Developer sues Pinal board - East Valley Tribune: News

Developer sues Pinal board

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Posted: Saturday, February 19, 2005 5:56 am | Updated: 7:34 am, Fri Oct 7, 2011.

For the second time in four years, the Pinal County Board of Supervisors is accused of helping Scottsdale developer and utilities baron George Johnson get away with unlawful business practices in connection with a water improvement district.

A lawsuit filed Monday by developer Lennar Communities Development claims Johnson convinced executives to put his company in charge of water and sewer services for its planned community in Maricopa, and that Johnson has failed to meet deadlines or fulfill promises.

The lawsuit states that the Board of Supervisors — which also governs the water improvement district Johnson’s company, Sonoran Utility Services, was hired to serve — ignored pleas to oust the utility or force Johnson to abide by his contract.

Lennar’s accusations have much in common with those made by Queen Creek-area utility Diversified Water, which accused Pinal officials of illegally creating a water improvement district in 2001 and putting Johnson in charge of it.

Pinal officials settled the case in April, after which Chairwoman Sandie Smith, D-District 2 of Gold Canyon, vowed to keep the county out of the utilities business.

Smith said Friday that she was not aware of the lawsuit filed by Lennar.

"I haven’t seen it, so I don’t know anything about it," she said.

Neither Johnson nor Pinal County attorneys could be reached for comment late Friday.

Johnson is facing another lawsuit, also filed Monday, by Arizona Attorney General Terry Goddard on behalf of five state agencies, including the Department of Environmental Quality and the Game and Fish Commission. It claims one of his development companies bulldozed about 720 acres of state land north of Tucson, damaged protected historical sites and illegally destroyed desert plants and animals in connection with the ill-fated La Osa Ranch project.

Johnson International attorney Lee Stein has stated that Goddard’s office "fundamentally misunderstands the facts" of that case, and that the company has been working with state officials to rectify the situation.

The Lennar lawsuit also claims Johnson assured landowners he had no real estate interests in the area but later sold the company’s assets to area developer and convicted white-collar criminal Conley Wolfswinkel.

"Now we’ve been told by Mr. Johnson that he no longer has any interest in Sonoran and he has turned over the entire ownership and operation to a Wolfswinkel-controlled entity," states a letter from Lennar attorney Clare Abel to Pinal officials in March 2004. "We have no information about Mr. Wolfswinkel’s experience in water and wastewater utility management."

Despite repeated requests to act in the interests of area landowners in the water district, known as "District 387," the lawsuit claims the "Board of Supervisors did nothing."

The complaint states Johnson failed to complete construction of the utilities infrastructure within the agreed time frame and also refused to help Lennar obtain needed app roval from regulators.

"Defendants failed to provide information and approvals to Lennar and held them for ‘ransom’ so that Lennar would remove its objections to the district," it states.

Lennar is seeking unspecified damages for what it claims are significant losses as a result of Johnson’s failure to perform and the county’s refusal to hold the utility accountable.

"The plaintiff’s interests have been damaged and are still threatened by the defendants’ failure and refusal to comply with their contractual, fiduciary, statutory, and other obligations," the complaint states.

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