The Amphi School District Wins One Round In Court, But More Legal Challenges Lie Ahead.
By Jim Nintzel
THE AMPHITHEATER School District won a round last week when Pima County Superior Court Judge John M. Quigley ruled that real estate broker Bill Arnold did not have a conflict of interest when he served as Amphi's exclusive agent.
Former Pima County supervisor David Yetman had sued the school district, alleging that Arnold's contract, which allowed him to negotiate his fees with the sellers of the property, created a de facto conflict of interest for Arnold.
As Yetman's attorney, Bill Risner, argued in papers filed with the court:
"Arnold/Genesis was allowed to negotiate whatever fee they could get with the seller even though they were the buyer's exclusive agent. The temptation for price inflation is obvious. The harder Arnold worked to reduce the price of the land, the less commission the seller would be likely to pay. He could not possibly serve most profitably his own interest and that of Amphitheater at the same time."
Quigley rejected that argument because the school board, not Arnold, made the ultimate decision to proceed with land purchases.
Amphi, which reformed its land-acquisition policies after Arnold's contract came to light in The Weekly, paid more than $3.5 million for various properties between 1992 and 1996. The sellers of the land paid Genesis Real Estate and Development, the firm which employs Arnold, more than $160,000 in commissions.
Two of the largest properties, for which the district paid more than $2.5 million, were not appraised before the sale. Their total value on the county's tax rolls was about $677,000. Arnold earned close to $100,000 brokering the two deals.
In an affidavit filed with the court, Arnold said, "Amphitheater instructed Genesis and I to locate property sites, but provided no specifics as to how we were to accomplish the task."
His testimony contradicted a recent claim by Amphitheater Superintendent Robert Smith.
In an Arizona Daily Star op-ed article defending the district's purchase of the high-school site now in legal limbo because of the possible presence of the endangered cactus ferruginous pygmy owl (a purchase brokered by Arnold), Smith wrote, "The site...met the district's long list of criteria...."
Amphi officials, who say they have released all records regarding Arnold's work for the district, have yet to produce any list of criteria for the property deals.
Yetman says he was disappointed--and nonplused--by Quigley's decision, which he is considering appealing.
"I'm somewhat perplexed by the judge's decision," says Yetman. "It seems to me that the judge is saying that, for instance, suppose the county were to privatize its purchasing department, and the director were to cut a deal with a car dealer and say, 'For every one of these that we buy, you give me a $1,000.' According to the judge's ruling, that would not be a conflict of interest. It strikes me as a blatant conflict of interest."
While Quigley dismissed the conflict-of-interest element of Yetman's suit, it was not a complete win for Amphi. Several other aspects of the suit--including the fact that the Amphi Board decided to enter into the contract with Arnold during an executive session and never approved the arrangement in an open meeting--have yet to be adjudicated.
"We'll certainly proceed with those," Yetman says. "I have no intention of giving that up."
MEANWHILE, A TRIAL regarding the aforementioned parcel acquired by Amphi through Arnold's dealings--the 70-plus-acre site which may be home to one or more pygmy owls--remains weeks away. The district's showdown in court with environmental groups, originally scheduled to begin April 1, was postponed until the end of the month.
Attorney John Fritsche, who filed suit against Amphi on behalf of the national environmental group Defenders of Wildlife, sought a delay in the trial last week when Amphi was slow to respond to requests for district records.
A redacted deposition from the case released to the media suggests building the school could put the owl in jeopardy.
Scott Richardson, a biologist with the Arizona Game and Fish Department who has spearheaded the state's pygmy owl surveys, told lawyers he believes a pygmy owl is active near the site.
Asked if he thinks the construction will harm any individual pygmy owl, Richardson said it had potential to do so.
"Based on my knowledge of what the school plans to do at this site and based on the locations of where we have had owls, I believe the site falls within the territory of the pygmy owl; and the activities and construction that they have planned, I believe, would disrupt the ability for that bird to carry out its normal pygmy owl behavior," Richardson said.
During his deposition, Richardson pointed to numerous sightings of the owl on property adjacent to the proposed school in the last few years.
Gary Woodard, an Amphi Board member who complained to reporters that the environmentalists were trying the case in the media because they didn't have a legal leg to stand on, provided a character reference for Richardson in some notes he wrote when the owl problem first hatched in February 1997:
"Scott Richardson is the Game and Fish point person for the pygmy owl," Woodard wrote. "He is open and honest, and balances wildlife concerns with human concerns. I believe we are lucky we are dealing with him on this."
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