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“Government can only be accountable if taxpayers can see what they are buying and how much they are paying for it.”

State Treasurer Cary Kennedy commenting on the Colorado Department of Treasury website that tracks how Colorado tax dollars are spent, as quoted on TheDenverChannel.com 03/07/2010.

Meeting puts more heat on Rivera

By Daniel Chacon and Rich Laden, The Colorado Springs Gazette,
June 25, 2009

Mayor Lionel Rivera faced more criticism Thursday over his role in the city's efforts to retain the U.S. Olympic Committee's headquarters in Colorado Springs, this time for arranging a meeting with executives of LandCo Equity Partners two weeks after the city asked LandCo and other developers if they were interested in providing new USOC facilities.

The latest criticism follows a conflict-of-interest complaint against Rivera, filed last month with the city's Independent Ethics Commission by a local businessman. The businessman alleged Rivera had business ties to LandCo Chairman Ray Marshall at the same time the mayor was representing the city in its talks with LandCo, a real estate company that was chosen to develop the new USOC facilities.

The Ethics Commission has launched a formal investigation of the complaint. On Thursday, Rivera said the businessman and his attorney have brought "unfounded allegations" against him.

On Sept. 27, 2007, Rivera convened a gathering of Vice Mayor Larry Small, two members of the newly formed Downtown Development Authority board, Marshall and LandCo President Jim Brodie. Small is also a DDA board member.

The meeting followed a Sept. 12 letter city officials sent to LandCo and three other development groups, asking them to submit development proposals to attract a "headquarters operation" to downtown. That headquarters turned out to be the USOC, which has been in the Springs since 1978, but which was exploring new facilities.

At the Sept. 27 meeting, Rivera and the other attendees discussed the DDA's initial reluctance to support LandCo's proposal to gut an existing two-story building at 27 S. Tejon St. and transform it into the six-story Stratton Pointe office building. LandCo had made a preliminary presentation to the DDA in July 2007, seeking funding help for Stratton Pointe, according to DDA Board Chairman Nolan Schriner. Schriner attended the Sept. 27 meeting along with DDA board member and downtown businessman Mike Hassell.

The DDA, created by voters in 2006 to help fund downtown projects, was cool to providing financial help for Stratton Pointe because LandCo wanted to connect the new building to a city parking garage via a skybridge over Colorado Avenue, Schriner said.

Several downtown boosters said they didn't like skybridges because they take pedestrians off the street and away from retailers, among other reasons.

In an interview Thursday, Rivera said he generally liked skybridges, had seen them in Las Vegas and already had talked to another developer several months earlier about a separate skybridge idea elsewhere downtown. The mayor said he convened the Sept. 27 meeting because he wanted to learn more about LandCo proposal's and the DDA's initial hesitancy toward it.

Rivera denied he called the meeting to influence DDA board members into supporting LandCo's project.

"The best way to get information and to get points of view is to invite everyone who has one," Rivera said. "That's what the meeting was about. To get information about skybridges."

By conducting such a meeting two weeks after the city approached developers about providing facilities for the USOC, and inviting Marshall to attend, Rivera gave the appearance he might have been lobbying the DDA into supporting the LandCo project, critics said.

In May, Ron Johnson, president and chief executive officer of Central Bancorp Inc., alleged to the city's Independent Ethics Commission that Rivera, a vice president of investments at financial giant UBS Financial Services, handled accounts for Marshall around the time the city was in talks with developers about providing new USOC facilities.

This month, an attorney for Marshall told the Ethics Commission that Rivera had handled three accounts for Marshall or Marshall-controlled partnerships, one dating to 2005.

Marshall asked Rivera to stop being his account representative in October 2007, the attorney said.

Rivera, citing UBS' confidentiality policy, won't comment on clients; the mayor, however, has denied he had a conflict of interest with anyone related to the USOC deal.

In March 2008 and after months of talks led by Rivera, the city, LandCo and the USOC agreed on a $53 million deal that called for LandCo to provide offices in its Stratton Pointe building for the USOC, while also remodeling a former downtown city utilities building into space for Olympic-themed national governing bodies.

Some people have questioned if Rivera steered the USOC deal to LandCo. Jim Scherr, the USOC's former chief executive officer, told The Gazette in May the city chose LandCo, not the USOC. However, Jim Didion, a national real estate expert who served as a USOC consultant, told The Gazette last week that while the city presented development proposals to the USOC, the sports organization made the final choice of LandCo, and Rivera had no influence on the decision.

The USOC deal has since fallen apart for myriad reasons, including the collapse of the nation's credit markets, LandCo's funding problems and a lawsuit LandCo filed against the city and the USOC for allegedly failing to live up to their end of the deal.

Schriner said that the Sept. 27 meeting, held in a conference room at City Hall, lasted about 20 minutes, and that Rivera, Marshall and Brodie said little. Schriner said he explained why the DDA didn't like the skybridge. The USOC never came up in the discussion, Schriner said, and the mayor never discussed his relationship with Marshall.

Schriner described the meeting as "matter of fact," adding he provided information about the DDA's position on the skybridge.

"If it was intended to be some kind of meeting to help change that decision, it didn't occur," Schriner said.

Johnson, who filed the ethics complaint against the mayor, said the Sept. 27 meeting would "appear to be inappropriate" if the mayor pressured the DDA because of his business relationship with Marshall at the time.

"If in fact the mayor was trying to influence the DDA to extend TIF (tax increment) financing to the Stratton Pointe project and to warm up the notion of a skybridge even though everything written on the downtown vision ... says ‘we don't want skybridges,' that certainly is a curious meeting," Johnson said.

LandCo had sought to use increased property tax revenue, or tax increment financing, from Stratton Pointe and two of its other redeveloped downtown buildings and earmark the money to help pay for a portion of Stratton Pointe, Schriner said. Despite its initial concerns, the DDA endorsed the LandCo financing plan in spring 2008 after the skybridge proposal had been endorsed by city planners, he said.

Veteran attorney Lindsay Fischer, who is representing Johnson in the ethics investigation, called the Sept. 27 meeting "inappropriate."

"The reason it was inappropriate was simply because Marshall and Brodie had tried to approach the DDA directly without the mayor and got nowhere, and then they went around the DDA and got the mayor to call in the DDA," he said. "That's what was inappropriate about it."

Marshall could not be reached Thursday.

Fischer said the Sept. 27 meeting will help, but not prove, his ethics case against the mayor.

A Rivera-convened meeting with Marshall, Brodie and DDA board members might have created the appearance the mayor did so to argue on LandCo's behalf, said Chantell Taylor, director of Colorado Ethics Watch, a watchdog group.

"Even if he (Rivera) didn't directly lobby on behalf of LandCo, just his use of influence and power to bring those people together for that discussion seems improper, in light of the fact that he didn't disclose the relationship (with Marshall)," she said.

For the full story, please visit http://www.gazette.com/news/downtown-57306-marshall-landco.html

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