Back when he was running for governor, real estate developer J. Fife Symington III refused to divulge financial details of his business empire, even though he campaigned as the guy with the "business mind" necessary to rescue Arizona from its economic crisis.
His reasoning for not talking about his business deals? "I do development and I do politics. They're two separate things, and I try to keep them that way," Symington told New Times shortly before he was elected. But it's not always that easy. One of his businesses, the Symington Company, stands to collect over half a million dollars of state money in rent for Arizona State University's downtown campus at the Mercado, a faux Mexican village complex in downtown Phoenix.
What really rattles number crunchers at the Joint Legislative Budget Committee (JLBC) is this: In their view, ASU circumvented normal budgetary procedures when it cut a deal with the Symington Company and moved into its cushy downtown quarters. The JLBC did not include Mercado rent in its budget proposal.
The Mercado rent first popped up last summer when Symington was a gubernatorial candidate. It wound up as a special item in the proposed budgets of former Governor Rose Mofford and current Governor Symington. Both governors, while slashing other programs in state university budgets, requested $432,000 to pay rent for ASU's downtown campus at the Mercado. It is the only recommendation for additional funding in Symington's proposed budget for ASU.
Is there a conflict here between the governor's personal business and state business? Absolutely not, says Peter Burns, who directs Symington's budget office. "I don't see the conflict here," says Burns, pointing out that both Mofford and Symington recommended additional funding for rent in several state agencies. "The JLBC when they made their budget recommendations messed up on rent, not only in this agency but in a lot of other agencies. They took a pretty naive view of the world. They said we're not going to increase rent for anybody."
Burns defends the Governor by saying it's no secret that Symington has an interest in the Mercado. "If I were ignoring all of the other agency rent problems, it would be different," Burns says. "But in my view it's a pattern of corrections to what I characterize as a shortsighted recommendation.|.|.I'm not doubling the rent or tripling the rent, and it's not any different from any recommendation we brought forward under Mofford."
None of this seemed to bother the Republican-controlled Arizona House of Representatives, which last week approved Symington's proposed $3.4 billion state budget for next year.
One of the most controversial aspects of Symington's budget is the way in which it slashes funds for the state's universities. The governor, for instance, proposes that ASU get $10 million less next year than it received this year. Yet in a debate with Democrat Terry Goddard last October before Northern Arizona University students, Symington took another view: "We have to not only maintain but increase financial commitments to state universities." He also noted that Arizonans should "look at how we're spending our money before we start asking for money."
The governor's proposed budget cuts worry ASU officials. But except for an announcement that they would no longer help fund the Sundome auditorium in Sun City West, the ASU officials have been quiet about what programs might be cut because they don't want to hurt the "morale" of faculty and students. "I can tell you there will be fewer class sections offered, for sure. This means we may lose some students," says Alan Carroll, ASU's director of fiscal planning and analysis.
At least the governor isn't asking the state to be stingy in paying ASU's Mercado rent.
Carroll says ASU moved into the Mercado last summer from its digs at the old Phoenix Union High School. "They moved because they couldn't get more space at Phoenix Union and they got a good deal at the Mercado," says Carroll.
But not a cheaper deal. According to state records, ASU's space at Phoenix Union cost $136,000 annually, or about $12.40 per square foot.
The new space at the Mercado, which is three times the size of the Phoenix Union space, cost $568,000 annually, or $14.70 per square foot. The difference in cost is $432,000, which Symington and Mofford both requested in their budget proposals for next year.
What annoys some officials at the JLBC is that ASU made the move in the summer before asking the legislature if it could have the additional $432,000. This is not good budget manners for state agencies, one official says. The protocol is to get the state to approve the money first, and then move, he says.
Burns doesn't agree. Some politicos, he says, have the "proclivity to micromanage every little decision that agencies want to do..|.|.As far as I'm concerned, it's within the power and authority for the Board of Regents to approve [the rent], and they came and asked us for support on it."
Carroll also defends ASU's move to the Mercado, pointing out that the university got a great "opportunity that came up outside of the legislative budget cycle"--when the legislature was not in session.
"The downtown center needed more space," he says. "We had the programs to justify that space. The location at the Mercado is better, more convenient, safer. The university would have been crazy not to do it."
But Carroll acknowledges that the university is hurting for money and that the $432,000 appropriation request comes at the expense of other programs crippled by budget cuts.
"They cut current programs by an equal amount and even more in order to offset that $432,000," he says.
The budgetary dogfight is not nearly over. Carroll and others expect the Symington budget will be chewed up this week in the Democratic Senate.
In the end, the ASU-Mercado rent deal leads observers to question why Symington's company did business with the state at the very time he was running for governor.
"The Mercado is a business interest, and the state is a good tenant," says Symington's spokesman, Doug Cole. "There was always the possibility that Symington wasn't going to be elected.
"The real key issue here is the lease had already been signed and it was done when seven people were running for governor."
"I'm not doubling the rent or tripling the rent, and it's not any different from any recommendation we brought forward under Mofford."
"The Mercado is a business interest, and the state is a good tenant. There was the possibility that Symington wasn't going to be elected."
"The location at the Mercado is better, more convenient, safer. The university would have been crazy not to do it."
"They moved because they couldn't get more space at Phoenix Union and they got a good deal at the Mercado," says ASU's Alan Carroll.