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A Goodyear Family's Suit Against Jack Rose Claims He Lined His Own Pockets Instead of Developing Their Property

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Here's the kicker.

"Jack Rose caused the Wood Entities to agree to these terms not because they were in the Wood Entities' best interests," the suit says, "but because they satisfied Jack Rose's own selfish interests."

Does this remind anyone, just the littlest bit, of Jack Rose's dealings with the Corporation Commission?

I talked to Rose on Monday. I'd been warned that he is charming and smart and persuasive. Talking to him, it's easy to see how he was able to pull himself up from a Mohave Valley trailer park to Yale and Harvard Law and then a job at the Arizona Corporation Commission: He talks a very good game. I found myself liking him.

The facts, as he presented them, seem reasonable enough. Rose told me that he did a number of deals with one of the Woods, sister Margaret Wood Carl. She was a real estate broker, he says, and knew what she was doing.

He insists that the project was moving along just fine until the Woods screwed it up by overreacting to the sort of problems that plague any big development. He says they had no reason to file for bankruptcy: "They just shot themselves in the foot."

He claims he's an innocent victim. "What they're alleging is simply not true," he says. "I've been a friend of their family; we've done a lot of business together. They've made millions of dollars off their relationship with me." Now that the economy has crashed, he suggests, they've turned on him.

It all made sense. But then I went back to the evidence.

As it turns out, it's not just the Woods who are angry with Jack Rose. A suit has been filed over Rose's property dealings with a second family. And I talked to the representative of a third family who also made hefty payments to Rose, with little to show for it. I suspect they'll end up filing suit, too.

And though Rose argues that the Wood family gave him their blessing, he talks out of both sides of his mouth. Out of one side, he claims that Margaret Wood Carl was an experienced broker who knew what she was getting into. Out of the other, he claims that the Woods are only angry because they were too unsophisticated to understand that the project was on course.

So here are the facts.

As a broker, Margaret Wood Carl handled residential projects. She had no experience with development of this magnitude. That's why she brought on Rose.

And the Woods agreed to some terms that just seem absurd. When they originally hired Rose to help them sell or market the farm, they agreed to give him 6 percent of the selling price — plus $10,000 a month for five years, even though he's not a licensed real estate broker.

That meant Rose stood to make $600,000 even if he never sold an acre. Seriously.

Then there was the infrastructure. When the city agreed to buy the Woods' land for the stadiums, Rose set up the deal so that the Woods would take care of the basics, like grading and drainage. The city would reimburse up to $10 million.

Good deal, right? Except it was the Woods who were required to finance the work — and it was Rose who'd be getting the $10 million reimbursement.

Then there was the sales tax remittance. The Woods were to develop a "retail liner" around the stadium — shops, restaurants, maybe a bar. Because the family sold the land for the stadium to the city at far less than it was worth, the city agreed to give back up to $5 million in sales taxes.

Again, not a bad deal — except for one thing. The agreement was actually structured so the $5 million went to Rose, not the Woods. (And, of course, it was the Woods putting up both the land and the money.)

One final kicker: Rose started a new company to do the construction. The Woods claim the company ran up expenses, did work that wasn't necessary, and subcontracted to cronies.

And though Rose defends the work of his company, it's interesting to note that this is its first big project.

Phil Meyers is a Paradise Valley businessman, brought in by the Woods to restructure their deals in light of the bankruptcy. He says there were three national construction firms doing the actual work — but that Rose's company was supposedly managing them.

"To have a company as inexperienced as Civica there supervising them was just ridiculous," Meyers says. "Civica had never done a project like that before. They were in way over their head — and they cost everybody millions."

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Sarah Fenske
Contact: Sarah Fenske