KINGMAN - Ruffled feathers over a $1 million check regarding a prospective land deal at the Kingman Airport and Industrial Park could prevent one of North America's largest steel companies from building a plant here.
The issue essentially boils down to concerns from the Kingman Airport Authority, which oversees the site off of Route 66 north of Kingman. Airport Director Dave French is upset that City Manager John Dougherty gave the check - which was written out to the airport authority - to Mohave County Supervisor Gary Watson last month instead of to him.
French admits he was upset, saying, "Why would they give anyone else a check made out to the airport authority besides the airport authority?"
Mayor Richard Anderson is appalled the airport authority released what he considers confidential information to the media that might expose the city to liability.
Councilwoman Jen Miles, meanwhile, wondered if Cives representatives and Anderson and Dougherty attempted to skirt federal laws regarding the sale of public land.
The company has been working with the airport authority for about seven years regarding the potential purchase of 25 acres of land with rail access at the airport and industrial park. A key element in public land sale laws is that the buyer must apply and pay a $3,000 fee to start the process, something Cives has not done despite expressing an interest in the property since 2008.
The property has not been appraised and since no land for new businesses has been sold at the airport for a number of years, nobody knows if $1 million is more or less than the land is worth.
The mayor at Tuesday's Council meeting said there were three issues to address regarding the check:
Citizens and Anderson's own colleagues on the Council want answers after the story was first reported in late June.
He is disturbed a company that wants to bring 150 jobs to Kingman might back out given the check controversy.
His deepest concern is that the airport authority might have violated its confidentiality agreement with Cives when it leaked the information to the media.
"There's a good reason for that," said Anderson. He said confidentiality and nondisclosure agreements are in play anytime two parties have an extended relationship, whether "real or implied, it exists."
Not in this case, according to French, who said on Wednesday that representatives from Cives had attended Chamber of Commerce meetings and "told everyone their plans." He said the airport authority is working with confidential prospects, but Cives is not one of them.
A check's tale
The question Anderson has most often been asked by citizens, however, regards the check.
"That's everyone's favorite question," he said. "It's with Cives." Wherever the check is, it was only good until midnight on June 19, roughly 14 hours after Cives gave the check to Anderson and Dougherty.
The company called the mayor between June 8 and 12 and requested a meeting regarding its intention to purchase the land, said Anderson. He called Bob Riley, the economic development director at the airport, who took the mayor on a tour of the site and was aware of the upcoming meeting.
That meeting occurred June 17 when Cives executive Thomas Farr met with Anderson and Dougherty at city hall. Anderson said Farr expressed a keen interest in the airport property and in bringing jobs to the community, but he also wanted a firm idea of what the 25 acres would cost.
Anderson said he told Farr that there have been no recent land sales at the airport and that made a fair market appraisal difficult to achieve.
Farr called Dougherty on June 19 and requested another meeting. He said the company wanted to let the city know it was serious about the purchase and to illustrate their intent they handed over a letter and the check, inside an envelope.
Anderson said he and Dougherty didn't think they could accept the check and told Farr they would have to consult with City Attorney Carl Cooper. Following that discussion, they would meet with the Airport Authority and provide Cives with a joint response.
Later that day, Anderson said he received a call from the media regarding the check. He said the reporter had "reasonably accurate information," but he was "appalled the media had the information" as it could be considered a violation of nondisclosure and confidentially agreements. He said lawsuits concern him.
Anderson said the only people that should have been privy to the potential deal were he and Dougherty, Supervisor Watson and the Airport Authority.
The check was still at City Hall by 4 p.m. when Anderson left to attend an Airport Authority meeting. He said French handed him an envelope with a demand from the authority that the check be returned to Cives immediately - and that the city prove to the authority that it had done so.
He said courtesy copies of the letter were sent to a number of people who have no role in the land deal with Cives and he was again concerned with violations of the confidentiality agreement.
"What really struck me," said Anderson, "is why didn't the director of the airport authority call the city manager to see what's up instead of give us the letter?"
"Why didn't he call me?" said French. "I didn't even know about it until Gary Watson called me."
On June 19, Anderson said he called Cives to advise the check was being returned, but Farr was doing humanitarian work in West Virginia so Anderson waited until the following week to send the check via certified mail. He faxed French a copy.
"That is the saga of the check," he said.
In response to critical comments regarding the mayor's understanding of land sales, Anderson said he and Dougherty are well aware of the process to sell public land, which involves Federal Aviation Administration regulations, state law and the policies of the Kingman Airport Authority.
Part of that process includes the application and $3,000, which would fund the appraisal and survey, along with administrative costs.
Anderson said Cives is frustrated over the system because the company could go through the process and still not know what the cost of the land is. He took a dig at French, who was in the audience, when he said the airport authority wants to get the most money it can for the land instead of putting in the work to determine fair market value. "You have to be fair," said Anderson. "Not get the most you can."
French on Wednesday said his hands are tied when it comes to selling public land.
"We have to get a licensed appraiser to appraise the land," he said. "We can't negotiate. I can't accept a million-dollar check."
The mayor said perhaps the best way to determine the land's value is to allow Cives and the authority to have separate appraisals done and then split the difference. He recommended the Council and airport authority hold a joint workshop to clear the air.
The conversation heated up considerably when Councilwoman Carole Young objected to what she characterized as Anderson's "defensiveness."
She said the mayor told her he was aware of the check on June 18, and said that he wasn't surprised when Cives proffered it on June 19.
"No I didn't," said Anderson.
"You most certainly did," countered Young. "Why did you accept it? Negotiating with two entities is always doomed to failure."
Young on Wednesday, however, offered the following statement: "It was not my intention to discredit the mayor," she said. "He knows the content of his meeting with Cives on June 17 better than I and I must have misunderstood our conversation.
"The mayor seemed to be focused on the media leak and the Kingman Airport Authority was focused on the check being presented to Supervisor Watson instead of them. Both have a legitimate grievance. At this point in time, the mayor and the airport authority will work together to find a solution to make the Cives opportunity a success."
Councilwoman Jen Miles was also upset. She questioned why Cives hasn't paid $3,000 to begin the process, but wrote a check for $1 million that expired at midnight.
"It makes a rather compelling argument for circumvention," she said.
Miles also said the issue has divided city leaders and is "throwing suspicion on the city that is unfavorable. The integrity of the city is now questioned."
Vice Mayor Mark Wimpee said after the meeting that he didn't think anyone had done anything improper.
"I just think it's a big misunderstanding," said Wimpee. "I think we, all of us, just want to see something good happen."