reconsidered the value of his land, deciding it was worth $150,000 an acre and therefore, was raising his rent 1,500 percent. His bill went from about $10,000 to $150,000. The next year was even worse: the state now wanted $300,000 a year to lease a piece of dirt for outdoor barbecues.
McElhanon has discovered that his new bills started arriving a year after developer Jerry Nelson told the state he and his associates wanted to buy 640 acres of public land in the area for an elegant housing development that included a city park, a desert museum and shops. Nelson, who has a 20 percent interest in the project, wanted to call it Troon North to play off the success of his Troon Village development. Oh yes, and the development plan just happened to include McElhanon's twenty-acre cookout site.
However, Nelson says, he doesn't even want McElhanon's twenty acres, and "never did." "Most of that twenty acres is zoned commercial. That was highest and best use for benefit of the people of Arizona," he says. "It is zoned for offices and restaurants. Perhaps someone will put in competition for Mr. McElhanon, I don't know. Perhaps somebody can come put an attractive cowboy restaurant on that land.
Nelson grumbles: "People who have state leases should not have the advantage over others in the marketplace. He has the lease. I don't have the lease. He does. Don't put his shoes on my feet."
McElhanon doesn't believe Nelson. "They want a class development and I am an eyesore," McElhanon says, admitting his place sits like a poor pitiful cousin in an area where rich folks now live. "You don't do the things that happened to me unless you want to eliminate somebody. I think Jerry Nelson has tremendous clout with the land department."
State Land Commissioner M. Jean Hassell bristles at the suggestion his department persecuted McElhanon because it was cozy with Nelson. "I don't even know Jerry Nelson," he says. "I've met him and I've shaked [sic] hands with him, but I don't know him. I would definitely not call his relationship with the state land department cozy. He has no reason to be cozy with us, nor we with him." Hassell says the department must have upped McElhanon's the lease because the land was rezoned to commercial and reappraised. Even so, he acknowledges that upon becoming commissioner in 1987, he instantly saw the rent was excessive and began negotiating to bring it down. But Hassell says--and McElhanon agrees--the two could never negotiate a lower rent. "I told him two things. I told him we'd set a reasonable rent based on his use of the land. I also told him we would not renew his lease when it expired. I was fair and straightforward with him. There is no conspiracy."
But what Hassell can't explain is the conspiratorial-sounding note in the official files.
When New Times reads him the note, Hassell says he's never heard of it before but surmises it must have been written to his predecessor, Bob Lane. The undated note was written by David Hay, then a Nelson employee. The note makes it clear that Hay wanted to be sure McElhanon wouldn't be in the way much longer. Hay writes: "Bob: This lease [McElhanon's] expires in 1993. We better explore terminating because [Nelson's] commercial piece, museum, and multifamily piece, all of which are partially included within this twenty-acre commercial lease, would be developed before then."
Lane, then the land commissioner, also denies Nelson and the land department conspired to kick McElhanon off the land. But he says it is perfectly logical that the developer wanted McElhanon's lease terminated so he could get on with his project. That's why the note doesn't surprise him, he says. As a matter of fact, it probably was written to him, although he doesn't remember receiving it.
Developer Nelson, however, says the note didn't have anything to do with him. Sure, Hay worked for him at the time, but the note was "just his personal opinion and certainly not our company's policy."
"I don't want that twenty acres," Nelson says for the fourth time. "I have never discussed that twenty acres with the state land department. And if McElhanon says there's a conspiracy, it's either a misunderstanding or a deliberate lie. He never even contacted me on that matter."
The note isn't the only questionable finding in the land department's files.
In September of 1986, the department ordered an appraisal of the 640 acres to be developed. It came in at about $40,000 an acre, or $25 million. But for some reason officials can't explain, the land department almost immediately ordered a second appraisal. This time, it came in at about $23,000 an acre or $14.6 million.
Lane says he was surprised when the second appraisal came in so low. As a matter of fact, he insists, he ordered the second valuation because he thought the original appraisal was too low. "Guess that just shows you the land commissioner can be wrong," he says.
Even before McElhanon starts in on the two appraisals, he's outraged the state could have ever thought his land was worth $150,000 an acre when the stuff next door was valued at about $23,000 an acre.
Once again, Lane has an explanation for the vast difference in value between Nelson's land and the cookout area: "McElhanon's land was rezoned commercial. For commercial property, $150,000 is a fair rent." However, even Lane is shocked that McElhanon's rent shot up to $300,000.
In May 1989, the state sold the land to Nelson for the lower appraisal value. Commissioner Hassell justifies the sale, noting land values in Arizona have dropped and are now at the lowest in recent history. When asked why the land department didn't wait to sell the land until rock-bottom prices went back up, Hassell explains: "The land was ready for market. There's no guarantee real estate will come back to its previous value."
The commissioner also points out that Nelson actually paid more per acre because he is required to donate about 200 of the 620 acres to the city of Scottsdale for "Pinnacle Peak Park." Elliott Pollack, a local real estate developer who is knowledgeable about Pinnacle Peak land, tells New Times the price Nelson paid is the going market price for raw land in that area.
WHEN HARVEY McELHANON bought Pinnacle Peak Patio in 1970, he moved into the same scenery enjoyed by developer Jerry Nelson. Craggy mountain slopes. Breathtaking beauty. Far enough from the congestion of Scottsdale to still have clean air and quiet nights; close enough to easily mosey into the West's Most Western Town. Nelson was just beginning to make the area a desert jewel. He started building giant homes for the wealthy--his own home is one of the largest in the state. He liked good French cooking, so out in those boondocks he imported Vincent Guerithault and set him up in an astonishing restaurant named Vincents. (When Vincent left to open his own place in Phoenix, Nelson brought in renowned chef Christopher Gross.)
By 1995, Nelson has plans to invest $115 million to develop 7,000 acres into homes, commerce and resorts, according to a statement he filed with the land department. He projects are noted for being environmentally sensitive.
In contrast, McElhanon admits his Pinnacle Peak Patio is an eyesore whose architecture can only be described as "early western junk." Yes, he admits, it clashes with Nelson's classy developments. But he says that doesn't mean he should be mistreated.
THESE DAYS, McELHANON has more windmills to fight. He thinks the city of Scottsdale and Nelson purposely rerouted a road which used to run in front of the restaurant. He believes the idea was to run him out of business. "Oh, that's just not true," Nelson says. "The road runs right by the front of this property. He will not accept the truth. Some people still feel the world is flat, too."
"There's no question they want to crowd me out," McElhanon counters. Then he adds: "I probably will end up filing a lawsuit against Jerry Nelson, the city and the state on conspiracy charges.
"I am persuaded that nothing happens by accident." In fact, he doesn't think it's at all an accident that the restaurants in Nelson's Pinnacle Peak Village trumpet this slogan: "An evening at Pinnacle Peak doesn't mean cowboy steak and beans anymore."
Pullquotes need to be replaced, too.
Thanks, cj
This time, Harvey McElhanon isn't just serving up beans.
The state now wanted $300,000 a year to lease a piece of dirt for outdoor barbecues.
But land commissioner Hassell can't explain the conspiratorial-sounding note in the official files.
