Phoenix City Councilman Michael Nowakowski addressed reporters on Oct. 6, 2015, to respond to a developer’s claim that he failed to disclose a conflict of interest related to a downtown land sale worth $8.5 million.
Since at least last spring, the Arizona Attorney General’s Office has conducted an investigation involving Phoenix Councilman Michael Nowakowski, The Arizona Republic has confirmed with several public officials.
While the exact nature of the investigation is unclear, the Attorney General’s Office requested public records from the city that correspond with the city’s work on a downtown land sale, one that sparked wide concern about Nowakowski’s involvement.
Public records and statements obtained by The Republic in recent days are the first public confirmation of a probe.
About a year ago, the Attorney General’s Office requested, by phone, copies of Nowakowski’s official calendars, city officials told The Republic.
In response to a public records request, the city gave The Republic copies of the documents it provided to the attorney general: calendars for a 10-month period from January to October of 2015.
The controversial land deal was first considered early that year, and was shut down after an October 2015 report by The Republic on the councilman’s possible conflict of interest.
Nowakowski, whose private-sector employer — the Cesar Chavez Foundation — was a co-bidder for the land, denied any wrongdoing. Phoenix ultimately canceled the sale of the $8.5 million property, a highly coveted piece of land in the downtown core.
In addition to requesting city documents, the Attorney General’s Office interviewed two city employees regarding the land sale, Phoenix City Attorney Brad Holm told The Republic this week. He would not disclose the names of those interviewed.
In response to questions about the status of the investigation, the attorney general’s spokeswoman Mia Garcia said the office cannot comment on the case.
“The Attorney Generals’ Office does not comment on ongoing investigations,” Garcia said in an email, adding that information would be released once a case closed or resulted in charges.
“If there is any information I am able to release on this case,” she said, “I will let you know.”
The Attorney General’s Office has not contacted Nowakowski regarding the land sale or any other issue, said Kory Langhofer, an attorney representing the councilman.
Neither Langhofer or Nowakowksi provided further comment on the issue.
State investigates land deal
Holm said the Attorney General’s Office requested interviews of the two people from the city and conducted those interviews “roughly 10 to 11” months ago.
“The attorney general has been pretty clear with us that they’re gonna do this and they don’t need anything else from us and … we just sit here not knowing what if anything will transpire,” Holm said.
Holm said the records of Nowakowski’s calendar were provided in May 2016 and there were no further requests for more documents.
“There have been no requests for documents since 2016,” Holm said. “Occasionally, we check in with the attorney general just to say, ‘Do you need anything?’ And we’ve been told, ‘We’ve got it under control and we’ll let you know.’ We have not taken any further action.”
He said he didn’t know the status of the attorney general’s investigation and said the last conversation with state officials regarding the inquiry was likely months ago.
Former Maricopa County Attorney Rick Romley said he’s relieved that the state has conducted an investigation. He previously called for the county attorney or the state attorney general to investigate because, he said, a private law firm the city hired to review the matter was not thorough. That firm declined to comment on the criticism at the time.
“I, first of all, felt that the investigation that was asked for by the city management was totally inadequate,” Romley said.
“Even if this matter is closed with no charges being brought, it does raise an ethical issue and I would hope the city itself would refer it to a new ethics panel that they have created.”
Why land deal was controversial
Phoenix City Council responds to conflict of interest investigation
Controversy over Nowakowski’s conduct related to the sale of city-owned land erupted in fall 2015, after the Chavez Foundation and Trammell Crow, a national commercial developer, were named the city’s preferred bidders to buy and develop the key downtown property.
Nowakowski was accused, by a rival team of developers, of not properly disclosing a conflict of interest related to the sale. A development team from the firm Deco Communities said the councilman met with them about the project in spring 2015 but never disclosed that his employer was also looking at bidding on the land.
The 7.6-acre property, on Fillmore Street between Fourth and Sixth avenues, is one of the most coveted pieces of vacant real estate left in a downtown core booming with construction. It’s in Nowakowski’s council district.
Nowakowski, who runs a network of radio stations owned by the Chavez Foundation, said he had no financial interest in the deal and he didn’t know his employer would bid on the land when he met with the team of rival bidders.
“How would it be a conflict if I didn’t even know the foundation was bidding on it?” Nowakowski said at the time. “We’re separate. We don’t even share office space. They’re out in (Los Angeles).”
Trammell Crow later revealed that Nowakowski had personally alerted his boss at the Chavez Foundation to the forthcoming sale. Public records show Nowakwoski’s office also requested a phone call between a foundation executive and Deputy City Manager Paul Blue, which Blue said was a discussion about the basics of the bidding process.
Despite Nowakowski’s role in alerting his boss to the land sale, his attorney said the councilman still didn’t know the foundation would ultimately pursue a bid.
A private law firm, hired by the city to review the accusations, later concluded the bid process was fair and found no evidence that Nowakowski violated any laws.
“It confirms what I have said from the beginning: I was falsely accused of having violated a conflict of interest, and there is no evidence to support the accusations,” Nowakowski said in a statement after the report was released.
But critics blasted the law firm’s report as being incomplete because Trammell Crow refused to provide emails and other requested documents. Romley called the report a “joke” and called for the state or county to investigate.
The Republic later obtained records that showed Nowakowski’s then-chief of staff received emails about managing the situation from a man hired as a political consultant for Trammell Crow on the Fillmore project.
The emails contained information about the company’s response to the controversy. One included a subject line that read, in part, “… Only for you and michael to look at but please do not forward by email. Print please.”
A spokesman for Trammell Crow at the time said the company didn’t know, until presented with the emails, that the consultant was in contact with Nowakowski’s office regarding the controversy, saying the consultant went “cowboy.”
The company also said it had no relationship with Nowakowski.
Phoenix ultimately rebid the land sale, a process that continued as the Attorney General’s Office was investigating.
Trammell Crow submitted another bid, this time without the Chavez Foundation as its partner. The company was selected as the city’s recommended bidder last fall, but the deal has yet to close.
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