Power of the people: referendum pursuit halts Scottsdale Desert EDGE proposal

Scottsdale residents gather in City Hall to hear the latest update on the Desert EDGE project during a Nov. 6 Study Session of Scottsdale City Council. (Independent Newsmedia/Josh Martinez)

Scottsdale City Council has stumbled to the realization the outcome of a citizen petition filed by Mark Stuart in December 2016 has the opportunity to shape any and all future discussions regarding the construction of a desert-appreciation venue at the Gateway to the McDowell Sonoran Preserve.

Scottsdale City Council Monday, Nov. 6, amongst a bevy of other considerations, has instructed city staff to “provide time for the citizen initiative petition process to be completed before moving froward” with any and all formal actions regarding the construction of the what was first coined “the Desert Discovery Center,” but now envisaged as “the Desert EDGE.”

Proponents of the Desert EDGE say the Preserve itself is not enough for visitors to appreciate the McDowell Sonoran Preserve while detractors say the proposed facility is nothing more than a pet project for a handful of the community’s elite.

Scottsdale Vice Mayor Virginia Korte and Councilman David Smith listen to Public Works Director Dan Worth as he provides an update to the Desert EDGE project. (Independent Newsmedia/ Josh Martinez)

The Scottsdale McDowell Sonoran Preserve encompasses 30,000 acres of land within the rough boundaries of the Pima Road alignment to the west, McDowell Mountain Regional Park to the east, Stagecoach Road to the north and Via Linda Road alignment to the south.

Desert Discovery Center Scottsdale unveiled its plan for a proposed desert-appreciation venue July 31. Located on less than six acres just south of the established Gateway trailhead, the center includes a series of structures coined “pavilions” and might cost somewhere between $61.2 and $68.2 million to build.

The Desert Discovery Center Scottsdale has also announced a formal partnership with the Global Drylands Institute at Arizona State University, but while ASU has committed to providing staff and setting up its Drylands Institute in Scottsdale — which would include scientific apparatus, proponents say — no funding will be provided by the university.

Mark Stuart, who has filed numerous legal claims against the city over the last few years, filed with the Scottsdale City Clerk’s Office Dec. 16, 2016, a referendum petition seeking to prohibit any and all construction in the McDowell Sonoran Preserve without a majority vote of Scottsdale citizens.

Since that time, Mr. Stuart has been collecting the 23,908 signatures that are required to force his ballot initiative on the November 2018 general election ballot. According to Carolyn Jagger, Scottsdale city clerk, Mr. Stuart has until July 5, 2018 to turn in those signatures.

Mr. Stuart, this past August, was awarded $75,496.81 for his efforts in alerting the Internal Revenue Service, he says, for the usage of tax-exempt bonds for a private enterprise in Scottsdale.

City officials dispute that claim saying the 2016 settlement was due to the legal question of whether the lease for a city-owned parking garage was classified as an operating expense or a capital expense.

In September 2016, Scottsdale agreed to pay the IRS $750,000 to settle the dispute regarding interest on a portion of Scottsdale’s bonds specific to a lease term for a public parking garage.

In 2013 the IRS issued a notice to the city and municipal property corp. that the allocation of a portion of the proceeds of the bonds to refinance the initial lease term of the existing municipal Scottsdale Fashion Square  Partnership Parking Garage Lease Agreement causes interest on the bonds to be taxable.

Scottsdale residents look on as the hours-long study session discussion on the Desert EDGE proposal unfolds. (Independent Newsmedia/Josh Martinez)

A new wrinkle

Jason Alexander, the public face of the NoDDC anonymous citizen group, has filed an IRS complaint alleging the nonprofit group charged with bringing the Desert EDGE project forward — Desert Discovery Center Scottsdale — “has been and continues to be engaged in substantial lobbying activities regarding the construction of the Desert Discovery Center, even though its filings with the IRS deny any lobbying activity.”

Mr. Alexander contends alleged activity by proponents of the Desert EDGE project have violated nonprofit guidelines established by the IRS.

The NoDDC complaint contains 30 separate exhibits alerting the IRS to alleged violations of the group’s nonprofit status and was filed Monday, Nov. 6, according to Mr. Alexander.

In the complaint, NoDDC names what appears to be the communications team tapped with gaining Scottsdale City Council approval along with DDCS officials and board members.
In the complaint, NoDDC alleges communications between city staff and elected leaders went beyond information dissemination and should be considered political lobbying.

Councilmembers David Smith and Guy Phillips listen to an update on the Desert EDGE project from City Treasurer Jeff Nichols during a Nov. 6 study session. (Independent Newsmedia/Josh Martinez)

“From the beginning, DDC recognized that ‘We need the city council’s approval’ to build the center because it will be ‘a city building; on city land; built, with bed tax approved by the city council.’ Thus, DDC’s ‘Number 1 Goal’ was to gain the city council’s approval. This strategy necessarily required the ‘support’ of the ‘city manager, city attorney, mayor, and 3 council’ members. (They) followed this approach by lobbying these officials,” Mr. Alexander said in his formal IRS complaint.

“The second part of DDC’s strategy was a grassroots lobbying campaign to develop ‘community support.’ The goal of this campaign was to develop ‘more advocates to influence council’ through ‘blogs, web, Facebook, social media, newspaper, My Turns, etc.’ The DDC’s admission that they were seeking ‘advocates’ to influence the council is a textbook case of grassroots lobbying.”

Through his complaint, Mr. Alexander outlines the various interactions between DDCS board members, employees and public relations volunteers as examples of political lobbying, which he contends should disqualify the group from its nonprofit status.

Mr. Alexander contends the lobbying efforts are clear cut.

“DDC’s initial actions were directed at lobbying the Council to issue the RFQ and to fashion the RFQ in a manner (that) would be favorable to a bid by DDC,” he said.

“Exhibits 6, 7, 8, 9, 15, DDC even pressured city employees when the RFQ did not proceed to its liking. While DDC has made many public appearances before the city council to lobby for the center, its efforts have also included numerous private meetings with city officials to gather support for the center.”

A long and convoluted journey

Scottsdale City Council first approved the idea to construct an interpretive desert-appreciation venue at the Gateway to the Upper Sonoran Desert in January 2016. The measure was approved with three caveats and included a budget transfer of $1.69 million to create the initial proposal.

That measure passed 6 to 1 with only Councilwoman Kathy Littlefield voting against the measure. Ms. Littlefield felt any changes to the McDowell Sonoran Preserve zoning restrictions ought to be voted on by the general public.

That resolution, among other things, enabled a dedicated municipal funding source for the creation and operation of a desert-appreciation venue.

In addition, the resolution required the proposed operator of the facility — Desert Discovery Center Scottsdale — to raise 10 percent of the capital cost of the venue.

On June 7, Scottsdale City Council approved a $521,090 contract with Scottsdale-based architectural firm, Swaback Partners. The contract allows Swaback to provide programming and schematic design services for the planned facility.

Swaback Partners is the same architectural firm Scottsdale City Council awarded a design services contract for $432,000 in January 2010 for the first iteration of what the desert-appreciation venue would be.

Beyond the hiring of the architectural firm, the DDCS has tapped New York City-based Thinc Design to create exhibitions at a rate of $278,840, plus $30,000 in expenses, according to Sam Campana, DDCS executive director.

Here is the proposed site plan for the proposed Desert EDGE development within the McDowell Sonoran Preserve. (Submitted graphic)

Contingency plan

Following a three-hour long discussion Scottsdale City Council developed a series of contingency plans in case Mr. Stuart’s citizen petition, which he filed on behalf of the Save Our Preserve citizen group, does not deliver enough signatures next July.

Those provisions are:

  • An exploration of alternation locations for the project that would be not be in the Preserve, including Taliesin West, a location near Pima and Dynamite roads or Thompson Peak along Bell Road, downtown Scottsdale or other city-owned properties;
  • A consideration of ballot language that would allow voters to consider whether to amend the Charter to add language such as, “construction of a building or buildings of not more than 50,000 square feet on not more than six acres and located XXXXX is permitted;”
  • An exploration of all funding options including use of Preserve tax funds and tourism development bed tax funds;
  • A pursuit of clarifying language between Desert Discovery Center Scottsdale Inc. and Arizona State University regarding the Drylands Institute creation.
  • The creation of a comprehensive review of capital, operation, maintenance costs and economic impact; and
  • To keep the project moving forward the development of an RFP and job description for a manager at-risk contract.

Northeast Valley Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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