Citizens commenting during call to the public at the Jan. 16 Town Council meeting called for an ethics investigation of Councilman Cecil Yates for conflict of interest in his dealings with the developer of the Park Place project in downtown Fountain Hills.

Mike Archambault, a former member of the council as well as former chairman of the Planning and Zoning Commission, told the council he believes there is a “stain on the council” due to conflict of interest by Yates.

“[Yates] has been protecting the developer and interfering with the town’s collecting delinquent development fees from the developer,” Archambault claimed.

Archambault stated that the company Yates works for, Commercial Properties, Inc., is the firm hired by Park Place as the designated leasing agent for commercial space in the development.

Yates confirmed the connection, but noted that brokerage and leasing is separate from property management and development, the division he runs.

Yates said he was not even aware CPI was in the running for the agreement until after it was selected.

Gene Mikolajczyk, also a former member and chair for the Planning and Zoning Commission, followed Archambault to the podium and outlined a number of questions he believes go to a conflict of interest and potentially breaking the law.

Mikolaczyk questioned whether Yates was providing information to the developer that related to executive session discussions.

“Did Mr. Yates disclose any confidential information [from] Town Council executive sessions or other sources to the downtown developer, their attorney or other representative,” Mikolaczyk asked.

He proposed a list of other questions to the council based on Yates’ relationship with the developer that he believes should be answered through an investigation.

“Was Mr. Yates’ conduct reckless or is there a criminal element to his behavior,” Mikolaczyk asked. “The council should refer this to an independent investigation.”

“You had better have proof,” Mayor Linda Kavanagh told Archambault and Mikolaczyk. “Take your accusations to the [Arizona] Attorney General, where we can defend ourselves.”

She added they can’t defend themselves against discussions being had on the internet pertaining to these matters.

Yates also pointed out that Mikolaczyk was himself the subject of a town ethics investigation last year that led to his resignation as chairman of the planning commission. (See separate story.)

Yates also suggested that the motive for the accusations is that he is a candidate for mayor, who at this point is challenged only by former Councilwoman Ginny Dickey, who Yates considers a political ally of Archambault and Mikolaczyk.

Connections

Yates said he runs the Property Management and Development division for CPI.

“We are a separate building from brokerage,” Yates said. “Oct. 18, 2017 [is] when the listing agreement was signed. I did not find out until the last week of October or early November when the leasing agent asked me who to speak with at the [town] for economic development.”

Yates said he informed Kavanagh, Town Manager Grady Miller and Economic Development Director Scott Cooper of the connection.

“I shared with them the RFP process, and that I had nothing to do with it and that I did not see a conflict of interest,” Yates said.

In response to an inquiry by The Times Yates said he contacted N-Shea Group to ask about their RFP process for selecting a broker.

N-Shea Group Chief Investment Officer Brad Ahrens provided Yates a list of nine firms that had made a request for proposals. He said the developer accepted five of those proposals, which was again narrowed to a final three.

“Ultimately we selected Trent Rustan of Commercial Properties due to his experience in the retail marketplace, his knowledge of Fountain Hills and the surrounding suburbs, his marketing reach/relationships with local, regional and national tenants and his enthusiasm and belief in the success of this project,” Ahrens said.

Yates said the listing agreement never influenced his decisions on Park Place or the development fees.

“All decisions on Park Place were made before the developer found a listing agent,” Yates said. “The proof [regarding development fees] is that the developer paid the fees in full, there was no influence.”

The council had approved the development agreement for the project in 2016.

With this discussion occurring during call to the public, the council could not discuss nor take any action regarding the accusations. Yates was permitted to respond in the public meeting because charges were being directed at him. He also responded to follow-up questions by The Times by email.