Snafu 2000

The contracts were in the mail.

And that was bad news for Phoenix officials and volunteers struggling to organize a massive downtown turn-of-the-century celebration that hopes to attract more than 100,000 revelers into the city's resurgent central core for an evening of partying, dancing, music and awe beneath an unprecedented fireworks display.

The dispatching of entertainment contracts worth more than $620,000 immediately threw Celebration 2000 organizers into their own version of a Y2K fiasco.

In an effort to sidestep ponderous rules of governance and public spending, the City of Phoenix -- cited early this decade as "The Best Run City in the World" -- adopted an arm's-length attitude and funneled public funds through a nonprofit corporation composed of volunteers.

What resulted was a management nightmare -- questionable procurement practices, sweetheart deals and conflicts of interest.

Scottsdale promoter Charles Johnston mailed the contracts to the entertainers in late August after receiving tentative approval by Citizens for Community Celebrations, the nonprofit corporation appointed by Phoenix Mayor Skip Rimsza and chaired by former attorney general Grant Woods.

Johnston, a longtime Valley promoter who handles acts for the Bank One Ballpark (which will be conspicuously dark on New Year's Eve), dropped the contracts in the mail before flying to North Carolina on business, believing he was assured success after months of volunteer work.

He was wrong.

On September 1, Woods and top city officials decided -- belatedly -- that it was time to review the city-financed budget of Citizens for Community Celebrations (CCC). The last-minute budget summit -- conducted after the contracts had been signed by Woods -- concluded that spending was out of control in the face of an embarrassing dearth of corporate sponsorships.

"The city folks and I took a look at the budget and thought it was too much for a first-time event," Woods says in a series of written responses to questions from New Times.

Volunteers had hoped to finance the bash by collecting $2 million from corporate leaders, but by late August, less than $100,000 had been promised.

There was no choice but to deeply slash the Celebration 2000 budget -- from $2.7 million to $1.3 million. The entire event needed to be restructured only four months before the show.

The first action: Unilaterally cancel about half of the contracts that Johnston had negotiated, Woods had signed, and artists had accepted.

Johnston, whose 32-year career as a promoter was built on delivering what he promised, was never consulted about the budget crisis.

Johnston resigned from the committee in a September 3 letter to Rimsza, writing to the mayor, "I got blind sided with an 11th-hour panic -- change -- or who knows what. . . . I now find myself in a terribly embarrassing and humiliating position with a number of my peers."

The mayor never replied to Johnston, delegating that unpleasant task to a deputy city manager.

The contract cancellations triggered a series of nasty letters, lawsuit threats and bitter finger-pointing at a critical time. Fund raising -- already hampered by a muddled vision for the event -- was further handicapped by threats of litigation from agents for the acts that had been contracted to perform.

The fund-raising goal was drastically rolled back to $600,000. Even that has proved to be unrealistic. So far, no money has been collected, although several corporations have pledged a total of about $150,000.

"By the time we got to most of them [corporations], the contributions had dried up," says Bill Shover, retired public relations director from the Arizona Republic and CCC vice chairman.

Despite the lack of donations, the CCC was spending at a prolific rate. The Phoenix City Council had given Celebration 2000 volunteers a $500,000 loan in addition to a $25,000 grant as initial funding.

In a scramble to secure artists and production equipment, Celebration 2000 volunteers executed a controversial $170,000 no-bid contract for staging and lighting equipment and cut a deal giving Jerry Colangelo's Team Shops the exclusive Celebration 2000 merchandise contract.

The stage and lighting deal with On Cue Systems has been criticized as being two to three times more expensive than necessary. Officials say, however, it was important to quickly secure the stages -- at any price -- in order to book acts.

Celebration 2000 organizers gave Johnston the go-ahead to line up artists, and he did. In late June, he secured a $115,000 deal for a reunion of the Tempe band the Gin Blossoms. Johnston also made arrangements with a host of mainstream bands ranging from '60s stars Steppenwolf ($65,000) and Three Dog Night ($70,000), to country stalwart Waylon Jennings ($75,000), to the '40s big band sounds of the Harry James Orchestra ($100,000), and the Rock N Roll Army, composed of acts from the '50s ($70,000).