On the Waterfront

If Scottsdale Waterfront South Associates wins the right to rebuild 23 prime acres of the city, it's because of the group's qualifications, not its connections, city officials say.

The fact that Ken Allen, the group's principal architect, is on the city board which will award the contract doesn't matter, Allen and other city officials maintain. Nor do the private meetings the city's redevelopment administrator, Gary Roe, and other bid evaluators have been having with the developers.

It's a contract worth millions to the winning developer. And Allen's link between the board and one of the bidders is raising some questions.

Scottsdale's redevelopment staff is reviewing three different proposals to turn the area into a waterfront retail and cultural plaza. The redevelopment site stretches from 68th Street and Indian School Road to 74th Street, and encompasses the Galleria and large swaths of Civic Center Boulevard. A Salt River Project canal runs through it. (Two other proposals deal with smaller projects in the area.)

Three major groups responded to the city's invitation. Scottsdale Waterfront South Associates, which includes developers Fred Unger, Sam Castleton and Excel Realty Trust, hired Ken Allen--a member and former vice chair of Scottsdale's Redevelopment Board--as its principal architect and designer. This group owns and controls most of the property in the redevelopment area, including the Galleria.

Waterfront South Associates' two competitors are High Hat, a group which includes Frank Lloyd Wright's Arizona legacy, the Taliesin West architects; and local architect David Ortega working with the Wellington Group. The city's redevelopment staff is expected to recommend one of the proposals to the board by October 15.

Allen says he will not be voting on his own proposal when it comes before the Redevelopment Board, and the Scottsdale City Attorney's Office says that removes any conflict.

"You cannot then vote on something in which you have an interest," deputy city attorney Freda Bisman says. But that doesn't prevent Allen from sitting on the board at the same time he's working on a proposal for it, she says. Allen checked with the City Attorney's Office before he began working for the Waterfront South group, Bisman says.

Allen didn't get a written opinion from the City Attorney's Office. But Bisman says, "He's very aware of what he should and shouldn't do in this kind of situation."

Allen says he doesn't think his presence on the development team makes a difference. He says what's more important is the financial stability and reliability of developers Unger and Castleton.

Allen suggests that if everyone with a potential conflict removed himself from city business, nothing would ever get done. "Everybody has local connections and local ties," he explains.

Still, Allen is one of the people who oversees Roe, the redevelopment administrator, and the other city staff. Roe, however, says Allen's position never made a difference, even when Allen made his group's presentation before the redevelopment staff.

"He declared a conflict on that before me and the board, back when we first issued the RFPs," Roe says. "Unfortunately, this happens on city boards and commissions. . . . Community leaders tend to be involved in the community," he adds. "We've just excluded him from any discussion with the board."

Roe says he would be concerned if Allen did not remove himself from board action on the Waterfront project. Allen has gone so far as to leave meetings when the project is discussed, Roe says.

But at least one competitor is concerned about Allen's position on the board.

David Ortega says he's not worried about Roe's integrity. But he does wonder if Allen's position on the board meant Allen's group had more time to work up a proposal than competitors. "We reacted to the request for proposal as timely as we could, and of course there could be some time advantage on his part. It could be an advantage in terms of timing, because of the scope of the project," Ortega says.

Ortega says he's confident that Roe and the redevelopment staff will recommend his group's proposal. "We do not intend to lose," he says.

Allen's group has had more access to city staff and other proposal evaluators than Ortega and the other competitors.

Roe has had several meetings with Fred Unger and other representatives of Waterfront South Associates, Roe says, outside of the regular proposal meetings and presentations. Roe didn't remember the exact number of meetings but says he has not met with Allen about the proposal. By way of contrast, High Hat has had two meetings with a city staffer on its proposal--one with Roe and one with a member of his office. Roe says he told a Taliesin architect that Waterfront South Associates had the edge but that no decision had been made. Ortega has had no meetings with city staff.

Frank Jacobson and Robert Knight, the president and vice president of Scottsdale's Cultural Council, will also assist in evaluating the proposals. And they have also held meetings with Waterfront South Associates about the development of the Galleria area, according to a memo from Jacobson to Roe and the council's board of directors.

Roe says the meetings he's been involved in have been held at the request of the developers to answer questions they have. He has not provided inside information, he says. "I have not sat in rooms and strategized with them on the Waterfront," he says. "I think they've been on their own to come up with their concepts on that."

Roe describes Waterfront South's Unger as "sort of a pest" with constant questions about the redevelopment project. But, he says, it's part of his job to provide answers to the proposers.

"That's not unusual, we've had people on many RFPs contact us. . . . They're just trying to do their homework," he explains. "And our philosophy has been we provide information to people if they ask for it."

But for other public agencies, meeting with potential bidders is recognized as a conflict. Private meetings with a bidder scuttled Maricopa County's attempt to buy a new phone system last year, when it came out that AT&T met with the county's procurement officer.

The Scottsdale City Attorney's Office says that the redevelopment staff's meetings don't violate any procurement guidelines because city staffers are supposed to answer questions. Roe says if the private meetings are a concern, he might consider not having them in the future.

But Gary Tredway, a Scottsdale resident and frequent critic of city-sponsored giveaways in redevelopment deals, says the way the city is handling the Waterfront project is business as usual. The entire process is basically flawed--no matter who's voting, he believes.

"The Redevelopment Board is totally a business group," Tredway says. "The city is not interested in controlling growth because the people who make the decisions profit from it.

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Chris Farnsworth