The DDC is a massive gift from the taxpayers of Scottsdale to ASU. In the current plan before Council, ASU will get a facility worth $7,200,000, according to City of Scottsdale Public Works Director Dan Worth (November 6, City Council Work Study, 33:00). ASU will also get use of this facility completely free of lease or operating expenses.
The DDC Business Plan says on p VIII-15: “Note that this analysis does not include any initial or ongoing payments by GDI (Global Drylands Institute) for use of its building and the overall site, nor payments for any operational services that may be provided by DDC.”
The free ride is confirmed by City Treasurer Jeff Nichols, again at the November 6 Work Study, 52:40.
“There are no estimated payments I can tell you in the earned revenue from GDI. There is nothing assumed, there are no lease fees for the space that they’ll be occupying. Mr. Worth just touched on that they will not be contributing to the construction costss…There’s no revenue or cost sharing coming from GDI for that.”
ASU is not even under any contractual agreement with the DDC. They have no risk with the DDC, other than moving their furniture and microscopes. ASU doesn’t have to staff the facility on weekends, or meet any obligations to the community. They can pull out any time, leaving the citizens of Scottsdale holding the bill. Maybe move the Global Drylands Institute to their new $300M football facility?
The Secret Santa
ASU’s funding for its researchers and labs will be declared as in-kind donations to the DDC. ASU will claim all of this as a contribution to a tax-exempt organization. Inside their free building with free rent, ASU calls its operating costs a giant tax writeoff.
Here again is Treasurer Nichols from 1:01:00 to 1:03:00 in the workstudy:
“It would be contributed revenue, and they would give us the figures they feel that contribution is worth.”
There’s a gift here for the DDC too!! Sam Campana will categorize all the ASU donations as income of her own. Not cash, but as “contributed revenue“. So when the DDC loses $5,000,000 in cash, Campana’s books will say only $4,000,000 was lost thanks to the the gift from ASU. Do you trust this arrangement?
All The Ribbons and Bows
There’s one more present for ASU in this Three-Card Monte” hustle. Most grants to fund college programs include two cost structures: 1) direct costs for personnel and fulfillment of the grant, and 2) an additional percentage for Facilities and Administration. Depending on the grant, the F&A could be 10%-50%.
F&A money would go to the University, which “owns” the grant, not to the people who paid for the facility. To recoup these costs, the City of Scottsdale needs a cost sharing agreement prior to the grant being submitted. In the 20,000 pages of public records we’ve reviewed from ASU and Scottsdale, we have seen no mention whatsoever of ASU sharing its revenue. Revenue-sharing was specifically NOT included in the business plan or in the statements by the City Treasurer. We asked ASU’s lead Duke Reiter — Senior Advisor to the President of ASU — to comment multiple times, and got no reply. This seems like something one wouldn’t just overlook.
Merry Xmas ASU! Love, the DDC. Big lump of coal for the Scottsdale taxpayers.