Rare Earth LLC has filed a lawsuit against the City of Glendale claiming the City violated its procurement rules when it awarded a bid to purchase a City-owned site by the Agua Fria River to a competing firm.
Rare Earth, a Glendale-based mining and gravel company, alleges in a Maricopa County Superior Court complaint filed in November that Glendale set up its solicitation process to favor M.R. Tanner Construction’s bid for the 48-acre property between Glendale Avenue and Bethany Home Road over its submission.
It also claims the terms of the contract between Tanner and Glendale do not follow those laid out in the bid request. Rare Earth is asking the Court to compel Glendale to perform the solicitation again.
Glendale denies favoring Tanner and says both companies were given equal opportunities in the bidding process. The City has asked the Court to dismiss the claim and says it adhered to the local code.
Tanner submitted a separate filing and noted Rare Earth’s offer was $2M, while Tanner’s was $4.75M.
A key question comes down to whether both companies were held to the same rules and standards. Specifically, part of Glendale’s requirements was that the winning company fill in a hole and build berms at the location within a 90-day window.
In its submission, Tanner claimed the timeline was unreasonable. The City later stipulated in its sale and purchase agreement that a 240-day extension was possible.
Rare Earth claims it was not aware an extension was an option and that its bid was low because executing the required work within the 90-day timeline was an expensive undertaking.
Glendale says Rare Earth had the same opportunities as Tanner to express any concerns about terms and timelines.
Rare Earth and its affiliate company ABC Sand and Rock had approached the City in 2019 about entering into a mineral lease, the lawsuit claims. Glendale declined the offer because the site was connected to the City’s groundwater recharge.
The company made another request in 2020 for portions of the site not connected to the aquifer recharge and was again rejected.
Tanner approached the City about buying the property in 2021. Rather than accept Tanner’s unsolicited offer, Glendale says it issued the invitation to bid. The City says Rare Earth’s earlier attempts to buy the property did not entitle it to preferential treatment.
In August 2022, Glendale issued an invitation for bids for City-owned parcels. The solicitation included a requirement to fill in an 850-foot by 400-foot hole, bring it level with Glendale Avenue and build berms around the property.
Glendale opened the bids in September 2022 and announced its intent to award the sale to Tanner two months later. Between January and April of 2023, Rare Earth’s lawyers contacted Glendale several times to ask about the status of the contract with Tanner. The lawsuit says it was seeking information relevant to some mining decisions for land adjacent to the parcel in the bid request.
As of mid-May 2023, the City told Rare Earth it was still negotiating the contract with Tanner. Rare Earth filed a public records request for communications between Glendale and Tanner and claims the information in the eventual response indicates the contract terms are different from the bid. The complaint also cites exchanges between Assistant City Manager Jamsheed Mehta and Tanner staff regarding terms of the extension and bid selection.
Rare Earth claims Tanner submitted its bid while knowing it could not complete the site work within the 90 window and accuses the City of working with Tanner to sell Tanner the property and reject Rare Earth’s bid. The company claims if it had been privy to the same terms and information as Tanner, it would have submitted a higher bid than Tanner’s $4.75M offer.
The City also cites key differences between the companies’ bids. Specifically, Tanner offered a higher price and a construction plan for the improvements that indicated it would need more than 90 days to complete them. Rare Earth, meanwhile, offered a lower price and said it would hire a separate firm to complete the work within the specified time. Glendale says Rare Earth could have taken advantage of its equal opportunity but chose not to.
Judge Timothy J. Ryan heard Glendale’s motion to dismiss the case in February but has not yet ruled. (Source)