PROVO — Mayor Lewis Billings has walked away from nearly $2 million in potential Provo real estate profits "to avoid even the appearance of impropriety," he said Wednesday in a memo he delivered personally to the Deseret Morning News bureau in Orem.
A story in Tuesday's edition of the newspaper reported that Billings owns 10.85 acres in the old Ironton section of Provo, now part of the area where the city is preparing to sell the first commercial property in the Mountain Vista Business Center.
That information surprised Provo City Council Chairman George Stewart and City Councilman Steve Turley when the Deseret Morning News contacted them on Friday to ask if it was common knowledge on the council that Billings still owned land in the business park.
Each said they thought the mayor had liquidated the land. Stewart said Billings should have revealed the potential conflict of interest before the vote, but Stewart and Turley said they wouldn't have changed sides when the council gave unanimous approval of the city's sale of the first 10 acres in the business park to Action Target for $110,000 per acre.
"It didn't affect my vote," Stewart said, "but you like full disclosure, knowing all you can know, when you make a decision like this. The mayor might have felt like that happened, but with the current council, it has never been disclosed."
Other City Council members said they didn't know, either, or knew years ago but forgot about the mayor's interest in Ironton at the time of the Action Target vote.
In his memo, Billings expressed frustration that members of the City Council would suggest he failed to disclose the information. Billings also attached several documents to the three-page letter:
Copies of 11 newspaper articles, editorials and letters to the editor from 1997 and 1998, showing that his pending sale of 149 acres to the city was scrutinized during his first campaign for mayor and first year in office.
The disclosure forms Billings filed with the city last month and in 1997, when he was a city employee.
A 1999 City Council resolution that requested Billings, then the mayor, work on the development of the Ironton property despite his potential conflict.
That resolution led to the completion of the sale of 139 acres by the mayor to the city at what his memo called "a deeply discounted price." The deal began in 1992, when he granted Provo an option to buy the property. The City Council waited seven years to exercise the option. When it did, it got a steal, according to Billings' attorney, Richard Hill, getting the land at $3,000 an acre.
The reason for the discount was soil contamination. In his memo, Billings said it was clear a government entity had the best chance of bringing together all the parties necessary to clean up the site of a former steel mill.
Billings gave the city an additional 10 acres. He kept 10.85 acres, which he placed in a blind trust in 1998. Using a blind trust is common for politicians with a potential conflict of interest. Hill contended that because the City Council must approve every expenditure on the business park, and Billings cannot influence the trustee, Steve Hortin, he is shielded from any accusations of conflict.
Hortin has sole power to decide to hold on to the land or sell it. If he sold the land, he would not inform Billings, Hortin said.
In his memo, Billings contended that after he set up the blind trust, "what the trustee did or did not do with the assets in trust was no longer within my control and as such it was no longer possible for me to specifically say whether the trust owned or had sold any given property at any given time."
Billings criticized Stewart for not remembering Billings' earliest disclosure, checking his latest disclosure or checking with Hortin to see what interest Billings still has in Ironton.
His latest disclosure, forms that Stewart said the council didn't see, was signed on July 10. In it, Billings didn't state that he owns land in Ironton through the blind trust. Instead, he said that "I am not aware of what assets are actually within the trust at any given time."
The mayor, the council and anyone else could find the information another way. The Deseret Morning News, following a story published four years ago, confirmed Friday that Billings still owned the land by reviewing public land records on the Utah County Web site.
Hortin said that so far, the best way to manage Billings' land has been to hold on to it.
"At the time I took over the trust, there were a number of things that needed to be clarified before I did anything," Hortin said. "I've fielded a few offers, but I thought some things needed to be done to maximize the value. I need to see what this is really going to develop into."
The picture is getting clearer after a couple of parcels in the business park changed hands in the past few years and because of the pending sale to Action Target, which Hortin said he learned about from a newspaper story after returning from Florida on Tuesday.
"It's getting easier to peg a value," Hortin said.
In his efforts to avoid the appearance of a conflict, Billings stepped out of meetings in 1997 and '98 when the subject of Ironton arose. Then the 1999 City Council approved his inclusion in the development of Ironton/Mountain Vista.
The mayor's activities on behalf of the city have at least twice put him in close contact to the real estate he owns through the blind trust. His holdings are split into four pieces, three of which are adjacent to land owned either by a company he has praised in his role as mayor or with which the city is negotiating a major deal.
None of Billings' parcels is considered prime. The two largest are land-locked, with no road access planned. Further review at the Utah County Recorder's Office showed that those two parcels are next to land owned by Novatek.
Novatek is preparing to develop land it owns in the business park, said Dixon Holmes, assistant director of the city's Economic Development Department. Novatek owns at least five parcels, according to the newspaper's review of land records. All are adjacent or near land owned by Billings. Holmes stridently defended the mayor, reporting that Billings has stayed out of the Action Target negotiations and left Mountain Vista development plans to the economic development team, but Holmes acknowledged that bundling Billings' and Novatek's land together could increase the value of Billings' land by linking it to road access.
There's no evidence that has ever been discussed or envisioned, but in his role as mayor, Billings has repeatedly praised Novatek, like he has other companies, and founder and president David Hall for the company's success and creation of jobs in Provo. The mayor singled out Novatek in his state-of-the-city address this year.
Hortin declined to say whether Novatek has approached him about purchasing any of Billings' properties and said he can't discuss potential offers with Billings. Messages left for Hall on Wednesday afternoon were not immediately returned.
Another example is a thin strip measuring .07 of an acre owned by Billings. The strip is likely worth little, but it does connect to a large parcel controlled by John Curtis, the owner of Action Target. The city is negotiating a $3.3 million deal to buy Action Target's property in downtown Provo and pay to move the company to Mountain Vista, where the company would receive incentives from the city to buy land, become the first tenant and help set property values.
Billings did not outline how he reached the figure of nearly $2 million in unrealized profit potential personally lost in Ironton. Clearly, he might have made more on the sale of 139 acres to the city. Instead, he said he did what was best for Provo — make a deal that could lead to development of the largest tract of undeveloped land in the city and creation of new jobs.
The 10 acres he donated to Provo eight years ago could have fetched $600,000 to $1 million, Hill estimated.
"When all is said and done," Billings wrote in his memo, "I have personally walked away from more than $1.8 million at Ironton. I have sought to be honest and generous with Provo City at every turn. I have made full disclosure. I have repeatedly set aside my own personal interests in order to avoid even the appearance of impropriety."
E-mail: twalch@desnews.com