Scottsdale aims to block depositions

Scottsdale is trying to prevent Mayor Mary Manross and 10 other city and state officials from answering questions under oath about the validity of a lease she signed that could cost the city millions of dollars.

Lawyers from Hualapai LLC, a private investment group, and the city debated the merits of the depositions during a court hearing Monday. The hearing was part of a condemnation lawsuit brought by Scottsdale against the firm last year to obtain a 7-acre property north of Loop 101, between Hayden and Pima roads, where the city is constructing a water plant expansion.

Dale Zeitlin, an attorney representing the firm and its principal, Robert Kimball, is also seeking the depositions of Scottsdale City Attorney Deborah Robberson, senior assistant city attorney Bruce Washburn (who is handling this case for the city), asset management coordinator Stanley Seigal, Arizona Land Commissioner Mark Winkleman, and six other state employees.

“Because the city is not admitting the lease is valid, I need to prove that it is,” Zeitlin told the court.

Washburn responded by saying he objected to all the depositions. “I don’t think they are relevant and they are a waste of time,” he said.

The two sides agreed to discuss the matter outside of court and return for a June 25 hearing. A trial is tentatively scheduled to start in Septem- ber.

Hualapai LLC obtained the property in July for $6.1 million by outbidding the city during a state land auction. Previously, Manross had signed a lease with the state for the city to use the property. The city now claims the lease is not valid and it does not owe rent payments to the firm that could run up to $10 million.

On April 27, Hualapai LLC filed a notice of claim with the city seeking $9.7 million in damages, or the cost of the lease. The city has 60 days to respond or the claim is deemed denied. A notice of claim is a precursor to a lawsuit.

Zeitlin said the depositions would shed light on what Manross knew and was told at the time she signed the lease. Manross has not returned phone calls concerning the matter.

In November 2005, after the terms of the lease were agreed upon, the city asked the state to revise the signature page to add spaces for the signatures of the mayor, city clerk and city attorney, according to an e-mail exchange between city and state employees that was included in court documents. The change to have the mayor sign was at the direction of the legal department, the document states.

The mayor, who is required to sign all leases, then added her signature on Nov. 30, the same day a city report prepared by the assistant city manager and municipal services general manager informing the council of the lease was completed.

That report was included as part of the Dec. 13, 2005, City Council agenda informing them of the lease, but only its first-year payment of $2,400, not the drastic increases in years two through 10 of about $1 million annually. No council vote was taken.

Scottsdale now argues that because the council did not vote, the lease is not valid and they are not responsible for the payments. Scottsdale, however, has used the lease to enter the former state trust land and start construction of its plant expansion. Hualapai LLC, in its notice of claim, is alleging that under that argument, Scottsdale is trespassing on the property.

City officials could not answer Monday why the lease was never presented to the council for a vote, even though the legal department, city manager’s office and mayor knew of it.

The city’s position is it’s not relevant why there wasn’t a vote, just the fact the vote didn’t happen.

‘If it didn’t go, it didn’t go,” Washburn said.

Hualapai LLC bought the land for $6.1 million, well above the state’s appraised price of $4.865 million. Scottsdale listed its own appraisal of $3.2 million as probable damages, which Hualapai LLC rejected.