In a surprise turn of events the Town Council abruptly fired Town Attorney Andrew McGuire with a 4-3 vote at its Oct. 3 regular session.

The Council vote severed ties with McGuire and his firm, Gust Rosenfeld, effective immediately following the meeting. It ends McGuire’s 15-year tenure representing the Town of Fountain Hills.

Some council members cited an extended pattern of concerns with the town’s legal representation.

“Over the past several years I have observed a pattern that our town attorney’s decisions and advice had continually led to judgments and conclusions not benefiting the town,” Councilman Cecil Yates said.

Concerns about the town’s legal representation have come up before; however, those discussions have generally focused on cost, and ultimately the council decided to retain McGuire and Gust Rosenfeld.

This time Yates, Mayor Linda Kavanagh and Councilman Dennis Brown expressed concerns regarding the manner in which McGuire had been handling legal matters related to the Park Place development in the downtown. Councilman Art Tolis joined those three in voting to terminate McGuire.

The town is currently in litigation with N-Shea Group, the developer of the Park Place complex, over more than $460,000 in development fees the town says it is owed. Bart Shea, president of N-Shea Group, filed suit claiming they do not owe the fees.

Discussion

Brown made the motion to terminate the legal services.

“My concerns have been with the process in which the negotiations for the development agreement for Park Place and the MorningStar land deal were handled,” Brown said. “I have lost confidence in the advice you provide us.”

Vice Mayor Alan Magazine took issue with the process the council was using for the dismissal.

He said in all his years in business and government service, he had never heard of a termination without a performance appraisal.

“We certainly have not had due process in this instance,” Magazine said. “If this [motion to dismiss] fails I will move for a process that includes a performance appraisal.”

Resident Bob Wilson called the proceedings a “kangaroo court,” in which McGuire was not getting a chance to defend himself.

Wilson also made reference to a court hearing on Sept. 7 regarding the Park Place lawsuit in which he alleged that an attorney for N-Shea Group alluded to placing three members of the Town Council on the stand to support the position that development fees were not owed on the project.

“I don’t think it is any coincidence that these are the same three council members who asked for this [legal services discussion],” Wilson said.

Yates offered a transcript from the Sept. 7, hearing in which Mr. Lunn, attorney for the developer, stated: “I can guarantee you when I have Mayor [K]avanagh, Councilman Yates, Councilman Brown on the stand, they’re going to testify otherwise. They had never understood that development fees were issued.”

“At no time did any council member ever offer waiving of [development] fees as a solution,” Yates said.

Payment meeting

The “last straw” leading to McGuire’s termination was what some council members construed as his unprofessional effort to facilitate a meeting related to payment of the delinquent development fees.

“The town attorney…tried to set up an unauthorized and undisclosed meeting without the council and developer’s knowledge,” Yates said. “He unilaterally tried to negotiate directly to the finance company of the Park Place project instead of with the developer.”

McGuire explained that it was an attorney for RCS, the firm that is a partner in the Park Place development, who is in charge of finances.

He said he was getting calls and emails “out of the blue” from the RCS attorney wanting to know about the litigation with N-Shea Group.

McGuire said he hesitated to return the attorney’s call because of the pending litigation. Also, McGuire said that every time he talked with her he “caught hell” from council members.

McGuire quoted the attorney as stating, “as the property owner, I give you authority to call me directly if you have an issue.”

He went on to say she stated RCS wanted to talk with town representatives.

“We want to figure out what we owe you and to get you paid. We want our finance people to talk to your finance people [with no attorneys involved],” McGuire quoted the attorney.

Another RCS employee following up on the call sent an email regarding the proposed meeting, a copy of which ended up in Kavanagh’s inbox. Kavanagh said she was angry about being left out of the discussion.

“[That everything blew up] does not change the fact that my actions were specifically for the benefit of the town [in] getting these fees paid,” McGuire said.

“I was at Town Hall all day and someone could have picked up the phone and said, you know this is going on,” Kavanagh said. “You [McGuire] set up a meeting…with a financial backer that we had never directed anybody to directly negotiate with.

“We were negotiating with the developer at the same time you set up this meeting knowing the developer is going to be left out and don’t even tell anybody on the council. That’s the problem. We did not direct you to do this, so the meeting is cancelled.”

More discussion

In continuing the discussion Magazine expressed his confidence in McGuire’s advice, as did Councilman Henry Leger.

“This is the lowest I’ve ever seen in my years on the council,” Leger said. “I have absolute trust in [McGuire]. He is not responsible for this situation. We are. We made our own decision on the [Park Place] development agreement.

“I never felt I was misled. He is very professional in his approach, and brings institutional knowledge. I have never heard from staff that they don’t trust this man.

“This is outrageous.”

Councilman Nick DePorter participated in the meeting by telephone. He stated that he is a supporter of taking time to review legal services to see whether there are better options. He prefers to have someone in house. However, he voted with Magazine and Leger in support of McGuire at this meeting.

“I’m disgusted with this whole thing,” DePorter said. “Everyone has their own narrative.

“I believe there is a benefit in having an in-house legal staff. I just don’t know whether this is right. There is so much crap going on, drama. I don’t think it should happen like this.”

Tolis said he was extremely torn by the discussion, but said he was ultimately going to defer to the leadership of the mayor and vote with her.