Suite Deal

Developer offers city subsidy if Crowne Plaza ownership will sell

The developer of the $500 million Collier Center in downtown Phoenix guaranteed a partner in the Crowne Plaza Hotel that the city would provide a $10 million subsidy if the owners of Crowne Plaza agreed to sell the facility.

The offer was made by Tom Roberts, president and chief executive officer of Opus West Incorporated, to Steve Cohn, manager and a partner in the Crowne Plaza, during a July 22 telephone conversation that Cohn taped. Cohn provided a copy of the tape to New Times -- and subsequently to other media outlets.

Roberts says the city would pay a buyer of the Crowne Plaza a subsidy -- $10 million is mentioned most often -- as an inducement to a buyer.

Steve Cohn, outside the Crowne Plaza.
Paolo Vescia
Steve Cohn, outside the Crowne Plaza.
Sheryl Sculley, deputy city manager.
Sheryl Sculley, deputy city manager.

Cohn says he considers Roberts' offer to be "bribery." He also says he would not be party to a deal that would include a city subsidy to a buyer.

City Councilman Sal DiCiccio says he views Roberts' overtures as the city "just paying a guy to get out of town. This is wild, wild west stuff."

DiCiccio says he has asked City Manager Frank Fairbanks to find out if Roberts had any assurances from city staff.

Mayoral hopeful Randy Pullen has asked the county attorney to look into the matter as well. A spokesman for the county attorney declined to comment.

City officials initially said they knew nothing about Roberts' efforts. Later, however, deputy city manager Sheryl Sculley admitted that she had spoken to Roberts about the possibility of a city subsidy.

Cohn's audiotape puts the city in an awkward position -- at odds with the developer of its premier downtown development project, Collier Center. Scott Phelps, spokesman for Mayor Skip Rimsza, on Friday called Roberts a liar.

Cohn has been a considerable thorn in the city's side since the Phoenix City Council approved a deal to subsidize construction of a Marriott Hotel at the Collier Center. Cohn says a city-subsidized Marriott hotel would hamper the Crowne Plaza.

Cohn caused an initial city-Opus West deal to unravel when he gathered enough signatures to force the matter to a public vote. The city council responded by rescinding the initial deal.

The city subsequently approved a new deal with Opus West and the Marriott -- an $11 million city investment and an $83 million loan guarantee -- and the council approved it as an "emergency," thereby preventing the matter from being referred to the city voters. Cohn responded by suing the city -- a move that has halted the Marriott project in its tracks -- and launching an initiative that would undo the Marriott deal and require future subsidies exceeding $3 million to be approved by voters.

There's little doubt that Roberts and the city would like to see Cohn withdraw his lawsuits, and new ownership at the Crowne Plaza could accomplish that.

On the tape, Cohn says he doubts that the city would provide such a subsidy, and asks if Sculley had approved it.

Roberts replies: "Well, not only Sheryl. I think we have the council's unanimous support. If we can resolve this thing . . . the Marriott goes forward. We have a new and improved Crowne Plaza hotel renovated for 10 million bucks more? Fuckin' that'd be the easiest goddamned decision they ever made in their life. I guarantee it. . . . I'd bet you any amount, no limit, I can deliver 10 million bucks."

Sculley told New Times on Friday that she doesn't know what Roberts is talking about. She admitted that she once attended a meeting with Roberts and Cohn, but that a city subsidy plan was not discussed.

Upon hearing some of Roberts' quotes, Sculley agreed that Roberts seemed certain he could guarantee a city subsidy. "Yeah, he does [sound confident]," Sculley says. "I don't know anything about it, though."

Later the same day, however, Sculley told the Arizona Republic that she had had a conversation about a city subsidy with Roberts. Her admission came after Roberts had told the Republic that such a conversation had taken place.

Cohn says that the meeting he attended with Roberts and Sculley occurred several weeks prior to the July 22 telephone conversation. Cohn says Sculley told him that the city would never agree to any deals with the Crowne Plaza owners. Cohn says Sculley then left him alone with Roberts, who said a city subsidy could be arranged for the buyer and encouraged him to sell the hotel.

Roberts on Friday initially denied telling Cohn that the city would subsidize the Crowne Plaza purchase. Told that New Times had a tape of him doing just that, repeatedly, Roberts said: "Then use what you have, I guess."

Speaking to the Republic, however, Roberts admitted talking with Sculley about a subsidy plan. The Republic quoted Roberts as saying, "She [Sculley] just said, 'I think it's a good idea,' and if you can broker the deal and come in with a reasonable number, she thinks she could get support."

Neither Roberts nor Sculley returned calls on Tuesday.

Contacted late Friday, Mayor Skip Rimsza says Roberts had "no authorization and was not empowered in any way" to suggest the subsidy scheme. Rimsza, who favors the $94 million subsidy for the Marriott Hotel, says Roberts appears to be "willing to promise anything" to make his project go forward.

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