By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
With Mayor Neil Giuliano facing an unprecedented recall election on Tuesday, September 11, city officials are taking extraordinary measures to keep the public in the dark about Tempe's chaotic and costly negotiations with the Tourism and Sports Authority and the Arizona Cardinals to build a new stadium.
After repeated requests from New Times and its attorney, hundreds, if not thousands, of pages of documents are being withheld -- many that cut to the root of the city's financial deal with the Cardinals and the TSA. In response to the requests, the city has opened some records for review, but even those indicate there is far more important information the public should be allowed to see.
Instead, the city has placed a virtual blackout on detailed information on a complicated and constantly changing $25 million deal to provide land for the stadium.
City Attorney Brad Woodford has refused to release records, claiming the documents are related to ongoing negotiations with the Cardinals and TSA over the stadium. These records -- none of which can be withheld under attorney-client privilege exemptions to the state public records law -- include:
Analysis of the economic impact of the stadium.
Numerous letters between city staff and TSA officials.
Reports by city officials to city council members concerning the stadium.
Documents related to Tempe's negotiating strategy to secure the site.
Soil investigation reports.
Scores of e-mails and correspondence between staff members and between staff and outside parties concerning the stadium.
Documents related to the proposed site relocation of the stadium 1,600 feet east.
Records related to increased costs stemming from the relocation. The city is responsible for paying for engineering, soil, environmental and archeological studies -- all of which now need to be conducted at the new site.
As New Times continues to push officials to release the documents, the stonewalling comes at a crucial time, not only politically for the embattled Giuliano, but also for the stadium deal, which has been paralyzed by the Federal Aviation Administration's safety concerns. The FAA issued a preliminary report in July saying the site for the stadium at the southeast corner of Priest Drive and Washington Street was an aviation hazard.
The report forced TSA to halt work on the stadium. Excavation was set to begin in July and a formal groundbreaking was scheduled for September 7.
The FAA was expected to release its findings on the suitability of the new location on September 11 -- the same day as the recall election that pits Giuliano against political neophyte Gene Ganssle -- an actor-turned-candidate who is backed by a rabid right-wing column angered over the city's prolific spending on trophy projects such as the Town Lake and a planned light-rail system. The FAA decision, however, has been delayed to allow the agency to solicit public comment about the site.
If the FAA gives the green light, stadium officials say a flurry of agreements needed to begin stadium construction will be quickly signed. These include definitive agreements between Tempe and the Cardinals and Tempe and the TSA. Both of these agreements involve significant financial outlays by the city. The details of these agreements have not been publicly released and it is extremely unlikely that there will be public hearings before the city signs the documents.
Giuliano said the city does not plan to hold hearings on the agreements, saying there already has been "ample opportunity for public review."
The city's agreements with the Cardinals and the TSA will be crucial, especially since it is clear no one really knows yet if the facility will live up to its "multipurpose" designation or if it will simply be a football palace that will double the value of the Arizona Cardinals to $600 million or more on the day it opens.
"What is the facility?" Giuliano asked rhetorically during an interview last month. "How multipurpose is it going to be?"
Such questions should have been answered months ago.
Voters were told before last November's election that the stadium was designed first and foremost as a multipurpose facility. TSA officials confirm that many of the features necessary for a true multipurpose facility were not included in the original design that Hunt Construction Company pledged to build for $331 million. In the last few months, the TSA has been trying to add more multipurpose features to the stadium and officials say it will add millions to its overall cost.
Tempe's closed door is similar to another high-profile deal championed by Giuliano that imploded -- the Peabody Hotel on the Town Lake.
Under Giuliano's direction, the Tempe city government hid from the public negative financial reports analyzing the cost of building Town Lake and the crucial role the Peabody Hotel would play in recovering at least part of the city's investment.
Giuliano sold the Rio Salado Project to the public on the premise that the bulk of its cost would be repaid by developers and that no new taxes would be implemented to pay for the lake. He lowballed the cost at $45 million by excluding more than $40 million in additional city investment needed to build roads, underground power lines, parks and a marina.
The Giuliano-led city council pledged to voters that construction on the lake would not begin until there was sufficient private investment along the shoreline to underwrite the cost of building, operating and maintaining the lake. The private investment "trigger" was included in the city's 1995 Rio Salado Financing Plan.
The city signed a tentative development agreement in 1996 with the Peabody Hotel for construction of a 1,000-room luxury hotel on the southeastern shore of the then-unbuilt Town Lake. The city provided the Peabody more than $50 million in incentives to build the hotel -- in exchange for the Peabody providing funds to help defray the cost of building and operating the lake.
But by 1997, it became clear that the Peabody Hotel was having trouble lining up the financing to build the massive hotel because the project just wouldn't pencil out. Arizona didn't need another 1,000 hotel rooms, and the hotel needed a golf course to attract customers, which wasn't going to happen.
In addition, other unexpected expenses were adding to the cost of the lake. In February 1997, deputy city manager Pat Flynn gave the city council a sobering report.
Flynn's report -- which was presented to the council during a secret "executive session" and remained confidential until it surfaced last month in a federal law suit between Tempe and Peabody -- provided a bleak financial assessment of the Rio Salado project, of which Town Lake was the centerpiece.
"If the city looked at the Rio Salado project like an investor would look at a similar development project, we would not recommend doing this project because cost outlays far exceed income in the Rio Salado area for the foreseeable future," Flynn's February 13, 1997, report states.
Flynn concludes with a stark warning:
"We are well beyond the city's capacity envisioned in the current finance plan. I believe if we don't establish a certain ceiling we will seriously jeopardize the city's financial condition and, equally important, place an excessive burden on other city programs, thus impacting basic services."
Flynn's warnings were ignored.
Giuliano and the city council dropped their pledge to secure private investment prior to building the lake, and proceeded with construction. The Peabody Hotel never got built and now the city and Peabody are battling in federal court.
The upshot? Tempe taxpayers are financing the full cost of construction of Rio Salado improvements, as well as more than $3 million a year to maintain and operate the lake -- a lake that is useless for swimming, where fishing is banned and boating is limited.
With a such a history of hiding financial details from the public, it's little wonder that Giuliano and Tempe have erected a moat around city records that would shed light on the gritty details of the city's pending deal with the TSA and the Cardinals.