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PHX Cancels Controversial Land Sale

AZBEX file photo

By Dustin Gardner for The Arizona Republic

Phoenix City Manager Ed Zuercher on Nov. 4 canceled the sale of a prime piece of city-owned land downtown after a developer accused Councilman Michael Nowakowski of not disclosing a conflict related to the deal.

In a late-afternoon memo to city leaders, Zuercher cited an investigation by a private law firm that determined the bid process was fair and found no evidence that Nowakowski had violated conflict-of-interest laws. Zuercher said, however, that it’s in the city’s best interest to make sure the public trusts the city’s bidding process.

“Negative perceptions and the resulting impacts are larger and longer-lasting than the benefits of continuing to move the current procurement process forward,” Zuercher wrote. “This project is too important to the city to have any cloud over it.”

What led to canceling the sale?

Zuercher put the sale on hold in early October and hired a law firm to investigate after The Arizona Republic published an article about the developer’s claim.

Robert Lyles, a partner at Deco Communities, said his team met with Nowakowski about the project in April but the councilman didn’t disclose that the non-profit Cesar Chavez Foundation, where Nowakowski is a top executive, was also looking into bidding on it.

The Chavez Foundation and its partner, Trammell Crow Co., had been named the city’s recommended bidder to buy and redevelop the land after an evaluation panel scored their proposal to build a $112M mixed-used project on the land the highest. Zuercher said the land, worth $8.5M, will be rebid as soon as possible.

Jim Mahoney, a senior managing director with Trammell Crow in Arizona, said he was unsure if they would bid again and declined to comment about whether they’re considering filing a lawsuit.

Alfredo Izmajtovich, an executive vice president of the Cesar Chavez Foundation, released a statement Wednesday night, saying, “We are shocked and dismayed by the city manager’s decision to rebid the Fillmore project, especially since a city-commissioned, independent review proved the process was fair and we acted properly.”

Nowakowski could not be reached for comment Wednesday night. The councilman has said he didn’t know the Chavez Foundation would be bidding on the land at the time he met with Deco. He is one of the foundation’s executive vice presidents and oversees its network of Spanish-language radio stations.

Read more at The Arizona Republic

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