TAYLOR — It sounded great, a master plan for Taylor airport, sometimes called the Taylor Business Park. In October 2002, the Taylor Town Council approved the capital improvement program for the endeavor.
It wouldn’t be “an industrial park, but a business technical park,” said then-Airport Manager Richard Prior about plans to develop the 100-plus acres southeast of the airport which the town bought from the Palmer Family Trust in 2003. “We want to bring in clean industries that offer higher salaries. It would really help our economy,” he told the council. Planners envisioned green spaces, recreation areas, daycare centers and even a movie theater. The runway would be strengthened to accommodate Lear jets; new hangars and taxiway lights would be built. Best of all, the federal government would pay for 91% of the $2.5 million cost, with the town paying only $115,000.
That was then. Now, 17 years later, there is no business park, and on May 4, Taylor residents, property owners and taxpayers sued the town. The plaintiffs are Aaron and Gary Solomon, Marion Hatch and Richard and Alice Franco; the defendant is Town of Taylor Municipal Property Corporation. Plaintiffs allege that the town has made illegal, unconstitutional gifts to insiders, had an impermissible conflict of interest, and used illegal parliamentary maneuvers to move things along, including violating Arizona’s open meeting law. The Arizona attorney general in May 2019 produced written findings that the town had indeed violated the open meetings law in two out of three alleged incidents with regard to the business park.
Plaintiffs also asked for an injunction to stop the town from taking further action on the whole mess until a court could sort it all out and determine whether the actions the town has taken thus far were legal or not.
Taylor Mayor David Smith, in an email to The Independent on May 14 says that the allegations “are completely unfounded,” and that the plaintiffs are “asserting facts that are both wrong and of which they have no first hand knowledge.” Smith says that two of the plaintiffs “are not even Taylor residents,” and some “have sued the Town before without merit.”
At the heart of the dispute is Hatch Development LLC (“Hatch”), reportedly owned by Jason and Shannon Hatch. In September 2018, Hatch offered to sell to the town land for its business park, divided into two parcels, A and B, about 150 acres, for $750,000. Right off the bat, that was curious because, as stated above, the town had already bought the property once in 2003, or at least 100-plus acres of it. The tangled machinations of how the town ended up not owning it anymore and how Jason Hatch, a partner, and corporate entities tied to Hatch ended up with the property at various times is outside the scope of this report. Suffice it to say that on Nov. 20, 2018, the town signed a purchase agreement with Hatch and the very next day, paid the seller $292,000 for Parcel A.
That was illegal, say plaintiffs, because Arizona law requires a 30-day waiting period between the time a municipality agrees to such a transaction and when it actually goes through with it. In this case, the town forked over the cash in less than 24 hours after the deal was OK’d by the town. Plaintiffs also allege that the town didn’t get an accurate appraisal and plaintiffs say the town didn’t assure that the title was clear, which it wasn’t, and it cost the town a year’s worth of legal work to get the title cleared.
Regarding conflicts of interest, plaintiffs say that Council Member Fay Hatch, who voted for the agreement, is related to Jason Hatch, and the law required Fay to disclose the connection and to recuse himself from the vote, neither of which he did.
Then there is what the plaintiffs characterize as “gifts.” First, the Arizona Constitution forbids governments of all shapes and sizes in the state from making sweetheart deals with private commercial interests, the so-called “Gift Clause,” or more accurately, the Anti-Gift Clause. Plaintiffs claim that pieces of Parcel B, under contract to be sold to the town for an agreed upon price, already have been peeled off and sold or given to others. For example, the complaint alleges that in October 2019, “Jason Hatch gave 0.38 acres of land to Marchell J. Williamson III and Sara A. Williamson,” who happen to be Taylor Mayor Smith’s daughter and son-in-law, at no cost to them. As stated, Smith says the allegations are unfounded.
That’s not all. Plaintiffs claim that five months after the town paid $292,000 for Parcel A, and the price for Parcel B had already been agreed to, Jason Hatch sold 1.13 acres of Parcel B to a business there, Kay Supply. Plaintiffs claim that Hatch pocketed $18,000 paid by Kay Supply, which the plaintiffs say rightly should go to the town of Taylor as part of the purchase of Parcel B. Moreover, the agreement says that after all is said and done, Hatch gets to keep any three acres he wants, which he can “cherry-pick,” says the suit.
To the plaintiffs, these dealings are just more of the same in a long history of the town favoring Jason Hatch. In their attorney’s letter to the town dated April 28, 2020 they call Hatch an “inexperienced novice” when it comes to real estate development. After the town originally bought the park in 2003, plaintiff Richard Franco by sworn affidavit alleges that in 2006, Jason Hatch “begged” the town to hire him as the developer “despite his lack of development experience and without engaging in any sort of bidding process,” the complaint reads. The town hired him anyway, to the tune of $300,000, say plaintiffs, “upon information and belief.”
Hatch started by installing water lines which “inadvertently flooded a neighboring property owned by the Hunts,” plaintiffs allege. The Hunts promptly sued for $60,000 in damages, which the town of Taylor, not Hatch, ended up paying, the suit says. Plaintiffs say that the town could have demanded that Hatch pay the damages but did not.
Apart from the sketchy-looking parliamentary processes including the open meeting law violations, the fast payment for Parcel A, the alleged conflicts of interest, the illegal “gifts,” the attempt to “ratify” a null and void agreement, the plaintiffs claim that it’s altogether a bad deal for residents of Taylor. They say that the town really isn’t getting 150 acres for $750,000.
First, they claim, 20 acres are unusable because they routinely flood, Hatch gets to keep three acres of his choosing, he’s already sold 1.18 acres to Kay Supply, and the mayor’s daughter and husband got 0.38 acre for free. What’s really happening, plaintiffs say, is the town of Taylor is getting 125.93 acres for $750,000, thus paying $5,995 per acre, which is way more than the acres are worth. Plaintiffs cite a recent sale of “comparable vacant land in the town of Taylor, that closed in January 2020 for $3,580 per acre.”
Regarding the plaintiffs’ request for an injunction, their reasoning is that the Nov. 21, 2018 payout of $262,000 for Parcel A was “null and void” under the law because the town didn’t wait the 30 days before closing and forking over the cash. To apparently try to remedy that, the town set the matter for discussion during a meeting set for April 2, 2020, and attempted to “ratify” the Nov. 21, 2018 closing that resulted in the $262,000 payout. But the plaintiffs allege that the town did not give the notice required by law about the April 2 meeting and in any event, an attempt to “ratify” the sale of Parcel A has no legal effect because the town didn’t wait the 30 days before closing. That makes the Nov. 21, 2018 sale null and void: A sale that’s null and void can’t be “ratified” as a matter of law, say plaintiffs.
During the May 7, 2020, council meeting, the council was set to approve a lease purchase deal from Zion Bank, presumedly to pay for the remaining Parcel B, which is smaller now thanks to the transfers of parts of it to Kay Supply and the mayor’s daughter, plaintiffs say. They asked for the injunction to stop the council from doing that at their May 7 meeting. The Navajo County Superior Court issued the injunction restraining the town “from moving forward in any way with the Purchase and Sale Agreement dated November 20, 2018 between the Town of Taylor and Hatch Development LLC (for the business park).”
As typical in temporary restraining order cases, the court’s injunction would go into effect once the plaintiffs posted a $12,000 bond. That money could be claimed by the town if plaintiffs are wrong and the town suffered an economic loss because of the injunction. The town pulled the Zion Bank item from the agenda on May 7 and did not vote on it. The motion to “table” the measure was approved by a unanimous vote. The posting of the bond was therefore not necessary.
The plaintiffs allege that if the town is allowed to go through with the sale, it would end up totally paying “Jason Hatch $1,079,000 over the years for his involvement in the failed development of the business park,” reads the plaintiff attorney’s April 28, 2020 letter to the town. Meantime, plaintiff Franco wrote The Independent on May 14, 2020, to say that the trial on the matter is set for July and the town has agreed to not take further action on the matter until the court rules.
On Friday, May 15, The Independent contacted attorney William Doyle of The Doyle Law Group in Phoenix. The firm is expected to defend the suit on behalf of the town. Doyle was specifically asked about the viability of the Nov. 20, 2018 agreement, the alleged land transfer to Kay Supply and Smith’s daughter, the town paying the Hunts’ claim for flood damage, the allegation that 20 acres of the park are unusable because of flooding, the clouded title issue from Parcel A and the town’s attempt to “ratify” the deal in an April 2, 2020 meeting. Doyle answered, “I have nothing to add beyond the Mayors (sic) statement.”
Mayor Smith, in his final remark, said, “The Town is confident that in the end the Court will allow the transaction to proceed.”