A failed plan to help lure a new economic development director to Mesa with donations from local developers will end up costing city taxpayers roughly $65,000.
William Jabjiniak, who started working for the city Oct. 1, will receive about 10 percent of the $650,000 value of the home he owns in Richmond, Va., as part of a relocation package he negotiated, city documents show.
Originally, the East Valley Partnership, a local business consortium, tapped area developers and business groups to help pay for the bulk of the relocation package — a one-time perk worth about 45 percent of Jabjiniak’s $142,400 annual base salary.
By late September, the deal became public and questions arose about potential conflicts of interest presented by Jabjiniak’s receiving part of his compensation package from businesses over which he would have influence.
The East Valley Partnership backed away from its pledge to subsidize the relocation package, leaving Mesa with a bill that City Manager Chris Brady at the time said the city couldn’t afford.
Jabjiniak already had turned down a competing offer when the deal fell apart, so Mesa officials agreed to honor the arrangement, city officials said.
How much the city was on the hook for wasn’t clear until Mesa recently released documents and e-mail related to the agreement in response to a public records request.
“It was not something the city had ever done before. It was unusual,” assistant city manager Debra Dollar said. “Because of the commitment we had made to Bill, we felt like we had to support the offer.”
City officials said the relocation package will be paid for with salary savings reaped from a two-year vacancy in the economic development director position prior to Jabjiniak’s hiring.
The package paid for his move from the East Coast and also will cover broker’s fees and closing costs on his home when it is sold.
If Jabjiniak decides to quit his Mesa job before he has worked 18 months, he would be responsible for repaying the cost of the relocation package.
Jabjiniak also reaps a tax advantage from the arrangement, Dollar said. The contract with a Prudential real estate agency in Connecticut handling his relocation shows closing costs on the home would not be considered taxable income.
The home has not yet sold, Jabjiniak said, but he did not answer other questions Friday related to the deal.
In recent years, Mesa has struggled to pay for basic city services with a $1 billion budget.
Over the next 18 months, the city is looking at a $12 million deficit, as consumer spending continues to drop and the city’s sales tax revenue comes in lower than expected.
City spokesman Steve Wright said Jabjiniak’s bargaining would not create an expectation that other incoming city executives will receive a relocation package worth thousands of dollars.
The city has struggled to fill its top economic development spot, designed to lure companies to Mesa and expand existing businesses, because the city has been battling the private sector for potential candidates.
“I think that the city manager deals with these things on a case-by-case basis,” Wright said. “This was a critical, critical position.”
Based on e-mail released by the city, the relocation deal had been made directly between Jabjiniak and the business groups he now works with in Mesa before it fell apart.
Roc Arnett, president of the East Valley Partnership, expressed the business community’s support for him in one e-mail.
“I enjoyed talking with you this afternoon about the private sector support for your move to Mesa,” Arnett wrote Jabjiniak, adding that he had managed to raise $40,000 to help with the move.
Another e-mail shows the East Valley Partnership had agreed to act as client to the real estate company in charge of selling Jabjiniak’s home.
Now, the client is Mesa. Dollar said one of the arrangement’s risks is that the city could end up owning Jabjiniak’s home if an approved purchase were to fall through at the last minute.
She said research into similar deals revealed only one instance where a city had to assume ownership of a home, and it happened because the bank financing the purchase went out of business.
“We’re pretty much guaranteed, in my opinion,” Dollar said.