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The Arizona Public Service Company's sale of a one-acre paved parking lot to Maricopa County Supervisor Mary Rose Wilcox and her husband smells like trout left rotting in the Phoenix summer sun.
APS sold the land to the supervisor and her husband, Earl Wilcox, at a price several hundred thousand dollars below fair market value, according to my examinations of public records and interviews with real estate investors familiar with the transaction.
The property is across Grant Street from the couple's successful Mexican food restaurant, El Portal, in downtown Phoenix.
The terms of the real estate deal bring a couple of words to mind: Unbelievable! Outrageous!
Regarding the land sale, a well-connected former county law enforcement officer told me, "At the very minimum, [there's] a legitimate issue that should be looked into. It clearly looks bad."
When Mary Rose Wilcox finally called me back minutes before my deadline, she said the land purchase was simply part of her family's effort to improve a downtrodden part of town and that she received no special treatment from APS.
But the facts surrounding this deal lead me to think otherwise.
Mary Rose Wilcox is serving her fourth four-year term as a supervisor. Before that, she served on the Phoenix City Council for nine years. Earl Wilcox is a former state legislator. The couple long has played a powerful role in local Latino politics and in the Democratic party.
In her role as a supervisor, Mary Rose Wilcox has repeatedly voted on matters directly affecting APS, including high-profile issues such as where high-voltage power lines will be located and approval of a lucrative plan by an APS subsidiary, Northwind, to provide air conditioning to county buildings in downtown Phoenix.
Mary Rose Wilcox has never officially disclosed that, as a public official, she engaged in a major financial transaction with APS, a deal that could reap her family a large windfall.
Members of the Board of Supervisors are required to file written disclosures detailing important business deals and potential conflicts of interest with the Maricopa County Clerk's Office.
The Wilcoxes didn't buy the parcel personally. Instead, they acquired it through Grant Park Enterprises LLC, a company they formed in September 2000.
They are planning to build a mixed-use residential, commercial and retail project on the site. They have brought in a third partner to help with the development phase of the project -- a close associate of notorious land-fraud kingpin Charles Keating.
APS spokesman Mark Fallon says the Wilcoxes opened escrow on the 45,000-square-foot property on February 25, 2003. The sales price, Fallon says, was based on a November 2002 appraisal that APS obtained from a private company, Burke-Hansen LLC.
The sale, however, didn't close until September 11, 2003, when Grant Park Enterprises signed a contract to purchase the lot for $152,750, with only a $2,750 down payment, according to a property affidavit filed with the Maricopa County Recorder's Office. The Wilcoxes obtained a $150,000, federally subsidized Small Business Administration loan through the Arizona Business Bank to secure the property.
Fallon insists that the "final selling price represented [Burke-Hansen's] appraised value or better."
But public records and real estate investors cast serious doubt on the accuracy of that appraisal.
As anyone who owns property in the county knows, the County Assessor's Office mails notices of valuation for land and improvements every February. The assessor places a "full cash value" on the property and any structures, which is then used to compute property taxes for the next year. The county's full cash value of property typically understates the true market price of the property by a range of 10 percent to more than 30 percent.
No one in his or her right mind would sell property at the assessor's "full cash value," since market prices are far higher. So why did APS sell its property to a member of the Board of Supervisors for nearly $80,000 less than the county assessor's full cash value for the land?
I can't answer that question. All I can do is show you how the deal went down.
The property purchased by the Wilcoxes made up 75 percent of a paved parking lot parcel whose full cash value was set at $306,000 for the 2004 tax year by the County Assessor's Office. Since the entire parcel was the paved parking lot, this means that the property purchased by the Wilcoxes had a full cash value of $229,500 (75 percent of $306,000) -- nearly $80,000 more than the actual sales price of $152,750.
APS knew, or should have known, the county's full cash value of the property long before it closed the deal with the Wilcoxes. The assessor's office mailed the notice of valuation for the 2004 tax year to APS in late winter 2003 -- months before APS closed the sweetheart deal with the Wilcoxes in September 2003.
If for some reason APS was not aware of the county's 2004 full cash value of the parking lot property before entering into escrow with the Wilcoxes in February 2003, all the company had to do was look at the county's 2003 full cash value figure to see that it was selling the land far below market.
Using the same methodology as above, I quickly computed that the full cash value of the Wilcox parcel for tax year 2003 was $198,750 -- $46,000 more than the actual sales price.