Suite Deal

Developer offers city subsidy if Crowne Plaza ownership will sell

Scott Phelps, Rimsza's press secretary, called both Cohn and Roberts "liars" and suggested that Roberts was "freelancing out there to cut a deal."

City Councilman Phil Gordon, who once served as Rimsza's chief of staff, says he was unaware that Sculley had discussed a subsidy for a potential buyer of the Crowne Plaza. However, Gordon says city managers have extensive leeway to enter into "exploratory" discussions with developers. The city council, Gordon says, is usually not informed until formal negotiations begin.

Cohn's tape indicates that when Cohn refuses to agree to pursue the city-subsidy scheme, an increasingly desperate Roberts actually offers to make Cohn a limited partner in the Marriott Hotel, which Cohn is suing to stop.

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

Roberts: "How about . . . what about this, what if we let you be a partner in the hotel with us?"

Cohn: "What hotel?"

Roberts: "The new one."

Cohn: "The Marriott?"

Roberts: "Yeah."

Cohn: "I don't know that it has any value, but it's an interesting concept."

Roberts: "Ya know, some, some, ya know, limited interest in the hotel, ya know, not a general partner or obligation or anything. How about that concept?"

Cohn: "Well, you keep thinking about it. And, ya know . . ."

Roberts: "I mean, is that anything worth discussing?"

Asked why he hadn't made the politically explosive tape public sooner, Cohn said he sat on the tape because he likes Roberts and didn't want to get "personal." Then, on Thursday, a columnist for the Arizona Republic wrote a piece suggesting that Cohn was involved in pornography and swingers' clubs.

"I had been attempting to keep things at a certain ethical level," Cohn says. "And it seemed like that level got breached yesterday. Things got personal and I didn't much like it."

What follows is a transcript of the taped telephone conversation between Tom Roberts and Steve Cohn. Cohn says he recorded the conversation on July 22, 1999.

Tom Roberts: Is this [story about the purported listing of Crowne Plaza in the July 21 Arizona Republic] a mistake or what?

Steve Cohn: You mean, is there a listing on the property, is the property for sale?

TR: I assumed you had it listed and it just went in there inadvertently.

SC: The property -- that's not correct. The property is not listed and hasn't been listed since last year, and as for what it's doing in the magazine, I have no idea.

TR: Any offers yet?

SC: The only offer I got's from you guys.

TR: And what do you think?

SC: Of your offer?

TR: Yeah.

SC: Well, I guess I mostly don't like it that much. But I don't know that I understand how it's logistically even doable. I mean, ya know, the city . . . how, how . . . let's say, hypothetically, I was interested, how could it be put together?

TR: Well, by us putting it under contract and either at a specific price or we just, we work together with whether we hire a broker or we, ya know, use consultants to say that's fine. I mean Host Marriott has interest, to be honest with you, so they said, "Hey we're interested." I mean, they're not saying they'd pay $50 million for it, but they're saying, "Hey, listen, we'd have an interest in it."

SC: Okay, but --

TR: We could come up with a sum. We could work together. Let us form an alliance. Let us, if you guys have any potential buyers you could bring to the table, let's meet with them. We think we could bring the city subsidy. I mean, I think if we had -- if you needed it, the city said there'd be 10 million bucks.

SC: Well, I mean --

TR: If we had Host Marriott standing there, ready to buy your hotel and they said, "I need $20 million in subsidy to make it work," I think the city would do it.

SC: You think the city'd give $20 million --

TR: They could give whatever it takes to make a deal. But certainly I know they'll give $10 [million].

SC: Well, obviously, if I asked them, they would tell me that isn't the case.

TR: If you asked them, they'd tell you to go to hell.

SC: Right.

TR: Which is why I'm suggesting we form an alliance. Let's, let's sit down, let's brain storm on who the logical buyers are. Let's get a meeting with Host. And while we sit in the meeting, say, if you have any other . . . um, mention, someone mentioned that Crowne Plaza . . . someone that does a lot of business with Crowne Plaza may have an interest, uh, Reade, I guess. I got that from the city. I don't really know where they got that information.

SC: Don't really know.

TR: But, I mean, let's sit down and if, I don't know. . . . Does it make sense to bring in a hotel expert to try to market it?

SC: Well, I'm --

TR: You don't want the publicity, I'm sure.

SC: Well, I'm, I'm sort of . . . see, it's the type of thing. . . . First of all, I don't know how we would do such a thing if I wanted to do such a thing. I mean, the city, okay. How do we know that the city is willing to do a $10 million subsidy?

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