How a City Contract Bid Opening was Faked

Nothing illegal, but two lost their jobs in a comedy of errors, miscommunication.

Sunday, July 25, 2004

By Frederic Pierce, Staff writer

Channel 10 News' camera was rolling May 3 when Syracuse city officials ceremoniously opened the sealed bids submitted by developers interested in bringing the long-vacant Mizpah Towers building back to life.

A veteran city purchasing employee went through the two proposals page by page, noting required items.

When he was done, former city Economic Development Director Bart Feinberg announced that a decision would be made within 90 days.

The public procedure was done by the book, except for one thing.

It was a sham.

The proposals, both of which had arrived unsealed, had been packaged and treated as if they were sealed bids, city officials now say.

The charade was held to satisfy media interests based on an inaccurate newspaper advertisement by the city. "It was staged," City Operations Director Charles Everett said.

No criminal wrongdoing has been alleged in the city's mishandling of the Mizpah proposals to develop the former church on Columbus Circle.

It did, however, cost two top City Hall officials their jobs, sent both interested developers back into limbo and guaranteed there will be no redevelopment of the historic structure unless it survives another winter.

The incident created a blizzard of internal finger-pointing and launched an independent city audit that has bogged down over disagreement about what the city auditor is authorized to do.

"There's enough blame to go around," City Auditor Phil LaTessa said. "I, as city auditor, am never going to know exactly what happened. Nobody's going to know because it's become a he-said, she- said kind of thing."

The one thing everyone seems to agree on is that the bid opening shown on Time-Warner's cable news channel and broadcast over radio station WSYR was a fake.

City administrators said Feinberg and former Budget Director Ann Rooney are responsible for the staged opening, and said they later misled other city officials about the process and the nature of the responses.

Both Feinberg and Rooney, however, deny they were behind the false bid opening. They acknowledge that mistakes were made in the process, but said many of the city's allegations against them are false and said they did nothing to intentionally mislead anyone.

"I'm the one who told them that the bids had been repackaged," Rooney said. "If they're so convinced that I was trying to hide this stuff, why would I tell them?"

Rooney and Feinberg said the staged event sprang from pressure by members of the administration - chiefly City Director of Intergovernmental Relations Christine Fix - to hold a media event.

The two Mizpah proposals were responses to letters sent directly to the developers; the responses were not to a newspaper ad that erroneously asked for sealed bids. A bid opening wasn't required and none was planned.

The incorrect ad, however, drew the attention of some members of the local news media, who asked to sit in on the opening. As far as city communications personnel knew, they were arranging coverage of a legitimate news event, Fix said.

"If they felt pressure, why didn't they say then and there that the ad was wrong and there were no sealed bids to open," Fix said of Feinberg and Rooney. "We didn't know anything was wrong."

Feinberg, ina written statement given to LaTessa, said he explained the situation to both Fix and Everett, but the opening was held anyway.

What Feinberg failed to tell them, Everett said, was that the proposals had already been flipped open and looked at as they came in, something that's usually not a problem with responses to city requests for development proposals.

But since the city had advertised the Mizpah project as a sealed bid, the law required it to follow that process, Everett said. That meant the process should have automatically been scrapped and begun again.

Rooney said she was contacted by Fix about an hour before the scheduled opening. Rooney said she called the city worker who normally opens bids and told him to go with Feinberg and "do what he usually does."

"That's all I told him," Rooney said. "In my mind, I was thinking Mizpah-RFP (request for proposals), and the talk of sealed bids didn't register. I was thinking of the deadline for getting proposals in."

Norman Mingolelli,the purchasing employee sent to handle the situation, told administration officials he felt he was doing what Rooney had directed him to do when he repackaged the opened proposals, put them in a box and then opened them for the news media, Everett said.

Feinberg admitted to LaTessa that he went along with the charade but did so out of frustration with changing rules and red tape that he felt were holding back what he viewed as a viable development proposal for Mizpah Towers.

New Salt City Ventures - a group spearheaded by Syracuse businessman Alan Isserlis - wanted to pursue a $19 million plan to turn Mizpah into a hotel. A local arm of the Wesleyan Church, meanwhile, proposed a $10 million plan to use it as both a church and a social service center.

"At the time, I should have just said no," Feinberg told LaTessa of the bid opening. "But the whole process was a complete comedy of errors, and I just wanted to be able to move on the review of the RFPs since we were not going to be awarding a bid."

LaTessa plans to complete his audit sometime next week.

Mingolelli wasnot punished for his role, mainly because city officials believed he was acting on Rooney's orders, Everett said. Everett acknowledged that no one knows exactly what Rooney told Mingolelli, but said she and Feinberg were responsible for other problems that occurred well before the bid opening.

Things started to go wrong in January, when administration officials said that Mayor Matt Driscoll made it clear in a meeting that he wanted potentially important, city-owned buildings like Mizpah, the Sibley's garage and the Dey Brothers building to follow the RFP process.

But Feinberg, who had been working to sell the property directly to New Salt City for more than a year, said Driscoll didn't make that clear to him until late March or early April. The RFP was issued April 6.

The RFP process is supposed to be handled by the city purchasing division, which Rooney oversees, Everett said. The Mizpah request was done primarily by Feinberg, with help from Rooney's staff, she said.

City officials said Mingolelli questioned Rooney about that decision, as well as her approval of Feinberg's request to shorten the response time to the RFP from six weeks to three weeks. They said Mingolelli also refused to approve the ad that eventually caused the problem, forcing Rooney to sign it herself.

Rooney, however, said she routinely signs all requests for ads - sometimes without having time to read them carefully - and that this was no different.

Feinberg said the draft ad he gave to a purchase division clerk was accurate.

As soon as the incorrect ads ran, the process should have been declared invalid, because potential developers could have been dissuaded by the sealed bid process, Everett said.

© 2004 The Post-Standard.