Longform

YOUR TAX DOLLARS AT WORK

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By 1987, his business, Ecology Companies, was thriving, paying good wages to its employees and fair prices to the independent contractors who hauled the garbage in.

It makes me feel good when I see someone who works for me driving a brand-new vehicle, to see someone who's happy in their work," Gabrielli says. That's what drives me in this business, to help people, to see them do well. I'm a product of other people's waste. Other people's garbage is my treasure-I have to think like that in this business. I have to think that we're doing something to make the world a better place. I really believe that."

Though he is folded behind an executive's desk in a dark-paneled office, his natural milieu is out among the heaps of light cardboard and computer paper that have already begun to occupy his new lot off Grand Avenue. It has been nearly two years since Gabrielli has been able to fire up his prized machine, an eight-ton green-painted paper compactor and baler he calls Crunch, the Magic Dragon." It has taken that long, he says, to find a suitable site on which to relocate, to move his equipment and get it back in working order. Though the state is paying him for his expenses, Gabrielli had to take bids on the moving, then pay the bills himself, submit them to the state and wait to be reimbursed. It has been a tough two years, and the litigation is just starting. There is a very real chance that when the smoke clears Gene Gabrielli will be a ruined man, but he sees no alternative.

In 1973, he located his Ecology Companies on the lot that had been occupied by Olin Mathieson. It prospered, more or less, for the next decade, growing into a more than $3 million-a-year business and allowing Gabrielli an annual income in the six figures.

Records show that in 1983 Gabrielli stopped renting and bought the land for $515,000. He says he planned to stay there, that when he bought the land he had no idea that the Hohokam Expressway was going to crash right through it. He says the parcel was ideally suited for his admittedly dirty business. He needed a lot of space to store the wastepaper and plastic and metal his company recycled, and he needed the railroad spur that charged along the property's southern boundary and rolled up to the back of the big warehouse.

It was in late 1986 that he first heard about the Hohokam. Though Gabrielli denies that he saw the project as a chance to make some quick money, he retained Louie Majors, a Phoenix businessman with a real estate background, to help him with the sale of the property. In a letter dated October 19, 1987, Gabrielli named Majors his agent in the sale of the property to ADOT and stipulated that Majors was to receive 10 percent of the gross selling price-a minimum of $1.2 million to $1.9 million depending on mutually agreed upon terms of relocation costs of equipment and building." Around this time, Gabrielli sent a letter to ADOT that announced his intention to move his resource-recovery business to a less valued property" because of the rapidly increasing land values in the area, a continuous economic development of businesses and the proposed Papago Freeway extension adjacent to the property.

In light of the above, it is no longer feasible for us to continue doing our type business in this area," Gabrielli wrote. But as is often the case in such circumstances, Gabrielli's estimation of what his land was worth was considerably more than what ADOT offered. And it took a lot longer for the state to make an offer on the land than the six to nine months Gabrielli estimated it would take for the sale to be completed. On January 3, 1989, ADOT offered Gabrielli $130,000 to buy a small section of his land-just enough to build the Hohokam Expressway-and suggested that Ecology Companies shift its operations slightly northward to accommodate the construction.

Six days later, Gabrielli responded with a counteroffer. He was unwilling to accept a partial sale-he insisted the state take all or nothing. He would accept $4,087,566 for his property, plus $1 million for the seven old buildings on it.

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Philip Martin