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May 7, 2008 - 5:50PM
Scottsdale OKs spending $125K in land case
Brian Powell, Tribune
Scottsdale will spend up to $125,000 on outside lawyers to represent the city against the Hualapai investment company in a case over a disputed land lease signed by Mayor Mary Manross.
Land lease snafu raises questions
The Scottsdale City Council voted unanimously Tuesday to approve the two-year contract with Mariscal, Weeks, McIntyre & Friedlander that authorizes the maximum spending amount.
The firm will take over from Scottsdale deputy city attorney Bruce Washburn, who has handled the case for the city for the past 20 months.
Scottsdale City Attorney Deborah Robberson told the council the city was recommending outside counsel because of the law firm’s resources and for workload reasons. On Friday, Robberson sent a confidential memo to the City Council that included legal advice.
A trial had been set for June, but both parties agreed to first argue the validity of the lease before moving to a trial. That hearing date has not been set.
Hualapai LLC and its manager Robert Kimball are seeking up to $8 million in damages on top of the $5.2 million already paid by Scottsdale to take possession of the 7-acre parcel between Hayden and Pima roads, north of Loop 101.
Hualapai outbid Scottsdale for the state trust land in 2006, paying $6.3 million for the site. Scottsdale needed the land to expand a water treatment plant.
In 2005, Manross signed a 10-year lease with the state land department that allowed Scottsdale to start work on its expansion before the planned auction. The first year’s rent was $2,400, which increased to close to $1 million in years two through 10.
Scottsdale anticipated buying the land at auction and not paying rent for those later years, but were outbid, which has led to the court battle.
Manross has not commented on why she signed the lease without it being approved by the City Council, citing the ongoing litigation.
During Tuesday’s council meeting, Scottsdale Councilman Tony Nelssen asked for an explanation about the case. Robberson said to be specific about the city’s position would not be wise to share publicly.
According to court documents, the city’s position throughout the lawsuit has been that because the City Council never approved the lease, it is not valid. Hualapai has argued that Manross’ signature makes it a valid lease and if it’s not, the city committed fraud by not disclosing before the state land auction that it considered its own lease invalid.
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