The Waterfront's Back Channels
Scottsdale City Manager Richard Bowers twice met privately with a developer bidding on a project potentially worth hundreds of millions of dollars.
On Tuesday, Bowers joined other Scottsdale Redevelopment Board members who unanimously awarded that developer the right to negotiate to redevelop Scottsdale's Waterfront, a 23-acre area in the heart of the city that city leaders envision as a cultural and retail plaza.
Bowers' private meetings add to a heated, behind-the-scenes conflict between competitors Scottsdale Waterfront South Associates--which won the board's approval--and High Hat LLC, the losing proposer.
The city's redevelopment staff recommended awarding the right to negotiate to Waterfront South Associates in a four-page decision which chose it above High Hat, a group which includes Frank Lloyd Wright's Arizona legacy, the Taliesin architects.
The staffers recommended the Waterfront South Associates' proposal because, they said, it more effectively linked the Waterfront area with downtown Scottsdale, had more profitable land uses and because the group already owns the majority of property in the area.
Michael Walters, one of the owners of High Hat LLC, contested the redevelopment staff's assessment.
"I've had an opportunity to read the staff's report and they terribly mischaracterized our proposal," Walters said. "We really support the Redevelopment Board, but we really believe they were provided an inaccurate picture of our proposal. I mean, I would've made the same decision based on that recommendation, which was inaccurate bordering on corrupt."
High Hat is now considering litigation, Walters said.
"We are reviewing the process and if we find that any inappropriate activity has taken place, we will defend the partnership," he said.
Waterfront South Associates also had several private meetings with Gary Roe, the city's redevelopment administrator. Ken Allen, a member of the Redevelopment Board, was Waterfront South's principal architect and presented its proposal to city staff. Allen removed himself from deliberations and voting on the proposals. Roe did not return calls for comment.
However, Fred Unger of the Waterfront South Associates criticized High Hat and Taliesin for turning the process into a "game."
"It is no secret that High Hat has threatened litigation if they are not selected," Unger told the board just before the vote. "Scottsdale and this board don't need more lawyers or more litigation."
High Hat, meanwhile, had at least one private meeting of its own with Scottsdale's mayor, Sam Campana, which Bowers participated in briefly, according to city staff. High Hat's design team also had one meeting with a redevelopment staffer.
On July 11, Scottsdale requested proposals to turn the area that stretches from 68th Street and Indian School Road to 74th Street into an entertainment and tourist attraction. It would be the city's largest redevelopment effort ever.
Bowers held his first meeting with Roe and Stan Castleton and Unger, partners in Scottsdale Waterfront South Associates, on July 25.
The deadline for bids was August 25. Bowers held a second meeting with Roe, Unger and Castleton three days later, on August 28.
The meetings are marked in Bowers' schedule. The first includes the notation "re: Waterfront."
Bowers said the meetings were question-and-answer sessions meant to provide information to the developers, and did not involve any discussion of the proposal.
"As long as we don't try to predetermine any conclusions, people in redevelopment try to explore a variety of creative options, and we try to open to meet with anybody at any time," Bowers said. "It's just the ongoing dialogue on redevelopment that we keep wide open to anybody who wants to further find out what the city expects or get clarification on a question they have."
Bowers said he also met with other proposers for the same project, but couldn't recall dates or times.
Bowers' schedule doesn't reflect any other meetings on the waterfront project. But a city spokesman said Bowers did "duck his head in" the meeting between Mayor Campana and High Hat.
There's nothing unusual about the meetings, Bowers maintains.
"As city manager, it's almost wearing two hats," Bowers said. "But any member of the board who receives an inquiry is free to give any information or review any materials they receive."
The meetings are the latest development in a bid process that has drawn accusations from all sides.
The only other competitor to address the entire redevelopment area, David Ortega and the Wellington Group, withdrew because "others are attempting to sabotage the process," he wrote.
"Our submission was made in good faith, confident in the integrity and fairness and democratic selection process," Ortega said in a letter to the board. "Frankly, I am saddened and hurt that others with hostile motivations have attacked city staff and me personally."
Ortega refused any further comment, including which other proposer had "hostile motivations."
"The letter speaks for itself," he said.
Unger referred all questions about meetings with city staff to his spokesman, Jason Rose, who attacked High Hat for a lack of preparedness.
"They didn't do their job," Rose said. "And that's why staff didn't recommend them. . . . They tried to slash and burn, they took the lazy way, and staff said that today."
Rose also angrily denied any impropriety in the meetings with city staff.
"It's a joke," he said. "We didn't have enough opportunities to meet with them. . . . I wish we could've met with Dick Bowers 15 times. I wish we could've met with Gary Roe 43 more times. . . . That's how complex this project is."
Scottsdale has minimal guidelines governing contacts with bidders. Scottsdale's procurement code only requires that city staff should not disclose information from competing bids, and that a record is kept of all discussions with bidders.
However, private meetings between bid evaluators and proposers have led to investigations by the Attorney General's Office at both the state and county level. The Attorney General's office is now looking into the Scottsdale matter.
Mayor Sam Campana says meetings between city staff and bidders are just business as usual in Scottsdale. Staffers "absolutely" should be meeting with proposers, Campana said, and the practice will continue in the future.
"We need to understand all of what it is they're offering and what their vision is, and ask questions directly," she said. "I don't think anyone has ever been ill-served by that process. I think that people would be dismayed to learn that the first time that we had seen that was in a public meeting.
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