Two separate complaints were recently filed against Federal Way Mayor Jim Ferrell’s Chief of Staff, Brian Wilson.
The first was an allegation by former Planning and Community Development Director Michael Morales that Wilson forged Morales’ signature on a city document favorable to Weyerhaeuser and potential purchasers of the former Weyerhaeuser property. The second complaint was filed by Laurie Brown, a citizen who lives in the area affected by the sale of the property. She raised concerns that Wilson had violated the city’s Ethics Code during his representation of Ferrell and the city in the purchase of the Weyerhaeuser property by Industrial Realty Group (IRG) through Weyerhaeuser’s real estate representative, Heartland LLC. Alexander Baehr of Summit Law Group investigated both complaints.
Baehr’s determination was that he could find “no credible evidence to support the claim of forgery.” Brown had alleged that Wilson accepted gifts such as drinks, had been offered trips to resorts, and had given gifts of wine to Jim Reinhardsen, an owner and the managing director of Heartland. Baehr did not sustain those charges either in the narrowly-focused investigations.
With the aid of both the investigation reports and with city documents obtained under Washington’s Public Records Act, we now know a lot more about what appears to be the cozy relationship between Wilson and Reinhardsen. It may serve as an example of what city staff should avoid and what residents should question.
However, the bigger public policy question to consider is this: Who has Ferrell’s top assistant been representing over the last two years of the Weyerhaeuser property issue? Many citizens believe it wasn’t them and that the city was in over its head when negotiating with big corporations. Against a backdrop of bonding over a common goal, something that resulted in celebratory drinks at fancy restaurants and gifts of wine from Wilson to Reinhardsen, the line between regulators and the regulated appears to have become blurry.
That’s not to say Wilson or Ferrell did anything illegal or even violated the city’s Ethics Code. It doesn’t appear that they did. But for many residents of the area, and possibly for the public at large, there is a perception that the relationship was cozier than appropriate.
In August 2014, when Weyerhaeuser announced that the property was up for sale, the city missed a key opening by not hiring outside assistance for legal, planning and historical land issues. Information from these specific specialists could have been used to advise Weyerhaeuser that any buyer should be aware that the city considered the property of unique character and of local historic importance. They also could have made clear that the city would expect a master site plan from any new owners, one that reflected the property’s special relationship to the community as the city’s environmental and economic face now and in the future. The city did not take that important step. Rather, they let events overtake them, and the property was purchased by California-based IRG.
Rather than seek trained professionals, Ferrell made the decision to handle the issue in-house with Wilson, the former police chief, as the project lead. Weyerhaeuser and Heartland, along with IRG, logically took positions that were in their best interests. They felt the 1994 concomitant agreement, a contract adding restrictions and special regulations for the property to join Federal Way, gave them significant rights that likely wouldn’t be permitted two decades later. Other sources say that, while the concomitant agreement did have notable legal standing, the city had significant leverage under its land-use police powers and its regulatory authority to influence the original group of interested buyers. A more seasoned approach may have provided a different buyer with ideas closer to those of the residents. But even after the sale to IRG, the city seemed to view their relationship with IRG and Heartland as a partnership, rather than as the legal land use authority with regulatory responsibility over the property on behalf of the public trust.
An example is the presentation that IRG’s Tom Messmer made to a meeting of community leaders on June 22, where he said his company had no concrete plans for the property yet and hinted that the business IRG was looking to attract to the property might be high-tech. But IRG had already put in a pre-application for a fish warehouse in May, which was followed by the design drawings. Both Wilson and Ferrell were in attendance at the meeting.
After the public learned of the warehouse and expressed its displeasure, Ferrell said it was not the city’s responsibility to announce every project that came into the city for review. He’s right, but residents felt, in this case with this property, the impact was large enough to warrant full disclosure. Messmer’s lack of candor should have been a warning to city leaders about how this matter might play out. In hindsight, it also gave the public a hint of how the city viewed its relationship with IRG.
When Ferrell did make an announcement it seemed to be one of ownership. He called the project a “positive development.”
Many residents disagreed. They opposed the project and began looking closer at the property’s history and the city’s available application processes for information they could use to challenge IRG’s plans. Residents were disheartened to learn the city had chosen the more developer-friendly Process III for the application, the process preferred by Weyerhaeuser, IRG and Heartland, rather than the more citizen-friendly Process IV. Citizen appeals would be much harder under Process III. Both Ferrell and Wilson said Planning Codes determine which process is used. The acting city attorney agreed, but he also included the concomitant agreement.
Baehr’s investigation of Brown’s complaint, however, states, “The city’s decision as stated in Chief of Staff Wilson’s June 6th, 2016 email, was an effort to balance the requirements of the 1992 FWC, as amended by 1994 CA [ ] against current law.” Baehr further says the “clearly competing and sometimes conflicting provisions existed in the three mandates (1992FWC as amended by 1994CA and current Federal Way code).” This would leave the interpretation unclear, but Baehr then gives considerable weight to Wilson’s discretion to explain Wilson’s actions within the email, saying Wilson “was rightfully within his discretionary ambit authority.”
In that June 6 email, Wilson offered Jack McCullough, an attorney for the developer, that the city use Process III in exchange for a promise that Weyerhaeuser would provide legal assistance against any lawsuit. The group most likely to file a lawsuit under those circumstances would be the citizens of Federal Way, which are whom the city is supposed to protect and represent.
However, if city codes or the concomitant agreement actually did dictate which process should be used, as opposed to Wilson’s discretion, the request for legal support from the developer would have been unnecessary – raising questions as to why it’s included in Wilson’s communication. However, if there was the discretion seemingly embodied in the offer to McCullough then it should have been exercised under the trained, experienced guidance of the planning director and the city attorney, not Wilson. Brown’s allegation of a conflict of interest by Wilson does not hold, but the appearance of a “deal” for Process III negates any level of confidence that residents might have had if the process were chosen by law as the city stated.
While the allegation that Wilson had forged Morales’ signature on a city document containing language favorable to Weyerhaeuser may have been politically titillating in local coffee shops, the issue of greater concern is that the document was prepared by staff from Weyerhaeuser’s real estate firm, Heartland, at Wilson’s request. In Baehr’s report, he says Wilson suggested Heartland prepare the letter because “Heartland was in direct communication with the buyers (and therefore knew their needs).” The needs of the public, not the buyers, should have been Wilson’s primary concern. Letters of this nature are critical to land use management and are typically prepared by the planning director with input from the city attorney. Wilson had a Heartland staff member send the draft to his personal email address and he worked on it at home, suggesting a purposeful desire for secrecy. He should have used the city system. Without Brown’s complaint and without Public Disclosure laws, we may never have known who originally authored that letter. All city documents are to be produced on city equipment for exactly this reason. If Wilson was concerned about any legal need for privacy than there was all the more reason to have trained city staff produce the letter.
Morales says most Planning Directors would never sign a letter of that nature unless they had prepared it. He’s correct.
The acting city attorney says it’s common to respond to developer requests. “Responding,” however, is significantly different than having the developer, the one who receives the benefit, actually write a policy-interpretation letter articulating their own benefit and then having a city official sign it.
Under no circumstances should this action be appropriate.
Baehr found Wilson innocent of violating city ethics rules. Technically, that was the correct determination: Wilson says his drinks cost about $30, and Reinhardsen, who paid for the drinks, said it was $30-40. Either estimation is below the $50 limit the city uses as the allowable threshold in the Ethics Code. Since Baehr didn’t include a receipt in his investigation report, of course, we don’t know the exact or actual amount. Wilson says he never took the offered trips, and Baehr asserts the property transaction had closed so there was no evidence of quid pro quo.
It should be noted that Baehr’s firm, Summit Law Group, has a good reputation. However, not only did the city have both investigations done by the same firm rather than seek a more independent view from a different firm, but Baehr’s firm is also under contract by the city not to exceed $100,000 to conduct labor negotiations. The appearance should have given pause.
The investigator raises a question in his report by noting that Wilson and Reinhardsen’s “professional/peer relationship had developed,” but the investigator never explores that relationship due to the narrow focus of the investigation. The appearance might be of concern to an objective reviewer, however, because the code also specifically cautions against activities “which have the potential to create a conflict” of interest. Once Wilson asked the beneficiary, Heartland, to prepare the letter for Morales’ signature, that “potential” existed.
The drinks, while allowable, are illustrative in demonstrating how the line separating regulator and developer had become blurred over the previous 18 months. Reinhardsen invited Wilson to meet for drinks in downtown Seattle to celebrate, writing, “Thanks for taking the time to celebrate the campus sale… and our relationship.” Reinhardsen further writes about the completion of a “major investment in your City today in large part due to the great partnership we have had in this effort,” going on to thank Wilson for “his collaboration and friendship.” Wilson acknowledged the strength of the relationship by giving Reinhardsen two bottles of wine – reportedly valued at about $90 – and Reinhardsen writes, “I always enjoy discovering new wineries, particularly those enjoyed by friends.”
The entire scenario is improper for Wilson – not illegal, but improper. He represents the city and its taxpayers; he should not be drinking or celebrating with Reinhardsen under any circumstances, and he should never have allowed Reinhardsen to pay for anything, no matter how small.
Whose interests were Ferrell and Wilson looking out for? Ferrell gave Wilson a shocking level of latitude and authority, and Wilson, who is not trained in the relevant disciplines, has led him into a political quagmire. Ferrell greeted the fish warehouse as a “positive development,” and it appears that he and Wilson were so blinded by wanting anything on that property prior to next year’s election cycle that they had no feel for how the residents would react.
Did no one see a problem with letting Heartland write the policy-interpretation letter? No private developer should ever be allowed to write a letter for the signature of a regulatory official, but it was not only allowed, it was requested by Wilson. Having the legal department review the already-drafted letter does not cure the error – Wilson outranks the city attorney.
Questions and concerns abound. Why hasn’t the City Council taken an independent look at how this situation got so far out of hand? The current language of the Ethics Code is overly broad and in need of review. How was the choice between Process III and IV really made? The city says one thing, but documents suggest another. And why hasn’t the Council moved to reclaim authority over quasi-judicial matters?
And lastly, could there be another reason Wilson wanted Morales fired?
Federal Way resident Bob Roegner is the former mayor of Auburn. He can be reached at firstname.lastname@example.org.