Phoenix Council may testify in W hotel trial; Court to decide if conflicts existed in talks with developer
[Source: Jahna Berry, Arizona Republic] — Phoenix City Council members and their top aides may have to tell a court whether they had improper talks with the developer of a proposed $200 million W Hotel project. Last week, a Maricopa County Superior Court judge ordered a trial to sort through conflicting accounts about how the developer tried to sway city leaders to build the project. That means council members and top aides may have to testify about the behind-the-scenes lobbying tactics in the controversial project.
Developer Suns Legacy Partners was poised last year to build a 39-story W Hotel near US Airways Center in downtown Phoenix. A key part of the project was an 11-story office and condo tower that would have been built on top of a historic warehouse, preserving it from being torn down. Even if Phoenix wins the court case, litigation and other problems have effectively killed the hotel project for now. Legal wrangling has delayed the project, and the developer’s deal with W Hotel expired because ground was not broken by June 30. In his four-page Sept. 18 ruling, Maricopa County Superior Court Judge Peter Swann wrote that a trial would have to sort out whether Mayor Phil Gordon, his council colleagues, and their aides had improper talks with Suns Legacy Partners, the development group that includes Suns owner Robert Sarver and former Suns owner Jerry Colangelo.
The litigation is just about procedures; it’s not about the City Council’s decision to build a condo tower on top of a historic building, the mayor and the city attorney say. The city is weighing its legal options, City Attorney Gary Verburg says. Gordon denies any wrongdoing. “There was no influence behind the scenes or any type of nefarious-type discussions,” Gordon said. “Everything was public.”
The preservationists are prepping for trial, although no date has been set. They filed the lawsuit to protect the 1920s warehouse, the last vestige of Phoenix’s old Chinatown. “Phoenix can do better with its historic structures.” said Barry Wong, a former state lawmaker who is a spokesman for the coalition of preservationists and Asian-American community groups.
The City Council was essentially sitting as a judge when it overruled the historic-preservation officials who didn’t think the condo tower should be built on top of the historic warehouse, the coalition argued in court. When acting as judges, council members can’t have outside talks with the parties in the dispute, the preservationists argued.
The warehouse, the Sun Mercantile Building, is owned by the city. Suns Legacy Partners has a long-term lease agreement. Lawyers for both sides agree that preservationists and the hotel developer lobbied the City Council. However, the preservationists argue that council members and their top aides — including the mayor’s senior assistant, Bill Scheel — may have been swayed by undisclosed talks with the Suns Legacy developer.
The contacts included a Dec. 6 letter from the developer’s lawyer. The preservationists also point to a form letter that Scheel used to respond to several people who e-mailed Gordon about the project. In addition to replying on behalf of Gordon, Scheel lauded the project as a “reasonable and positive re-use” of the 1920s warehouse.
Scheel, who has helped run Gordon’s election campaigns, downplayed the letter. Gordon said his staff gives him advice, but ultimately he and the rest of the council made the final call. In court, the city argued that council members were more aggressively lobbied by residents and groups that opposed the 11-story tower. The city’s legal team also argued that the City Council avoided communicating with either side after it was clear that issue would be appealed to the full council.
Since council members are routinely lobbied on issues, it would have been impossible for them to know before the appeal that they should be careful about talking about the case, Verburg said. In affidavits, council members said that they did not talk to the developer after Suns Legacy appealed the decision the historic preservation decision. Swann, however, ruled that any contact with parties in the hotel fight could fall under scrutiny.
[Click here to download Maricopa County Superior Court Judge Peter Swann’s ruling of September 17, 2007.]
[Source: Jahna Berry, Arizona Republic] — A proposed $200 million boutique hotel in downtown Phoenix was on life support, but a judge’s Tuesday ruling has effectively killed the existing deal, the developer said. Phoenix Suns majority owner Robert Sarver was poised to build a 39-story W Hotel near US Airways Center. The development would have included an 11-story office and condo tower built on top of a historic 1920s warehouse.
Maricopa County Superior Court Judge Peter Swann ruled that a jury should decide whether the Phoenix City Council had improper talks with Sarver before it decided the fate of the warehouse on the hotel site. That litigation could drag on for a year or two years on appeal, said Robert Yen, an attorney who represents several groups that want to protect the Sun Mercantile Building, which is considered by many to be the last vestige of Phoenix’s once thriving Chinatown. “It was a building built by a very prominent Chinese family,” Yen said of the Sun Mercantile. Back in the 1920s, the property housed a wholesale grocery store owned by Shing Tang, a Chinese immigrant. The Tang descendents, many of whom still live in Phoenix, include the late Thomas Tang, a former Phoenix City Councilman and federal judge.
The hotel project had another problem, Sarver said Tuesday. The agreement with Starwood Hotels and Resorts Worldwide Inc.’s W Hotel brand expired because the project didn’t break ground by June 30, he said. “It’s too bad, because that’s a part of Phoenix that needs development,” Sarver said.
[Click here to download Maricopa County Superior Court Judge Peter Swann’s ruling of September 17, 2007.]
[Source: Save SunMerc Coalition] — On Friday, January 13, 2006, in order to preserve their right as citizens and associations to litigate and provide reasonable notice of their continuing claims and legal theories, a motion was filed in Maricopa County Superior Court by the following groups: Arizona Asian American Association, Arizona Asian American Museum Foundation, Arizona Preservation Foundation, Capitol Mall Association, Chinese United Association of Greater Phoenix, Downtown Voices Coalition, Garfield Neighborhood Association, NAILEM, Neighborhood Coalition of Greater Phoenix, Oakland University Park Neighborhood Association, Ong Ko Met Family Association, Organization of Chinese Americans (Phoenix Chapter), and Story Preservation Association. Other groups are considering joining the appeal. The groups’ sole concern is with the historic Sun Mercantile Building, not the W Hotel or adjacent new construction condominium. All parties want, advocate, and work for a vibrant, 24/7 downtown -– a downtown that looks to the future, but respects its heritage.
Legal counsel carefully researched and reviewed the Sun Mercantile Building issue. The appeal of the City Council’s decision is based on the following arguments:
- There is no credible evidence in the record supporting the City Council’s reversal of the decisions by its own Historic Preservation Commission and Historic Preservation Officer.
- The City Council’s decision is contrary to law. It directly contradicts the Phoenix Historic Preservation Ordinance and applicable state and federal historic preservation statutes, regulations, and rules.
- The City Council was obligated to review the decisions by the Historic Preservation Commission and Historic Preservation Officer as a quasi-judicial body, not as a legislative body. By approving the 11-story addition to the top of the Sun Mercantile Building the Council acted legislatively as opposed to quasi-judicially, thereby exceeding its legal authority and jurisdiction and abusing its discretion in approving a dramatic change to the Sun Mercantile Building.
- The City Council effectively removed the Historic Preservation zoning from the property (if left in place this action will likely result in the Sun Mercantile Building being removed from the National Register of Historic Places and/or the Arizona historic register) without adhering to the Phoenix Zoning Ordinance and proper notification process.
- The City Council’s approval of the 11-story tower atop the Sun Mercantile Building is contrary to the Conservation, Rehabilitation, and Redevelopment Element of the City of Phoenix General Plan. The illegal zoning change effected by the approval of the 11-story tower is inconsistent with the Phoenix General Plan.
The groups have requested a temporary restraining order, temporary injunction, and/or permanent injunction that would prohibit the City and City Council from taking any further action in regard to redevelopment of the Sun Mercantile Building as approved by the Council on December 14, 2005.
[Source: Syleste Rodriguez, KPNX Channel 12 News] — The fight heats-up over plans for a downtown development. Several groups are fighting to keep the Sun Mercantile building protected from high-rise developers. This civil suit is asking to preserve this site, once home to the only grocery wholesale business in the state. The future of this piece of history, now left in the hands of a judge. It was the city’s original Chinatown, this historic building now faces a threat, from high-rise developers. “My father in law’s business was on this end,” Pearl Tang said. Brick by brick, Pearl Tang’s father-in-law’s wholesale grocery business boomed. “It stands to show how much the Chinese Americans participated in building the state of Arizona,” Tang said.
Developers want to build 11-stories on top of the Sun Mercantile Building, and another building 39-stories high East of where the Suns play. The 39-story building would be the second tallest building in downtown Phoenix. Last month, the city gave developers the green light for both projects. Now, the 11-story project is being challenged with a lawsuit, the city plans to comment on the lawsuit next week. “Of course it would destroy all the landmarks,” Tang said.
Suns CEO Robert Sarver was unavailable to comment Thursday, but told 12 News in December he wants to pay tribute to the Chinese American contributions to the city while moving forward with redevelopment. Tang appreciates Sarver’s plan, but says it isn’t enough. “I think the city should have something to show for it’s history,” Tang said. The Phoenix City Council approved the high-rise project for both buildings in December. [Photo source of Reporter Syleste Rodriguez: Channel 12 News.]
Phoenix City Council at its December 14, 2005 hearing sided primarily with the real estate developer and ignored most of the pleas of the Chinese- and Asian-American and historic preservation communities to preserve the historic 1920s Chinatown Sun Mercantile Building and set aside 4,500 square feet of space for a history museum. The council allowed the developer to build 11-stories of condominiums through and above the Sun Merc. In addition, in hopes of pleasing the Chinese- and Asian-American communities, it required the developer to set aside 1,000 square feet of space inside the Sun Merc and 1,000 square feet of space outside the Sun Merc for exhibits and displays for museum use, and required the developer to donate $75,000 over two years to the newly created Arizona Asian American Museum Foundation.
Rally, Lion Dance. The day began with a rally outside next to the council chambers by supporters of saving the Sun Merc. Over 100 supporters attended the rally where a pair of traditional Chinese lion dancers performed to bring good luck to and drive away evil spirits from the city council hearing. Supporters held up signs in English, Chinese, and other Asian languages to save the Sun Merc and for an Asian museum. They were heard chanting “save Sun Merc, save Sun Merc, save Sun Merc.” It was quite a scene, with television, radio and newspaper reporters present to record the moment. Barry Wong, Chairman of the Save SunMerc Coalition, gave remarks energizing supporters in advance of the council’s hearing.
Council Hearing: Community Leaders Speak. The City Council started its hearing at 5 p.m. to address the Sun Merc matter. By way of background, the luxury hotel and condominium developer had appealed the prior decision of the city’s Historic Preservation Commission that favored the historic preservation and Asian American communities. The Commission required the developer to remove from its plans the 11-stories above the Sun Merc and that at least 4,500 square feet of space be reserved for use by the Asian American community for history museum use. Nearly 200 supporters of saving the Sun Merc and setting aside space for an Asian American museum attended the hearing, mostly Chinese- and Asian-Americans. Also, 30-some members of the Chinese Senior Citizens Association, led by its president, Mr. Wen, made a special trip to attend the hearing. This issue, for the first time, galvanized the Chinese- and Asian-American communities to attend and protest their city government elected leaders to take action in support of their community.
After city staff and the developer’s representatives spoke, Barry Wong was called up by the mayor to testify and make an opening statement on behalf of the Save SunMerc Coalition, followed by Jim McPherson, President of the Arizona Preservation Foundation.
The public was later given the opportunity to comment as well. Many Chinese- and Asian-American community leaders stepped forward to speak, including Dr. Pearl Tang, wife of the late Hon. Thomas Tang, former Phoenix Vice Mayor and U.S. Court of Appeals Judge for the Ninth Circuit; Eddie Yue, President, Chinese United Association of Greater Phoenix; Eva Li, president, OCA/Phoenix Chapter; Arif Kazmi, President, Arizona Asian American Association; Annie White, Overseas Chinese Woman’s Club; John Tang, past president, Chinese United Association; Doris Ong, member, Board of Trustees, Phoenix Art Museum; and Virginia Chang, President, Desert Jade Woman’s Club.
Decision, Future Action. After nearly three hours of testimony, the city council discussed the issue and rendered its decision. After the decision was announced, the developer still would not commit to the 1,000 square feet designated for inside the Sun Merc and wanted the council to place more restrictions on how the Arizona Asian American Museum Foundation could use the developer-required donation of money. Supporters of Sun Merc in the audience were disappointed with the council’s decision, then booed and groaned upon hearing the offensive, non-committal statement from the developer. The Save SunMerc Coalition will meet with their legal advisors to decide whether to appeal the council’s decision to court.
Save SunMerc Coalition was formed and has been working daily since early October 2005, in conjunction with the Arizona Preservation Foundation and other historic preservation groups, to preserve Sun Merc and secure space for a museum. Core members of the Coalition are Barry Wong, Eddie Yue, John Tang, Dr. Pearl Tang, Arif Kazmi, Doris Ong, Lani Wo, past president, Chinese United Association, Arnold Wo and Chantri Sukpon Beck, President, Thai-American Friendship Organization.
Thanks to Ed Sharpe of the Glendale Daily Planet, the Phoenix City Council meeting of December 14, 2005 was filmed (apparently city government doesn’t film regular council meetings for later broadcast on Channel 11; only policy sessions).
Click here to access the unedited footage and photos from the public rally and hearing where the fate of the historic Sun Mercantile Building in downtown Phoenix was debated.