Westminster critics question openness of city on project
By Chris Barge, Rocky Mountain News
January 23, 2006
WESTMINSTER - Michael Melio was furious. Wal-Mart wanted to build a third
200,000-square-foot Supercenter in his hometown and the Westminster City
Council had welcomed the retail giant with open arms.
Melio was among more than 1,000 city residents who protested the project during
meetings last summer. Far fewer showed up at City Hall to support the plans.
To Melio and others, it seemed as if their local government had pledged its
allegiance to Wal-Mart and its bundle of promised sales tax revenue, rather than to
residents of the city.
Melio said he realized that at no point during the summer's hearings had the city
gone on record as to whether or not officials already had made a deal with Wal-Mart
that would pre-empt the ongoing public process.
On Aug. 29, Melio decided to try to change that.
By then, those opposed to Wal-Mart's plans had gathered almost enough
signatures to put a referendum on the Wal-Mart plan on the November ballot. In
response, the City Council called a special meeting, ostensibly to decide whether to
put the decision to approve the project on the ballot itself.
Mayor Nancy McNally gaveled the meeting to order inside City Hall and opened the
floor to public comment.
Melio was first to approach the podium. He had his question ready:
"Has City Council promised to or contracted with Wal-Mart any subsidies, property
tax abatements, income tax credits, sales or excise tax exemptions, tax-increment
financing, low-interest loans or loan guarantees, free land or land write-downs,
training grants, infrastructure aid or just plain cash?"
He waited for a response. His neighbors listened from the edges of their seats.
They hoped the city's response would reveal a too-cozy relationship between the
city and Wal-Mart and help their campaign to overturn the council's decision.
"This is time for you to speak to us, so please continue," Mayor Nancy McNally
replied.
"Is there an answer from the City Council?" Melio pressed.
"Not at this time," the mayor answered. "Please continue."
Melio had another question ready: "Has any member of City Council received or
come into agreement to receive any funds, remunerations, benefits or gifts of any
kind from the Wal-Mart Corp. or one of its representatives?"
"Thank you," McNally replied. "Next person that would like to speak?"
Melio was about to sit down with his questions unanswered, when Westminster City
Manager Brent McFall motioned from behind the dais.
In Westminster, where there is a city manager form of government, McFall is the
city's top executive and wields the most power. If anyone knew about any
undisclosed deals between the city and Wal- Mart, it was him.
"Mr. McFall?" Mayor McNally said.
"First, mayor, I would encourage you to encourage the crowd to behave
themselves," he said. "Secondly, there is no arrangement with Wal-Mart for any
funding, and the council individually or as a group has not received any funding
from Wal-Mart."
McFall maintains that was a true statement.
But internal city documents obtained by a citizens group through a Colorado Open
Records Act request suggest otherwise.
More than a year before McFall uttered those words, the city had brokered a deal in
which it promised what amounted to a $5 million tax break for Wal-Mart to build a
Supercenter on the southwest corner of 72nd Avenue and Sheridan Boulevard, the
records show.
Deal uses middleman
Wal-Mart protester Karen Sawicki found internal city documents in November that
she and others say proves that fact.
She found the documents after she hauled a photocopier to City Hall and spent
three days poring over thousands of pages made available to her after the Oct. 27
public information request.
The revelations outraged Sawicki, Melio and other Wal-Mart protesters. They say
McFall and the city misled them to keep secret information that might have changed
voters' minds on the ballot question.
The anti-Wal-Mart referendum was narrowly defeated, thanks in part to an active
campaign by the mayor and City Council members, funded by a $150,000
contribution from Wal-Mart.
Tonight, the City Council, meeting as the board of the Westminster Economic
Development Authority, is expected to officially approve the redevelopment
agreement they promised Wal-Mart's developer in 2004 .
Melio said he feels robbed.
"This is not the way a democracy is run," Melio said. "Why hide all this information
when there was major concern on the part of many citizens to find out what's
going on?"
During an interview at City Hall last week, McFall said he kept no secrets from the
public. He said he stands behind his statement to Melio that "there is no
arrangement with Wal-Mart for any funding."
He said the arrangement for funding $5 million of the Wal-Mart project was
between the city and Jordon Perlmutter, the owner and developer of the 72nd and
Sheridan property, not Wal-Mart.
The memorandum of understanding stipulates that Westminster will pay Perlmutter
$5 million in sales tax rebates, once the Wal-Mart Supercenter is up and running.
But the city also agreed that Wal-Mart would "front" Perlmutter that $5 million to
demolish the existing shopping center at the site, purchase about 17 acres of
adjacent land, and buy an existing home and relocate the property's tenants,
documents show.
McFall conceded that Perlmutter would pay Wal-Mart back once he got paid by the
city, effectively becoming a middleman between the city and Wal-Mart.
"If Wal-Mart is going to front the cash, then obviously Perlmutter is going to
reimburse them," McFall said.
Melio said this proves that the city agreed a year before the public approval process
began to give Wal-Mart $5 million by way of a third-party developer to build the
Supercenter.
"They should in clear language say, 'We are working a deal with Wal-Mart to give
them $5 million of your tax dollars and this is what we expect in return,' " Melio
said. "Why can't they speak plainly to us?"
Said McFall: "I answered Melio's question. If he'd asked a different question, it might
have been a different answer. But I answered his question."
Behind closed doors
Westminster staff began talking with Wal-Mart representatives about building the
72nd at Sheridan Supercenter in May 2003, documents show.
Wal-Mart Supercenters can bring a city $3 million a year in sales tax revenue. But in
some locales, the centers have become magnets for citizen protest.
Westminster city staffers apparently took pains to keep the negotiations out of the
public eye.
In an April 2004 e-mail, Becky Johnson, then the city's economic development
director, wrote to city staffers that Perlmutter wanted a letter stating that the
current shopping center at 72nd and Sheridan was blighted and "under threat of
condemnation."
"We've done this before and a letter is lower profile than a (Westminster Economic
Development Authority) resolution," Johnson wrote. "I told him we could do this,
but would rather leave it out of the redevelopment agreement, which will become
public. A city manager letter is also a public document, but it is unlikely that anyone
would ask for it."
Westminster spokesman Joe Reid said that letter was never drafted.
McFall said negotiations with developers often begin behind closed doors.
"When we're working with developers, there's always a lot of behind-the-scenes
work that takes place before a project becomes public," McFall said. "Developers
want to work out the details of the projects confidentially until such time as the
matter is to be acted upon publicly."
Still, McFall insists the funding deal with Wal-Mart's developer "was not a secret."
While the details of the memorandum of understanding, including the dollar
amounts involved, were not discussed publicly, he said he revealed to citizens when
questioned at other public meetings that the city had formed the basis of a
redevelopment agreement with Perlmutter.
The Rocky Mountain News requested from Reid minutes of any public meetings in
which the agreement was discussed, but had not received them by late Friday.
As for the retail giant's role in the negotiations, Wal-Mart spokesman Keith Morris
said it was up to the city to decide how to relate with its citizens.
"If things are done in an executive session, if they're done in a public hearing,
that's beyond our control," Morris said. "I hate to sound callous, but it sounds like
a fishing expedition by a group that's already lost twice.
"If there was something illegally done or circumvented," Morris added, "I know they
would have filed a lawsuit."
Melio acknowledges that the deal may well have been done legally.
"We need some laws that mandate complete openness on city finances and how
they're doling out taxpayers' dollars," he said. "This should highlight how they're
pulling the wool over the citizens' eyes and getting away with it."
bargec@RockyMountainNews.com or 303-892-5059
Copyright 2006, Rocky Mountain News. All Rights Reserved.
