February 28, 2018
In a February 28, 2018 email sent by the No DDC Team, the organization provided a detailed response to the recent letter written by Dr. Michael Crow, President, Arizona State University. The NO DDC Team’s email includes two videos.
The email indicates that the paragraphs that appear below – “The Desert Edge is a Huge Handout to ASU, – was initially published by the NO DDC Team three months ago. According to the email, NO DDC has since “shared several emails with ASU President Michael Crow. Crow refuses to consider the public’s overwhelming opposition to the DDC. We respect Crow’s dedication to ASU. It’s hard to blame him for accepting a $10,000,000″ handout from a foolish Scottsdale City Council. But we hoped for more from a leading academic.”
“The Desert Edge is a Huge Handout to ASU”
“The DDC is a massive gift from the taxpayers of Scottsdale to ASU. In the current plan before Council, ASU will get a facility worth $7,200,000, according to City of Scottsdale Public Works Director Dan Worth (November 6, City Council Work Study, 33:00). ASU will also get use of this facility completely free of lease or operating expenses.
“The DDC Business Plan says on p VIII-15: “Note that this analysis does not include any initial or ongoing payments by GDI (Global Drylands Institute) for use of its building and the overall site, nor payments for any operational services that may be provided by DDC.”
“The free ride is confirmed by City Treasurer Jeff Nichols, again at the November 6 Work Study, 52:40.
“There are no estimated payments I can tell you in the earned revenue from GDI. There is nothing assumed, there are no lease fees for the space that they’ll be occupying. Mr. Worth just touched on that they will not be contributing to the construction costss…There’s no revenue or cost sharing coming from GDI for that.”
“ASU is not even under any contractual agreement with the EDGE. They have no risk with the EDGE, other than filling the building with furniture and microscopes. ASU has no staffing requirements, no obligations to staff the facility on weekends, and no enforceable agreements to the community.
“ASU can pull out of the EDGE at any time, leaving the citizens of Scottsdale holding the bill and with a huge abandoned laboratory in the Preserve. If ASU chose to move the Global Drylands Institute from the EDGE to their new $300 million football facility, there is absolutely nothing the city of Scottsdale can do to stop them.
Tax Write-Offs
“ASU’s funding for its researchers and labs will be declared as in-kind donations to the DDC. ASU will claim all of this as a contribution to a tax-exempt organization. Inside their free building with free rent, ASU calls its operating costs a giant tax writeoff.
Here again is Treasurer Nichols from 1:01:00 to 1:03:00 in the workstudy:
“It would be contributed revenue, and they would give us the figures they feel that contribution is worth.”
“There’s a financial incentive here for the EDGE too! Sam Campana will categorize all the ASU donations as income for the EDGE. Not cash, but as “contributed revenue.” So when the EDGE loses $5,000,000 in cash, Campana will be able to claim the loss as much less thanks to the in-kind contribution from ASU.
“The people of Scottsdale will not get an honest picture of how much the EDGE will cost them in actual cash.
ASU Profit, but Not Sharing
“There’s one more huge present for ASU in this hustle. Most grants to fund college programs include two cost structures: 1) direct costs for personnel and fulfillment of the grant, and 2) an additional percentage for facilities and administration. Depending on the grant, the F&A could be 10 to 50 percent.
“F&A money would go to the University, which “owns” the grant, not to the people who paid for the facility. To recoup these costs, the City of Scottsdale needs a cost sharing agreement prior to the grant being submitted. In the 20,000 pages of public records we’ve reviewed from ASU and Scottsdale, we have seen no mention whatsoever of ASU sharing its revenue.
Revenue-sharing was specifically excluded in the DDC business plan and the statements by the city treasurer cited above. Do you think ASU and Sam Campana forgot to discuss this? Multiple times we asked ASU’s point-person Duke Reiter — senior advisor to the president of ASU — to comment.
“Multiple times Reiter did not reply. We think ASU knows exactly how its going to profit on the backs of Scottsdale taxpayers.”
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