The board of directors of the Southeastern Economic Development Corp. will be asked to tomorrow to approve, for the third time, the controversial selection of the developer for the Valencia Business Park.
The previous board of directors awarded the development rights for the project to a Pacific Development Partners, a Los Angeles-based developer, twice. But, in July, City Attorney Mike Aguirre opined that the development deal was null and void because of a conflict of interest involving then-board Chairman Artie M. “Chip” Owen.
Owen has a continuing business relationship with PDP and had reported receiving between $10,000 and $100,000 a year for the last four years from the company. He recused himself from board votes involving the deal while he was SEDC’s chairman, but Aguirre opined that mere recusal was not enough, and that Owen’s relationship with PDP violated the state conflict-of-interest law. Aguirre’s opinion states that any deals inked between SEDC and PDP were void.
But now the PDP deal is back on SEDC’s board agenda, and outgoing SEDC President Carolyn Y. Smith has signed a staff report recommending the selection of PDP.
The agenda is drawn up by SEDC staff. Calls to the agency were not returned. Two board members told me it was inappropriate for the board to be voting on PDP’s proposal for the Valencia Business Park considering Aguirre’s advice. And board member Rich Geisler said he was surprised to see the item on the agenda with no mention of the conflict of interest issue.
Geisler said he had previously suggested that the SEDC board revisit the deal and begin to discuss anew the future of the project. But he said he expected to see more detail on the agenda for tomorrow’s meeting, which contains the same staff report on the project that was used months ago, and makes no mention of Aguirre’s opinion.
“I wasn’t expecting the exact same staff report. I asked them to consider the city attorney’s opinion,” Geisler said.
Board Chairman D. Cruz Gonzalez told me the board can “do what it likes tomorrow” when it comes to the Valencia Business Park deal. But, he said, he would rather see the issue dissected in a subcommittee of the agency before it is discussed or voted on by the full board.
Huston Carlyle, the city attorney who liaises with SEDC, did not answer a call for comment.
This would be the third time the SEDC board has been asked to approve a development agreement with PDP for Valencia Business Park.
The developer was first awarded the project in 2005 after the agency asked developers to propose industrial projects for the land. PDP proposed building a 65,000-square-foot industrial park, and agreed on a purchase price of $1.5 million for the land.
But the project eventually morphed into a commercial project; it was scheduled to house a Tesco supermarket and fast food outlets. PDP asked the city to rezone the land to accommodate its new vision. A rezone would have likely doubled or tripled its value, but the purchase price for the parcel remained the same.
After the City Attorney’s Office and Councilman Tony Young’s office cited concerns about the changing face of the project and the way the development deal had been awarded, SEDC broke ties with the developer and put the project back out to bid.
The board again awarded the project to PDP in June, but agreed to a purchase price of $562,235 for the land — almost $1 million less than originally agreed upon for the industrial project, despite the potential increase in value if the land is rezoned for commercial use.
That purchase price remains the same in the staff report attached to tomorrow’s agenda.