Alexander: The Scottsdale Desert EDGE proposal is a huge handout to ASU

The Desert EDGE is a massive handout from the taxpayers of Scottsdale to ASU.

Jason Alexander

In the current plan before Scottsdale City Council, ASU will get a facility worth $7,200,000, according to Scottsdale Public Works Director Dan Worth at 33 minutes into the Nov. 6, city council work study. ASU will also get use of this facility completely free of lease or operating expenses.

The EDGE business plan says on p VIII-15:

“Note that this analysis does not include any initial or ongoing payments by GDI (Global Drylands Institute) for use of its building and the overall site, nor payments for any operational services that may be provided by DDC.”

ASU’s free ride was confirmed by City Treasurer Jeff Nichols, at 52:40 of the Nov. 6 work study.

“There are no estimated payments I can tell you in the earned revenue from GDI. There is nothing assumed, there are no lease fees for the space that they’ll be occupying. Mr. Worth just touched on that they will not be contributing to the construction costs … There’s no revenue or cost sharing coming from GDI for that.”

ASU is not even under any contractual agreement with the EDGE. They have no risk with the EDGE, other than filling the building with furniture and microscopes. ASU has no staffing requirements, no obligations to staff the facility on weekends, and no enforceable agreements to the community.

ASU can pull out of the EDGE at any time, leaving the citizens of Scottsdale holding the bill and with a huge abandoned laboratory in the Preserve. If ASU chose to move the Global Drylands Institute from the EDGE to their new $300 million football facility, there is absolutely nothing the city of Scottsdale can do to stop them.

Tax Write-offs

The financial windfall to ASU goes beyond free facilities and expense. ASU’s funding for its researchers and labs will be declared as in-kind donations to the EDGE. ASU will claim all of this as a contribution to a tax-exempt organization. Inside their free building with free rent, ASU will account for its operating costs as a giant tax write-off.

Here again is City Treasurer Nichols from 1:01 to 1:03 in the workstudy:

“It would be contributed revenue, and they would give us the figures they feel that contribution is worth.”

There’s a financial incentive here for the EDGE too! Sam Campana will categorize all the ASU donations as income for the EDGE. Not cash, but as “contributed revenue.” So when the EDGE loses $5,000,000 in cash, Campana will be able to claim the loss as much less thanks to the in-kind contribution from ASU.

The people of Scottsdale will not get an honest picture of how much the EDGE will cost them in actual cash.

ASU profit, but not sharing

There’s one more huge present for ASU in this hustle. Most grants to fund college programs include two cost structures: 1) direct costs for personnel and fulfillment of the grant, and 2) an additional percentage for facilities and administration. Depending on the grant, the F&A could be 10 to 50 percent.

F&A money would go to ASU, which “owns” the grant, not to the people of Scottsdale who paid for the facility. To recoup these costs, the city of Scottsdale needs a cost-sharing agreement prior to the grant being submitted. In the 20,000 pages of public records we’ve reviewed from ASU and Scottsdale, we have seen no mention whatsoever of ASU sharing its revenue.

Revenue-sharing was specifically excluded in the DDC business plan and the statements by the city treasurer cited above. Do you think ASU and Sam Campana forgot to discuss this? Multiple times we asked ASU’s point-person Duke Reiter — senior advisor to the president of ASU — to comment.

Multiple times Reiter did not reply. We think ASU knows exactly how its going to profit on the backs of Scottsdale taxpayers.

Editor’s note: Mr. Alexander is a resident of Scottsdale

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