HOUSE OF THE RISEN SON

NANCY JACKSON MADE CHUY'S NIGHTCLUB INTO A MUSIC MECCA. NOW SHE'S DOING THE SAME FOR THE EAGLE'S NEST CHRISTIAN EMBASSY.

"I could never go to a regular church," Jackson says. "I'm not into canned messages. But they were supposed to have good music, so I drove up there one day."
Sitting quietly in the back row of the church, listening to Maiden preach, Jackson says her first impression was that "he was out of his mind." But then the music began, and "an astounding realization" hit her.

"The music, the special moments, they were right here," Jackson remembers. "These musicians were doing what Jim and I had been trying to do with Chuy's. Only they were doing it sober, and doing it without the business grief and trouble.

"This was the Chuy's of churches."
Jackson began to weep, and says she felt compelled to begin walking along the long aisle toward the stage--where she fell to her knees, tears streaming down her cheeks.

"I was so happy," she says. "I had found it."
And as it turned out, just in time.
@rule:

@body:There was trouble with Hayden Square from the start. When it began accepting tenants in the late 1980s, the office-and-retail development--located just south of the Salt River bridges on Mill Avenue--was touted as the centerpiece of Mill's transformation from slumscape to fashionable boulevard.

Mill grew and prospered, with shops, nightclubs and coffee houses sprouting up, making it a bustling nightlife mecca for the under-30 set. But most of the new businesses opened farther south on Mill, several blocks from Hayden Square.

Deprived of the pedestrian traffic merchants enjoyed down the street, the Square's businesses floundered. America West Airlines, itself financially troubled, and Chuy's were the largest and oldest tenants--and two of the few providing Hayden Square a consistent revenue stream. It wasn't enough. In the spring of 1992, the company that had built Hayden Square went bankrupt, and a court-appointed receiver--Mike Magolino, a Phoenix property manager--was assigned to look after the development for several months before Met Life assumed full legal control.

Magolino, a blustery New Yorker, immediately shook up Jackson by telling her that her rights to the Hayden Square Amphitheatre--a grassy, outdoor venue located in front of Chuy's proper--were being suspended.

To Jackson, that was a calamity of epic proportions. Chuy's sponsored large concerts with national acts like Edie Brickell, Squeeze and Branford Marsalis in the amphitheatre to subsidize smaller, eclectic shows inside the club. Without the cash flow from the amphitheatre, Chuy's stood to lose a goodly portion of its operating capital.

Exclusive use of the amphitheatre was a guaranteed provision in Chuy's lease. But Met, because of the bankruptcy, was no longer legally bound to honor it.

Although Jackson was cut off from much of her revenue stream, Magolino continued to demand full rental payments from Chuy's--while the amphitheatre remained closed month after month.

"It seemed like he wanted to drive us out of there and out of business," Jackson says. "And it was approaching the point where we wouldn't have any choice."
Other Hayden Square merchants confirm that Magolino seemed to be pushing them out, too. He reportedly stressed to several shop owners that Met didn't have to honor their leases, and could evict them at any time.

"This guy would never tell us what was going to happen," says one merchant who recently moved out of the development. "The result was that a lot of us packed up and went to other locations, where we knew we would have some stability.

"I was never able to get a straight answer from [Magolino] about whether Met wanted us to pay more, stand pat or get out. And we kept wondering, why is he trying to drive us out of here?"
Victor Goliac, Jackson's real estate broker, who was in charge of negotiating with Magolino, thinks he has an answer. Goliac insists that the court-appointed receiver was trying to drive Chuy's and other merchants away from Hayden Square to drive down the property's value--so that he could buy it himself from Met at a reduced price.

"Hell, Magolino told me he was looking to buy Hayden Square at pennies on the dollar," Goliac says. "And if there were fewer tenants in the building, it would be less profitable and Met would be willing to unload it for a bargain.

"He wasn't looking out for Met, or for tenants like [Jackson]. He was looking out for himself."
Magolino did not return numerous telephone calls from New Times. But Mike Halperin, a Los Angeles-based Met Life executive in charge of coordinating the company's Arizona real estate holdings, confirmed that Magolino did offer to buy Hayden Square in 1992, while he was serving as receiver.

Maricopa County Superior Court Judge Stanley Goodfarb, who appointed Magolino to act as receiver--at Met's request--says that such conduct is "egregious, to say the least."

"It is totally improper for a court-appointed receiver to do anything but look after the best interests of the property, its tenants and its owners, and had I known about his effort to buy the property, I would have made sure it was stopped. It's simply unethical."
But he didn't know about it, and court records indicate that Met never told him. Met Life's Halperin declined to discuss Magolino or Hayden Square, saying the company "makes it policy not to talk about such things." At the time, Jackson was also unaware of Magolino's secret agenda. The only thing she was certain of was that his actions were threatening her investment in Chuy's.

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