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JMI Realty says it pulled out of a plan to fund a new study examining a split Convention Center expansion long before it got called out for a potential conflict of interest.
The city’s potential decision to choose a new split Convention Center expansion rests on a study under way that may conclude it’s what convention clients want.
In March, the Convention Center Corp. announced JMI Realty had agreed to help pay for the $90,000 study – it sent out a press release saying as much, and it included the contribution in materials sent to board members. JMI’s involvement was instantly controversial because the company has lobbied for the very type of expansion the study would examine and the company’s properties neighboring Tailgate Park, where the expansion could take place, would benefit if it became reality.
The only problem: JMI officials deny they ever formalized plans to fund the study, which is being conducted by Conventions, Sports & Leisure International. They also say they only became aware they were still listed as funders after Council President Sherri Lightner questioned whether their involvement posed a conflict of interest.
“I was never informed that (the Convention Center board) action was being taken, was not asked to enter into a contract, send a letter or even for an email to confirm our participation,” John Kratzer, CEO of JMI, told me in an email.
It’s not entirely clear what went wrong when, and who may have failed to communicate JMI’s change of heart, but here is what we know about the company’s disputed $30,000 contribution.
Sometime earlier this year, Convention Center Chairman Steve Cushman, who serves as liaison to the mayor’s office for the expansion project, asked JMI Realty to contribute toward the costs of a new expansion study, and JMI was open to the idea.
“When Mr. Cushman initially contacted me asking that we participate in an already planned Convention Center study, I responded by saying yes we would be willing to do so and we scheduled a meeting with his team to discuss their plan,” Kratzer said.
Kratzer and Cushman met at the mayor’s office, and discussed the plan for the study. The date of this meeting and subsequent communication to the mayor’s office isn’t clear. Multiple requests for clarity from the mayor’s office and Kratzer have gone unanswered, and Cushman has referred all questions to Convention Center staff.
Kratzer says he communicated that the study didn’t seem necessary and “It was immediately after that meeting that I instructed our folks to inform the mayor that we did not believe that our participation was either necessary or wise. I believed the matter was closed. … We did not communicate our decision directly to Steve Cushman, as is now apparent we should have done.”
“Initially JMI had said they would be willing to be partners in the study with the Convention Center and the city,” said Matt Awbrey, chief of communications for Mayor Kevin Faulconer. “However, since then, we mutually agreed it would be better to not pursue that approach so that there would be no chance for the perception that any one hotel had greater involvement than any other in this study.”
A spokesman for the Convention Center also said, “JMI was involved and agreed to contribute $30K to the cost of the study.”
That spokesman, Steven Johnson, discussed JMI’s contribution with the City Council budget committee May 7, where Lightner expressed her concern.
Johnson said he called Kratzer later that same day to update him.
“At that time he indicated that he would simply pull out of paying their part for the CSL study to avoid the appearance of a conflict,” Johnson said. “I told him he needed to have that conversation with Stephen Cushman, as he was responsible for pulling together the three partners to fund the study.”
A week after that, on May 14, former City Councilman Carl DeMaio blasted the loss of another site being eyed for a possible expansion – one that would allow a contiguous expansion – known as Fifth Avenue Landing. DeMaio heaped more criticism on JMI’s involvement in the study of a non-contiguous expansion.
Two weeks later, on May 29, the Convention Center sent an invoice to JMI for its share of the study. It went unpaid.
Convention Center officials were still confirming JMI’s study contribution in June.
I asked Kratzer during an interview June 10 whether he was concerned JMI’s involvement would taint the results of the new expansion study, and he told me the company had recently pulled its contribution, which we reported the next day
“They came to us and said we want to do an independent study and we said yes,” Kratzer told me last week. “Then as we got into this process and as people started raising questions, we re-evaluated that and backed out.” When I asked when, he said roughly three or four weeks ago.
There’s a lot still unanswered in the Great JMI Contribution Debacle of 2015.
For instance: Were JMI officials not clear initially and along the way about their level of commitment? Did Cushman take the liberty of adding JMI to the Convention Center agenda when he shouldn’t have, and the Convention Center ran with it? Did someone in the mayor’s office fail to timely communicate to the Convention Center that JMI had backed out early on?
Something else also remains: A $30,000 bill with no one to pay for it.