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Glendale City Council nears policy allowing secret land sale discussions

Posted 10/22/19

City Council’s discussion on creating a policy around the potential sale of city-owned properties last month centered around whether Council be allowed to discuss potential land sales in secret …

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Glendale City Council nears policy allowing secret land sale discussions

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City Council’s discussion on creating a policy around the potential sale of city-owned properties last month centered around whether Council be allowed to discuss potential land sales in secret meetings or if it should be required to disclose land negotiations to the public.

No policy was decided upon, but the consensus on Council was that discussions of potential land sales in closed-door Council meetings, called executive sessions, be allowed and that Council not be required to notify the public of negotiations of a land sale. However, council members can decide whether to notify the public that they’re considering the sale of a property on a case-by-case basis.

“This Council needs to take each case individually and determine the best thing for the public. And sometimes that involves notifying the public, and sometimes it doesn’t,” said Sahuaro Councilman Ray Malnar.

Glendale’s policy does require the city to post a public notice of a land sale both at City Hall and in a local newpaper at least two weeks before the sale is finalized.

City staff is drafting a resolution to bring back to Council soon in a workshop for editing before it is voted into law in a voting meeting. Once approved the law could only be changed by a future Council vote.

The city’s only existing guidelines around the sale of city-owned properties is an administrative policy created by the city manager’s office in February.

The only dissenter to the Council consensus during the discussion was Barrel District Councilman Bart Turner, who argued any consideration of a sale of city-owned property should be first announced in a public meeting. Others on Council and staff argued a requirement to disclose when the city is considering the sale of a property could hurt the city’s negotiating power or harm the city’s relationship with corporate or community partners.

“I just think there’s so many scenarios with property,” City Manager Kevin Phelps said. “Property is different in that the person next door, the person across the street all could be impacted by what the city chooses to do or not to do.”

Mr. Turner argued the state’s open-meeting law only permitted city councils to negotiate land deals in executive sessions but said that a discussion of a whether the city should consider selling a property or not should be done in view of the public.

The section of state law states that executive sessions may be held, among other reasons, for “discussions or consultations with designated representatives of the public body in order to consider its position and instruct its representatives regarding negotiations for the purchase, sale or lease of real property.”

City Attorney Michael Bailey and other council members argued the term “negotiations” is too vague and they were arguing semantics.

“If I said to you, Vice Mayor, ‘I’m interested. What will it take?’” Are we negotiating?” Mr. Bailey asked of Vice Mayor Joyce Clark.

“Yes,” Ms. Clark replied.

“You may say yes, others may say no,” Mr. Bailey said.

Mr. Turner still argued it was something the city could  find itself in violation of in the future with this policy and recommended staff look at case law on the subject or ask the state attorney general’s office to give an opinion about the meaning of “negotiations” before the drafted resolution is brought back to Council.

“I think that it’s something that needs to get clarified before we find out that we were on the wrong side of the line,” Mr. Turner said.

Cholla District Councilwoman Lauren Tolmachoff, who is a Realtor, argued the city would lose its negotiating power if it negotiated in public.

“We have a responsibility to act in the best interest of the citizens that we represent,” she said. “And if we were to sit here and say, ‘Well, we want to sell Thunderbird Lounge (a city-owned building on a 0.3-acre property near 58th and Glendale avenues), and this is our bottom line and these are our parameters for a sale,’ we’ve kind of boxed ourselves in publicly. That’s not how you do business in real estate. And I think the executive session allows for us to act in the best interest of the public by not taking your poker hand and laying it all out for everyone to see.”

Mr. Turner said the specifics such as dollar amounts are privileged information and should be negotiated in an executive session, but the city should announce publicly if its considering selling a property.

“If we’re deciding that it is something we would consider selling, our public has the right to know that,” he said.

Mr. Phelps recommended the Council not tie its own hands and maintain flexibility for scenarios in which disclosing the city is considering selling one of its properties could harm its relationship with a corporate or community partner.

He gave a hypothetical example of a Major League Soccer team playing in a city-owned stadium.

“Maybe the Council has an interest, or maybe an outside party has an interest, acquiring that facility,” Mr. Phelps said. “To do that in a public meeting without reaching out to a key lease-hold partner first could have devastating impact and could fracture a relationship that would be really hard to repair. I don’t think the citizens would want you to do that.”

Mr. Phelps’ hypothetical was not a far cry from reality as the city owns multiple sports facilities with professional sports teams as their main tenants — the Coyotes at Gila River Arena and the Los Angeles Dodgers and Chicago White Sox at Camelback Ranch.

City staffed talked about three different origins of potential land sale — Council-initiated, staff-initiated or unsolicited, where a potential buyer approaches the city about a property.

During the discussion, Ms. Tolmachoff recommended only unsolicited not be required to have public disclosure. Ms. Clark agreed in part but thought only Council-initiated should have required disclosure.

Mr. Phelps returned to the soccer analogy, evoking a hypothetical where the city manager or one member of Council wants to explore selling the soccer stadium.

“Without even know whether the council has an interest in doing that, to first start off in a public process saying, ‘Yeah, we want to get rid of the stadium,’ might be very disruptive to the tenant or tenants or partners that are part of that stadium,” Mr. Phelps said.

Mr. Turner said the city has an obligation to announce that the city is entertaining an offer for the hypothetical soccer stadium, or for any other city-owned property.

“I think to not do so would be a disservice to our community,” he said.

Mr. Phelps also brought up that some developers potentially looking at city-owned land might want to enter into a nondisclosure agreement with the city. Ocotillo District Councilman Jamie Aldama asked if under a nondisclosure agreement the city could announce that the city entertaining an offer for a specific property but not disclose who the buyer is. Mr. Bailey, the city attorney, said it would depend on the scope of the agreement.

Mr. Phelps acknowledged that the existing policy implies the city manager is only required to notify Council of an unsolicited offer on city-owned land if he or she deems it a serious offer. He said staff would change that in the drafted resolution to require the city manager to tell City Council of any offers and let them decide what to do with the offer.

“What we tried to do is make the policy prescriptive for the city manager and flexible for the City Council,” Mr. Phelps said.

Mark Carlisle can be reached at mcarlisle@newszap.com or found on Twitter @mwcarlisle.