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Councilman Scrutinized in PHX Land Deal

Real-estate developers submitted proposals to buy a 7.6 acre lot on Fillmore Street between Fourth and Sixth avenues in downtown Phoenix. Photo credit: Luci Scott/ Arizona Builder’s Exchange

By Dustin Gardiner for The Arizona Republic

Real-estate developer Robert Lyles and his business partners wanted to transform a prime piece of land in downtown Phoenix into a bustling hub of apartments and condos, sidewalk cafes and shops (AZBEX, Feb. 24, May 5, Sept. 11).

Before they submitted the bid to buy the city-owned property, Lyles said they shared their plans with City Councilman Michael Nowakowski to get his feedback as the area’s representative.

Five months later, Lyles said, something strange happened.

When the city recommended in late August who should get to buy the land, Lyles and his team ranked second. The first-place team included the Cesar Chavez Foundation, a non-profit where Nowakowski is a top executive.

Nowakowski is now facing accusations from developers that he didn’t disclose a conflict of interest and stay out of talks about a land purchase, worth $8.5M, that was being eyed by his employer for a project worth more than $100M.

Nowakowski said he did nothing wrong because he didn’t know the Chavez Foundation was bidding on the land until about a month after its proposal was submitted. He is one of the Chavez Foundation’s two executive vice presidents and oversees a network of nine Spanish-language radio stations that the foundation controls.

The councilman also disputes the nature of his conversation with Lyles’ team of developers, Scottsdale-based Deco Communities. Nowakowski said they spoke more generally about the need for a grocery store and housing downtown, though he acknowledged city property on Fillmore Street was discussed at least briefly.

Legal concerns

Under the law, “any public officer or employee of a public agency who has, or whose relative has, a substantial interest in any contract, sale, purchase or service to such public agency shall make known that interest in the official records of such public agency and shall refrain from voting upon or otherwise participating in any manner as an officer or employee in such contract, sale or purchase.”

A council member can “make known” a potential conflict by filing a signed disclosure statement with the city or by verbally declaring a conflict during a public meeting, making the disclosure part of the meeting’s official record on file with the city.

A potential exemption in the law exists if an official’s interest is considered “remote,” which can be a technical judgment about how much a person might benefit from the conflict.

The Chavez Foundation is listed as one of Nowakowski’s potential conflicts on file with the Phoenix City Attorney’s Office, which tracks council members’ affiliations to monitor council meeting agendas for possible conflicts. His office confirmed the list was up to date and accurate in an e-mail last summer.

However, Nowakowski said, he did not disclose a conflict with the Fillmore project “because basically when I found out, that was during the (evaluation panel) interview process, and I haven’t talked to anyone or advocated for the project at all.”

Read more at The Arizona Republic

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