Trio took software idea, built Magnus into giant

By most accounts, G.S. Jaggi, then a young banker with a master's degree in economics from the University of Texas, had an idea for streamlining the lending process with the help of in-house computer software.

Through business, Jaggi knew Thomas Sullivan Sr. and his son, Thomas Sullivan Jr., owners of Title Security Agency of Arizona. He made a pitch, and the Sullivans gave him the financial backing he needed.

"They said, 'It sounds like a good plan, and we'll work together with you to put it together,' " said Jim Horvath, president of Town West Design and Development, which built the company's headquarters at 603 N. Wilmot Road.

First Magnus started with a staff of 12, who originally worked out of a small apartment.

At a time when the dot-com industry was peaking and many lenders were using the Internet to bypass brokers, the company built its business model around the idea of using software not only to search for more loan options, but also to bring an element of transparency to the lending process. It developed software that could be shaped to meet the company's specific needs.

First Magnus grew rapidly in recent years — so rapidly that it became one of the nation's largest mortgage lenders and one of Tucson's largest employers.

Until the company's sudden collapse on Thursday, its success fueled the success of its founders. Tom Sullivan Sr. talked with the Star on Thursday, but neither he nor either of the other two founders could be reached on Friday.

G.S. Jaggi

The most hands-on of First Magnus' founders, Jaggi had recently been working with both the city of Tucson and the University of Arizona's Eller College of Management to integrate First Magnus into the community — actions that friends say reflected his commitment to Tucson as well to promoting and expanding First Magnus.

In recent years, First Magnus had been working to open a federal bank, and Jaggi thought making community inroads would be a good way to establish the lender's name while giving back.

"He really wanted to be involved with Eller because he wanted to give college students an opportunity to be mentored by a business that was growing and succeeding in the local marketplace," said Barbara Peck of LP&G Marketing.

In recent years, Peck worked with Jaggi as a consultant, helping First Magnus build its name recognition and make a transition from its more commonly known subsidiary, Charter Funding.

Peck described Jaggi as a family man who never flaunted his success but was devoted to building his business.

The decision to keep First Magnus' headquarters in Tucson, when it could have been anywhere in the country, she said, was a reflection of his commitment to the Old Pueblo.

"He gave back very generously in the way of monetary contributions to the causes that he cared about," she said.

The Sullivans

As successful as First Magnus once was, Horvath, of Town West, said he never got the impression that Jaggi or the Sullivans envisioned the mind-blowing growth that turned the local lender into a national powerhouse.

Horvath built First Magnus' corporate headquarters, a project that consisted of two buildings — one about 70,000 square feet for First Magnus and the other about 50,000 square feet for a separate business.

During construction, he said the Sullivans and Jaggi grew concerned that the building might be cavernously empty.

"At one point they weren't sure they would fill the building," Horvath said. "After a while they realized they could have used both buildings."

Thomas Sullivan Sr. was a captain in the U.S. Air Force and holds a law degree from the University of Colorado. He has lived in Tucson for more than 30 years.

His son, Thomas Sullivan Jr., has been active in the Tucson Conquistadores and is a member of the Fiesta Bowl Committee and the University of Arizona Foundation Board.

Humberto S. Lopez of HSL Properties is a former chairman of the UA Foundation Board and nominated Sullivan Jr. as a member partly because of their friendship, but partly because of the active role First Magnus had taken in Tucson.

"First Magnus was being very involved in the community," Lopez said. "We wanted somebody like him."

Lopez has known the Sullivans since 1984, when they met at a weekly lunch attended by many of the movers and shakers in Tucson's business community.

He said he's spoken with the elder Sullivan since the collapse and sees First Magnus' downfall as a symptom of the market — not a reflection of its founders.

"Tom, his biggest loss was the loss that the employees are suffering," Lopez said.