Almanac

Viewpoint - April 30, 2008

Editorial: $8 million for gym, with strings

The disclosure last week that an anonymous donor has offered the city of Menlo Park $8 million or more toward building a new gym — provided he or she can choose the contractor and help manage the project — is an interesting proposition, but one that is loaded with potential pitfalls.

Certainly the city should do everything it can to take advantage of this generous offer. But at the same time, there should be a full-court press to bring the donor's name into the open, due to the serious questions raised by turning over a substantial portion of the city's business to an anonymous person whose motives are completely unknown.

In his description of the offer disclosed in a staff report last week, senior engineer Larry Johmann said the donor would have an "active role" in managing construction, including choosing the construction contractor. "The donor has a successful history of philanthropic endeavors in the region," Mr. Johmann said.

Despite City Attorney Bill McClure's belief that the city could work with such a donor without revealing his or her identity, experts on the state's Public Records Act say there is simply no exemption in the act that would enable the city to protect the donor's identity if there is a contract between the city and the donor. All such city contracts are public record.

In addition, if the donor pulled out of the contract for any reason, the city could find itself on the hook to build a gym, even if it did not have the resources to do so.

Even if, as some have speculated, the city sets up two entities, — one between the donor and the contractor and the other between the contractor and the city — there are plenty of pitfalls that could prove concerning later in the process. For example:

CharStyle:bullet>n The donor has made very clear which of three gym plans he or she will support, and how much money the city will need to contribute. In the design that appears to fit the donor's criteria, the city would pay just $6.2 million of the gym's $14.2 million total cost. The donor promises to pay the rest, some $8 million or more, depending on cost overruns. But unless some contractual tricks are used, we cannot see how the city can enter a relationship with a contractor without making the donor's name public.

• All members of the City Council know the donor's identity, and if that name was communicated in any way, it is public record. Also, could the council keep such a secret for a year or more?

• The donor could have a secret motive — such as seeking city approval for a large construction project of his or her own — that would be revealed only after the gym project was completed. By contributing such a large sum to build a city project, the donor could be likely to receive favored treatment from a grateful City Council.

There has to be some middle ground here. We believe the city should challenge the potential donor to go public now with this magnificent gift. By making the offer contingent on the donor remaining anonymous until the project is completed has to raise questions about the person's motives. What will change after the new gym is completed?

Comments

Posted by truth, a resident of Menlo Park: Belle Haven
on May 2, 2008 at 5:35 pm

Tom:

I did not hear the absolute position that the name of the donor was witheld throughout the entire project. I only heard it was held until there is a contract. Is that not true?


Posted by R.GORDON, a resident of another community
on May 4, 2008 at 2:46 pm

R.GORDON is a registered user.

It is most likely that the contractor has already been chosen and is not from San Mateo County which could create some questions about "a gift horse" and why so many of our rich "philanthopists" are choosing to go outside the area, like San Jose. One would think, that since they have different building codes, it would make it a lengthy process in the construction.


Posted by Joanna, a resident of Menlo Park: Downtown
on May 4, 2008 at 3:42 pm

Dear Sir,

Agreed. Under no circumstance should the identity of the donor be withheld and/or concealed.

The fact that this is a high stakes transaction is irrelevant. Even small deals should be transparent.

Why?

This is a public government. This is not a private corporation but a public one.

Your other points are extremely valid but when we strip everything away, this is a public matter and because of that singular fact, the donor's identity should be disclosed.

If any elected official fights for this on our behalf then he/she should be thanked for doing his/her job.

Thanks for your editorial.


Posted by J, a resident of Menlo Park: Fair Oaks
on May 5, 2008 at 9:32 am

I think it is okay for a donor to remain anonymous IF and only IF the city takes the money and uses it the same way they should for every process. A public RFP, multiple bidders, etc. It happens all the time on the up and up...this one sounds shady.


Posted by Truth be told, a resident of Menlo Park: Sharon Heights
on May 7, 2008 at 11:52 am

The anonymous gift by the person who wants to anonymously control construction of Menlo Park's proposed gym has the fingerprints of John Arrillaga all over it. He's been constructing and renovating buildings at Stanford for more than a decade, including just about everything associated with athletics.

He built the new stadium, as well as a gym that bears his family's name. Unbelievably, the gym was built without locker rooms and showers! But not to worry -- he simply wiped out part of a grove of oaks to add showers to another building nearby. This gym also was built without adequate ventilation -- but he came back with new fans. The athletics department offices are in yet another building that bears his name -- this one around a basketball court that was, alas, built too short.

If behooves the Menlo Park City Council to keep a close eye on their anonymous donor if he is John Arrillaga (or anyone else). There are reasons for public accountability laws!


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