In the fall of 1967, the British rock band, Eric Burdon and The Animals, recorded an album and a song called “The Winds of Change.”
If ever there was a year you could apply that phrase to describe the situation in Fountain Hills, it would have to be 1977. No, the town wasn’t going psychedelic.
An event in that year is the subject of this week’s History Lesson.
A year earlier in 1976, Robert McCulloch, Sr. made the announcement that the company would be getting out of the land development business. They would not be starting any new ventures in new town development. He said they would be looking for another corporation that was already in the land business to acquire the McCulloch assets. In addition to Fountain Hills, McCulloch Properties had new city developments in Lake Havasu City, Ariz., and Pueblo West, Colo. They developed recreational home communities in Spring Creek, Nev., and Holiday Island, Ark.
They also had three developments which they had purchased and were completing development within them. The developments were West Cliff Park in Amarillo, Tex., Silver Lakes, Calif., and Las Palmas, Puerto Rico.
McCulloch’s death helped speed up that process and by the end of 1977, Lorne Pratt had acquired MPI’s property assets. Pratt was running McCulloch Properties at the time. He obtained a 51% control of the properties company. The name was changed to Pratt Properties.
In 1978, a Texas businessman named Charles Hurwitz, entered the picture. His firm, Federated Development Company, later became MAXXAM, Inc. He became interested in McCulloch Oil’s heavy oil holdings, its cheap assets and interesting land holdings. He negotiated the acquisition and was successful in the purchase. With the purchase of McCulloch Oil, he found the parent corporation only had a 49 percent interest in McCulloch/Pratt Properties. After touring the properties and reviewing the books of the Pratt operation, Hurwitz decided he wanted total control of the properties’ subsidiary and questioned Pratt on his accounting practices. After a series of nose-to-nose negotiation sessions, Hurwitz worked out an agreement that returned Pratt’s 51 percent back to McCulloch Oil.
When word of the Hurwitz acquisition of Pratt Properties became public, there was a rumbling that went through the community. The community leaders liked Pratt. He lived in Fountain Hills and during his time of controlling the properties company, he donated the Community Center and a future Civic Center site to the Community Association.
Hurwitz was labeled a corporate raider and there were many rumors circulated in the community that he was going to liquidate the property for the “fast buck.” Hurwitz hired the Victor Palmieri Co. for the interim management of Pratt Properties. The Palmieri firm was well-recognized for operating companies and assisting business and governmental institutions in the management of diversified asset holdings. They named George Anderson president of Pratt Properties in July 1978. On January 1, 1979, McCulloch Oil (now a part of MAXXAM) regained full control of Pratt Properties. The name was immediately changed to MCO Properties and Anderson was retained as president.
Over the ensuing years, Hurwitz demonstrated that he was sincere in his interest to develop Fountain Hills.
“When I first toured the property, I thought Fountain Hills, with its magnificent rolling hills, was absolutely gorgeous and it had really good potential to develop into the special community that it has become,” Hurwitz said.
“We changed the entire sales program and did whatever it took to get the development going again. We improved the overall quality of the community. That was our goal and that’s what happened.”
A new master plan was created that divided the community into “neighborhoods” with names such as SunRidge, North Heights, Crestview and FireRock. Along with those new neighborhoods came new interest in the community by quality custom-home builders. By the early 1990s, there was a housing boom going on and prices began to escalate. Fountain Hills became recognized as an “affluent suburb of Phoenix.”
But as more people moved to the new community, there was concern of some residents that maybe the growth was coming too fast and would eventually move up the hillsides of the McDowell Mountains.
The Town council, led by Mayor Sharon Morgan and Councilwoman Sharon Hutcheson, pursued the purchase of hillside properties from MCO for the McDowell Mountain Preserve. Following months of negotiation between Town and MCO officials, a compromise price was agreed upon.
Hurwitz later stated, “It probably turned out O.K. It’s the same old thing, a developer wanting to develop his property, especially those ridge tops that give you the greatest views. Look, we’re all environmentalists, but for some it is very emotional. They just don’t want houses on the mountains. I don’t see how building a house on a hilltop changes the environment.”
As of mid-2010, the economy was showing signs of turning around from its two-year downturn. Hurwitz said, “MCO is prepared for the turn-around.”
“Fountain Hills is in a magnificent location. It will come back. We’re looking forward to the challenge. Sometimes, you can’t push it any harder than what the market will bear. When it comes back, we’ll be ready,” he said.
Well, I’ve run out of space for this week. I’ll have more news of 1977 next time.