WATCH OUT FOR THOSE MOGULS!
Denver deputy mayor Bruce Alexander, the city's chief negotiator in the Winter Park deal, is the ski area's former banker--a tie that has remained undisclosed throughout months of debate on the proposed sale of the resort.
Also the city's manager of parks and recreation, Alexander has been Mayor Wellington Webb's point man in behind-the-scenes dealings with the Winter Park Recreation Association (WPRA), a nonprofit corporation that has launched an aggressive campaign to take the lucrative city-owned resort private.
Alexander stresses that he retired from banking in 1981, and now "works only for the City and County of Denver." However, Webb and Alexander came under fire last year when they cut a secret deal to sell the ski area to the WPRA for $53 million--ith the option to pay off the debt with a lump-sum payment of just $24.5 million. The ski area's own appraisers have estimated its value at $58 million, and critics of the deal say it could be worth more than twice that on the open market.
Alexander's relationship with the WPRA and its president, Gerald F. Groswold, dates back to the 1970s, when Alexander served as president of the First National Bank of Denver, the ski areaÕs longtime lender (First National is now known as First Interstate Bank). In 1979 Alexander personally approved a $7.5 million loan to the WPRA intended to finance new development at the ski area.
That same year, the city signed its controversial 100-year lease with the resort--controversial because it pays Denver only $7,000 per year while tying up the publicly owned land for a century. As parks manager, Alexander says his main goal is to increase the city's take to at least $2 million per year instead of the $7,000 figure. But in his past role as a lender, Alexander himself pushed for the long-term lease--a lopsided agreement that in 1992 paid the city less than one-tenth of one percent of the resort's total revenues.
"As far as I'm concerned, thereÕs no conflict at all," says Alexander of his former role with the WPRA. "When you're a lender, you want to have a long-term lease."
According to language in the lease, signed on April 13, 1979, the 100-year time frame was necessary so that the WPRA's lenders could safely commit to long-term financing. And shortly afterward, on May 1, 1979, $7.5 million in bonds were issued on behalf of the WPRA under the bonding authority of Grand County. Records on file in Grand County show that Alexander's bank was lender and trustee.
City auditor Bob Crider, whose office was not included in the city's initial negotiations, says he was unaware of Alexander's prior financial relationship with the WPRA until being contacted by a reporter. "It concerns me that it's all the same players," says Crider. "It may not be a conflict of interest, but it's certainly unusual."
Mayor Webb has his own ties to the WPRA, which, due to its status as an agent for the city, pays no income or property tax. Records on file at the city clerk's office show that Gerald Groswold was a contributor to Webb's 1991 mayoral campaign, as was the WPRA's attorney, Eugene L. Hohensee. WPRA treasurer Timothy P. McKeever and boardmember W. Scott Moore also helped finance the Webb campaign, and Webb has publically lauded the ski area's board chairman, Kermit L. Darkey, as a community leader.
The proposed sale agreed to by Webb and the WPRA was shot down last year by the city council, which refused to put the proposal on the November ballot. (All sales of city property must be approved by the voters.) But the Winter Park deal isn't dead.
Webb and Alexander recently reopened talks with the WPRA, and the mayor appointed a 24-member advisory committee, with Alexander as its co-chair, to help consider options for increasing the city's share of resort revenues. The city has been portrayed in recent media reports as having taken a new, hard-line approach toward the WPRA, in large part due to Alexander's announcement last month that Denver would withhold approval of a land swap the ski area had arranged with the U.S. Forest Service to further development at the resort.
However, on December 15, two days before the advisory committee's first meeting, Alexander met privately with WPRA chairman Darkey and the ski area's Denver lobbyist, David Greenberg. The purpose of the meeting, says Alexander, was to personally deliver a letter to Darkey informing him that the city would not approve the land swap. At that time, says Alexander, Darkey requested "as a courtesy" a second meeting between the two sides at which the legal issues surrounding the city's decision could be discussed before any announcement was made to the public. Alexander says he later decided that it "was not proper" to hold such a meeting without the knowledge of the advisory committee, and so refused Darkey's request.
But according to a confidential memo Gerald Groswold sent to his board of trustees on December 17, Alexander did more than deliver a letter during the December 15 meeting with Darkey and Greenberg. Far from refraining from any activity that might affect his own advisory committee, says the memo, Alexander reached a specific agreement with Darkey to remove any discussion about the land swap from the new committee's first agenda. In addition, says the memo, the meeting "caused Bruce to focus on how the meeting might proceed and what it might have as a final result."
The advisory committee, which includes five city councilmembers, was kept in the dark about the city's land swap decision until its second meeting on January 11.
Groswold's memo also offers further details as to how the ski area association--which acts as the cityÕs agent and is contractually bound to operate in Denver's best interest--has attempted to manipulate the public release of information about the deal.
In the document, Groswold, who is paid $194,000 per year to run the taxpayer-owned resort, told boardmembers--including former Rocky Mountain News chairman William W. Fletcher--that all contact with the press was to be "channeled" to either himself or WPRA spokeswoman Paula Sheridan "so as to maintain control." And referring to a WPRA letter sent to the mayor and city council in September 1993, he noted that "it appears to have been picked up by the newspapers as intended, and we can claim credit for a pro-active posture."
Several councilmembers were angered by that letter, in which the WPRA announced it would no longer respond to questions or suggestions from individual elected officials, asking instead that the city form a "unified negotiating team." When councilwoman Mary DeGroot sent Kermit Darkey a letter last December questioning the basis for the ski area's nonprofit status, the association ignored the request for a month, finally responding through attorney Eugene Hohensee just hours after a Westword reporter had inquired about the delay.
The memo from Groswold also asked boardmembers for any information they could provide on members of the mayor's advisory committee, noting that it was necessary to get the committee "started in the right direction." When presented with the memo in January, Webb publicly expressed anger at Groswold's comments, accusing the WPRA president of "trying to orchestrate the outcome" of his advisory process. But the mayor was notably silent on the memo's claim that Alexander was present at the secret December meeting and agreed to keep the land-swap decision under wraps.
And not all the WPRA's attempts at orchestrating the release of information have been handled skillfully. In an apparent mixup last December, the ski resort sent a copy of the inflammatory Groswold memo to one of its leading critics, Moffat Tunnel Commissioner Walter O. Cass. The Moffat Tunnel Commission is a key player in the Winter Park deal because it owns the land on which the ski resort's base facilities are located. It signed its own 98-year lease with the WPRA in 1980--an arrangement that Cass, who had not yet been elected at the time, has since questioned.
Cass has also said that he believes the WPRA's past contracts with the tunnel commission may be void because they usurp the commission's statutory authority in favor of the ski area--a contention that, if true, could turn the Winter Park deal on its head. And among the items in the Groswold memo inadvertently mailed to Cass was the fact that the WPRA had received a call in December from Grand County Attorney Jack DiCola, who also is doing legal work for the Moffat Tunnel Commission. The commission's attorney had called, Groswold wrote, to "warn us" that Cass was apparently about to evict the ski resort.
An angry Cass revealed the memo's contents at a public meeting of the commission on January 10, accusing DiCola of going behind his own client's back. However, in a heated exchange, DiCola informed Cass that the four other commissioners had instructed him to make the call--a fact the other commissioners then hesitantly confirmed.
One of the commissioners who instructed DiCola to warn the WPRA about Cass was Bruce E. Dines, a man who has his own past ties to the ski resort. Dines was a First National vice president under Bruce Alexander at the time the bank approved the 1979 loan to the ski resort. Alexander says Dines was not directly involved with the Winter Park loan. Dines, also a member of the Moffat Tunnel Commission at the time, says he doesn't want to discuss it.
However, records indicate that in his role as a tunnel commissioner, Dines voted to approve the commission's own 1980 lease agreement with the WPRA--a document that, like the city lease signed the year before, was drafted specifically to provide security for the ski area's lenders, presumably First National among them.
After leaving First National, Dines became a director of Colorado National Bank from 1988 to 1992. According to the Groswold memo, that institution also has loans outstanding with the WPRA. Dines has not abstained from commission votes regarding Winter Park. Last year the retired banker agreed to pay $655,000 in civil penalties over an alleged insider-trading scheme in which the federal Securities and Exchange Commission accused him of tipping off his brother Eugene about an impending merger with First Bank System of Minneapolis. Under a deal with the government, Dines and his brother neither admitted nor denied guilt.
Dines's old friend Bruce Alexander, meanwhile, says he intends to continue working "in the best interest of the city" in his dealings with the
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