Will lawsuit 'Re-Imagine Jackson'?

Outcome could affect key state economic program

By GIL BRADY
Star-Tribune correspondent

Filed 3.11.07

JACKSON – Before the untimely paperwork arrived in 9th District Court this month, challenging a request for $1 million in state funds by Imagine Jackson, a non-profit economic development corporation, things were cruising along for a group of prominent citizens here.

In February, Imagine Jackson cleared a major hurdle in its quest to secure a second, bigger state grant. Public scrutiny fading and required public sector co-sponsorship in hand – again, from the Jackson Town Council – the group was sailing toward its March 15 application deadline before state regulators.

That is until Peter Moyer, a critic of Imagine Jackson during his unsuccessful bid last year to unseat state Senator Grant Larson, R-Jackson, reportedly filed a pro bono complaint March 1, on behalf of Jackson resident Armand Acri, calling the deal unconstitutional.

New questions

Now new questions about high-tech firms with federal contracts, successful land developers, and well-connected residents, including a former White House staffer, are in play. Whether the town allegedly broke the law and bypassed voters in approving the grant will be for a judge to decide.

The Wyoming attorney general’s office, in approving Imagine Jackson’s first grant for $810,000 last June, said the project met “statutory and constitutional requirements” and that an “election” was unnecessary before the grant was awarded, state records show.

“The Wyoming Constitution is very clear the way I read it,” Moyer said recently from his downtown office. “There are three tests to giving public money to private entities.
“And (Imagine Jackson) doesn’t pass any of them. If people want to change the law, then it goes to the voters. You just don’t ignore the constitution or stretch (its) language.”

According to Acri’s complaint, Wyoming’s Constitution bans governments giving money to private entities except under three criteria: for necessary support of the poor; for economic development subject to strict limitations; and by voter referendum.

Moyer argues Imagine Jackson’s application fails his constitutional trifecta — in part, he says, because no obligation to repay funds exists. “It’s not a grant. It’s a gift,” he said.

Supporters & Letters

But others disagree with Moyer’s objections. And, in many ways, public reaction to Imagine Jackson’s vision to expand the local economy has become a litmus test for those with polarized views on growth and change in Wyoming.

Official public comment last January ran in favor of the town backing Imagine Jackson’s latest grant request. More recently, Imagine Jackson has challenged its critics to defend obstructing efforts to create high-paying jobs in a limited labor market.

Imagine Jackson “seeks to create knowledge-based jobs” that utilizes local “talent and intellectual capital,” Imagine Jackson board member Jennifer Mayfield, a former spokesperson for Vice-President Dick Cheney, said in a recent letter to a local editor.

“This is not about Imagine Jackson,” Mayfield said by phone recently. “This is about Peter Moyer challenging an economic development program instituted by our popular governor.”

Mayfield, who says she moved here last October, said her work for Imagine Jackson was voluntary. She also emphasized that Wyoming’s attorney general has already blessed the group’s first grant. The additional money, she explained, is to invest in “infrastructure to support our current growth” and buttress “future economies” against “bust and boom cycles.”

The current grant request is aimed at building a new facility on Imagine Jackson’s 0.7-acre lot. Who gets to erect the building, however, has some as concerned as who rents it.

Opinions on Procurement

Whether state law requires such private non-profit ventures as Imagine Jackson — which uses public funds to subsidize private business — to bid competitively for sub-contractor services, to ensure thriftiness and fairness, opinion varies.

Steve Achter, Director of Wyoming Business Council's Investment Ready Communities Program, said that “procurement standards for municipalities (and grantees) must conform to state laws.”

On the constitutionality of Imagine Jackson’s application, Achter declined comment–emphasizing the state was not party to Acri’s petition against the town of Jackson.

“We’ll see how it plays out in court,” he said.

By contrast, Moyer said because Imagine Jackson is a private entity “they are not subject to competitive bid, or open meeting laws.”

Pending state approval of their current grant, Mayfield said Imagine Jackson would bid competitively on any new construction with local firms.

Should the State Loan and Investment Board approve Imagine Jackson's latest request, Mayfield said the organization would seek competitive bids for any new construction from local firms. Imagine Jackson Chairman Mike Halpin's The Meridian Group, a land development company, would not be among the bidders, Mayfield said.

Loopholes & conflicts of interest?

Amid allegations of undue influence last summer regarding town Councilman Mark Obringer, Imagine Jackson’s executive director, the state awarded the organization $810,000 to buy a 1,708- square-foot building and adjacent land on South Park Loop Road.

Square One, Imagine Jackson’s tenant, reportedly has 3 years to generate at least eight jobs worth $348,000 in new payroll.

According to the robotics firm’s Web site, Square One assembles the “best minds” in an “idyllic location” to solve the “most challenging automation projects…(There are also tax advantages and other crass, mercantile reasons for our Wyoming location but really, they’re secondary).”

Before town councilors voted 3-1 to sponsor Imagine Jackson’s application last month, Obringer rebuffed claims Square One rents at a discount. While recusing himself from the vote, Obringer reportedly told Mayor Mark Barron he has yet to take a salary from Imagine Jackson.

However, whether the council examined Imagine Jackson’s present grant application before voting on it is unclear.

In response to a request for a copy of the application from the town, Assistant Administrator Roxanne Robinson said it was not on file. “According to Roger Bower, they don’t have to submit (their) application to get (a) resolution of support,” she said

Bower is a state regional director of loans and grants.

Paying twice?

A Wyoming attorney general's analysis of the first grant request last June shows that Square One has been awarded contracts by several federal agencies.

“During the past 12 months,” the analysis said, “Square One, Inc. has been awarded development contracts by the (Department of Energy), the National Institutes of Health and the U.S. Navy. As a result the business’ workforce has doubled and its revenue increased. Contracts for major new projects are now being finalized.”

Handed copies of the official analysis during a recent Jackson Town Council meeting and asked whether people were essentially paying twice—first through taxes that support Square One’s preexisting federal contracts, then again through state grants subsidizing Square One’s landlord—councilors deferred to the town attorney.

In an e-mail, town attorney Audrey Cohen-Davis said: “I would have to research the federal contracts you are referring to, and would have to ask the Wyoming Business Council who pays taxes or funds its grants. As you know, Wyoming does not have a state income tax.”

In 2006, Wyoming was reportedly one of seven states without a personal income tax. The state also has no corporate income tax.

Mayfield said since 2003 the Wyoming Business Council has awarded over $90 million in grants statewide. Each grant, she added, was found lawful “under the Wyoming Constitution by the Attorney General and, once approved, is regulated by the SLIB board.”

The business council's Web site shows that since 2003 the Business Ready Community Grant & Loan Program has awarded $71,119,769 in grants as of last month.

(Click & Read on courtesy of the Casper Star-Tribune)