Two Salt Lake City Council members angrily denied rumors aired by one of their colleagues Thursday that "some kind of deal was cut" ensuring a local bank would win a $23 million bonding contract and reap $40,000 in fees.
Council members W.M. "Willie" Stoler and Florence Bittner said contrary to a deal-making rumor revealed by Councilman Tom Godfrey, they did not promise Zions First National Bank a $23 million Block 57 financing contract.Godfrey did not implicate anyone in the rumor, which he raised during a meeting of the Redevelopment Agency, for which the council serves as the board of directors, but stood by his story of rumors that assurances were made to Zions.
"You know I used to teach journalism," Godfrey told the Deseret News, "and I check my sources. Rumor might be a euphemism."
Zions was named in a resolution passed by the RDA in 1984 to serve as financial consultant for what is now $23 million in bonding to pay for land acquisition and public infrastructure construction on Block 57.
Block 57, bordered by State and Main streets and First and Second South streets, is the target of major redevelopment efforts by the city.
However, no formal contract was ever signed with Zions. Additionally, Godfrey said he knows of rumors that council members promised Zions no effort would be made to bid out the contract to other institutions.
So, he moved Thursday to rebid the contract to clear the air. "My thing was that after five years, shouldn't we relook at this and put it out for bid, especially with the rumor that's going around."
That prompted angry responses from other council members.
"To vote for that makes me sound like a person who was wheeling and dealing," Stoler said, adding "I haven't talked to anybody, my conscious feels good."
Hours after Godfrey raised the issue during the RDA meeting, Bittner and Stoler interrupted a City Council meeting to again deny the rumors.
"I want you to know absolutely, categorically, definitely that I have not had meetings or conversations with any of our counsel," Bittner said.
Stoler challenged Godfrey to name the subject of the rumor and substantiate his story. "If somebody's got something, spit it out," he said.
Bittner and Stoler pointed to past run-ins with principals in Zions to account for the rumors. Stoler said he had a conversation with one Zions employee in a grocery store parking lot but did not discuss the contract.
"If I'm guilty because I bumped into someone at the market . . . if that's the inference, then I'm damn mad," he said.
Bittner said she talked to another Zions principal over the phone two weeks ago but said "the inference that there was some kind of deal struck . . . I think is very serious and I'm going to go on record that I have nothing to do with anything like that."
The council voted down Godfrey's motion and voted 5-2 to not reopen the bidding process and to make a formal contract with Zions.
Zions and the RDA negotiated a contract giving the bank a fee of $1.75 per $1,000 in bonds issued, for a total of $40,250 in fees, RDA Executive Director Michael Chitwood said.