Chapter 30

Saturday morning's breakfast was a fix it for yourself layout: cereal, danish, instant oatmeal, eggs, bacon, etc.

Michael and I were having coffee on the patio when Michael asked, "How are you going to approach the meeting today?"

"I've a pretty good idea how we can do this deal and get a better return on our investment," I told him. "The meeting is scheduled for ten and I want to be at George's office by nine to get set up."

Michael told me he was ready to go whenever I was.

Tamara came out looking like a million bucks. She had on a sundress. She knew I loved her legs and seemed to dress accordingly. "What time are you leaving?" she asked.

"In a few minutes," I said. "We should be back by three this afternoon. Could you and Trish make sure everyone has directions?"

"Don't worry," she said. "We'll take care of everything."

Michael and I said goodbye and we took the Jag. I left the Expedition for Tamara in case she needed to use it to pick up anything. As we drove to George's office, I wanted to ask Michael about the last two nights but I figured if he wanted to talk about it, he'd bring it up.

I made a phone call to the club to verify that I had two tee times for nine am on Sunday and the pro confirmed it.

George was already at his office when we got there. Tom arrived about five minutes after we did. Bob arrived another ten minutes later. George showed me the figures he put together concerning the property and the improvements that would be needed. Tom had the revised contracts. Bob had come up with the figures on the required investment capital.

"Gentlemen, I think we are ready," I said.

Phil arrived exactly at ten and Blaine was with him. I noticed that they did not bring their business manager with them. George led us to the conference room. His secretary had been busy making sure we had coffee, tea, soft drinks, OJ, and bottled water. I could tell George was enjoying hosting this meeting.

I started off with introductions of my team. I then went into an explanation of what I thought McKenzie was trying to pull. I explained that we, the consortium, would not have any tangible collateral.

"Now for the new plan," I said. "Phil, you said you want to invest in the Scottsdale area because it is where your home is. Blaine, I'm not sure if you're in this for the money or if you have a stake in investing in Scottsdale. Michael wants a safe long-term investment. I was only in it to expand into real estate investing.

"George has been in contact with the landowner. I think if we guarantee him a nice percentage and some upfront capital, he will come into this with us. McKenzie's option would have paid him $8,000,000. He has mortgages totaling over $7,500,000. He made some bad commodity investments and had to come up with a lot of money. He first sold the option to McKenzie five years ago to cover some of the calls. He later borrowed against the land.

"Next, we have to look at the improvements that will be required to market it as a premier subdivision. George has the handouts. Please look at the proposed cost and the fact that 40% of the land will be used for community areas. That will leave us with 240 acres to subdivide. The lots will average half an acre. That is 480 lots to be marketed at an average of $150,000 each that gives us potential gross revenue of $34,500,000.

"The cost of the improvements will run around $5,000,000. If you take the cost of the land to be $8,000,000 and the improvements and the plan management of $2,000,000, throw in a $5,000,000 contingency and $2,000,000 to the landowner. I figure we'll need $22,000,000. Between Phil, Blaine, Michael, and me, we were ready to invest $49,000,000. Another $1,000.000 of investment capital will be explained later. That leaves $28,000,000 of investment capital available," I told them.

Phil spoke up, "John, if your figures are correct, then McKenzie was looking to pocket at least $16,000,000 of our investment money for himself."

"Exactly," I said. "Wait, there is more. Phil, do you know James Jones?"

"Yeah, he designs and builds golf courses," he said.

"Well he is the designer of the golf course associated with the proposed land deal," I told him, "and the amount that McKenzie is to buy in with is $15,000,000. McKenzie is supposed to finalize that deal next month."

Blaine finally spoke up, "John, where did you get all this information?"

"George, Tom, and Bob did some research. Some of the information was available at the Scottsdale Planning Office. Tom has a friend there," I told them.

"George, can you bring in our mystery guest?" I said. George went out and came back in a few minutes later. "Gentlemen, meet Ralph Ayers." I introduced Ralph to each person there. "Ralph is the landowner. Tom looked over the option and found there are two loopholes, one for McKenzie and one for Ralph. The loophole for Ralph is that McKenzie has to present a Certified Check for the entire amount of $8,000,000."

"Can't he borrow the money from a bank?" Blaine asked.

"It's possible, but that's where Bob comes in. Bob has some very influential friends in the banking industry and the word is out. I doubt McKenzie could finance a car right now," I told him.

"This is my proposal: we all put up the money that we had planned. Phil, Blaine and I put up $15 million each; Michael, $4 million; Tom, Bob, and George $350,000 each, and Ralph, no money, just the land deal at the option price. We'll pay Ralph $2 million once the land purchase is completed."

Phil spoke up again, "John, what about the excess $28,000,000?"

"I was just getting to that," I said. "George, bring in mystery guest number two."