Chamber pressure: Breakup over contract violations means end to ‘social club’

If you love something, set it free.

That’s how the adage goes, and the city learned it well, abruptly terminating its contract with the Maricopa Chamber of Commerce in December.

“It’s time for us to step back,” says one city councilmember. Says another: “We’re letting them take a great step forward and do this on their own.”

By all accounts, it seems like an amicable breakup. The city is growing quickly; the government, rightly, is disentangling itself from private business affairs. With a goodbye kiss and a “bon voyage,” the city pushes the fledgling chamber from the nest to test its wings for the first time.

But a closer look at the facts reveals the chamber was mired in accusations of breaching a contract that, ironically, it inked despite violating its own bylaws. Now, without the city’s hand to hold, the cash-poor chamber faces the specter of homelessness by year’s end.

In losing its lease with the city, however, the chamber might just find a new lease on success.

The chamber’s debutant leadership team sees the breakup as an opportunity to reconcile years of shoddy reputation as a “social club” and usher in an era where business, not brunch, takes center stage.

The city never told the chamber which terms of the contract it violated — in spite of the chamber’s pleadings to know why. But conversations with chamber leaders paint a different picture, one in which the chamber knowingly flouted the terms of its lease.

Very few at City Hall are willing to acknowledge where things went wrong. Setting the chamber free, they say, is indeed an act of love. Just as the adage goes.

LEASE OFFERING

It was less than 18 months ago the city and chamber of commerce signed a three-year sublease contract allowing the chamber to rent a space in the Estrella Gin Business Park for just $200 per month.

Market rate for the 500-square-foot space starts at $16,000 per year, about seven times the rate the chamber paid, according to realtors representing the office complex at West Edison Road and North Estrella Parkway.

Every chamber board member and director at the time the contract was signed has since resigned. Now, less than halfway through the contract term, the city squashed the deal.

The seven-page contract specifies a dozen services the chamber must provide the city in exchange for near-free rent. A cursory review of the facts suggests the chamber did not fulfill nine of the 12 conditions.

Assistant City Manager Jennifer Brown told then-chamber President Antonia Présumé Dec. 12 “several conditions outlined in the agreement have not been met” in a letter obtained by InMaricopa through a Freedom of Information Act request.

Présumé’s term expired days later.

CONDITIONAL LOVE

When asked directly, Brown did not answer which terms of the contract the chamber violated.

City Councilmember Rich Vitiello said “there were a few things they didn’t follow,” but also declined to elaborate. Councilmember Eric Goettl spoke glowingly about the chamber but didn’t answer questions about the contract violations, as did the city’s spokesperson, Monica Williams.

Mayor Nancy Smith and three other councilmembers declined to comment altogether.

Only Councilmember Vincent Manfredi answered the question, saying there were “shortcomings of the chamber in fulfilling their agreed obligations” and that “several key requirements set by the city have not been met,” which he later detailed.

Many are obvious. The chamber was contractually obligated to provide quarterly business reports — city records clerk Andy Juarez confirmed no such report was ever tendered.

It goes deeper.

“The annual survey, which is crucial for business retention analysis and was a stipulated part of their agreement, has not been completed,” Manfredi said. “Furthermore, the business plan that we requested has not been presented, and there seems to be a lack of engagement with the city council as evidenced by the absence of joint meetings or participation in city planning sessions.”

The contract required the chamber to appoint a city councilmember to its board of directors.

It did not.

“The chamber has failed to adequately maintain the business registry established and provided by the city,” Manfredi continued. “Additionally their services for facilitating groundbreakings and ribbon-cutting ceremonies have been limited exclusively to their members, despite expectations that they would handle such events more inclusively of all new businesses.”

Under the contract, the chamber was required to maintain a registry “to include all businesses in Maricopa,” according to a September email exchange between the chamber and City Manager Rick Horst.

A majority of businesses in the city do not appear on the registry, as it is limited only to dues-paying members — which pay $400 to $5,000 annually.

Bashas’, Fry’s Marketplace, Sprouts, Walmart and most of the other brick-and-mortar businesses in town are not listed. It begs the question of how and when the registry could be useful, and to whom.

The chamber was also required to facilitate ribbon-cutting ceremonies at “all new businesses” but wouldn’t acknowledge new businesses until they pledged membership. That led to some awkward timing, like when the chamber held a grand opening ceremony at Thai Chili 2go on John Wayne Parkway late last month, seven months after opening.

LET BYLAWS BE BYLAWS

The chamber’s new executive director, Kelly Anderson, said the business registry requirement was “concerning” because it would “violate our bylaws.” Her predecessors signed the contract knowing the terms would be impossible to fulfill.

Anderson doesn’t believe much of the contract was enforceable.

“In my opinion, the items in the lease should have been presented and signed in a service agreement, not a lease agreement,” she said. “And it doesn’t matter. It really doesn’t matter.”

The chamber doesn’t want to operate anymore under the city’s “intense level of scrutiny,” Anderson said. Likewise, the city doesn’t want to monitor another organization’s performance standards and business processes.

The city “did not close the door on a future rental permit,” Anderson noted. Of course not — anyone can rent that space, and the city made it clear the chamber gets no special treatment whatsoever after the contract ends later this year.

“Be prepared to pay the full market rate for the space,” Brown warned in her December letter. She mentioned the city might also use the space for itself and take it off the market or lease it to someone else at a higher rate.

Manfredi agreed the city “should transition to a market-rate lease,” he said. And Vitiello added, “The rent is going up. There’s no reason it shouldn’t.”

That spells trouble for the chamber, which is cash poor and needs to recruit a large number of new members to afford a space to meet, Anderson said.

Asked if the chamber was able to pay market rate, Anderson said, “No, we’re not.” The part-time real estate agent quipped about meeting at her office or home next year if necessary.

OFFICE SPACE

This isn’t the first time the chamber has faced potential homelessness.

In 2018, the chamber couldn’t afford to renew a lease at its office on Honeycutt Road and then-President Chris Cahall suggested closing for good during a meeting that, it turned out, wasn’t allowed to be held under the chamber’s bylaws. Instead, it continued to operate “virtually” until it started meeting at Anderson’s office. It met there, at the office of its future executive director, until the city extended an olive branch in the form of the contract it just terminated.

To recruit new members, the current chamber needs to erase its reputation as a “social club” that “doesn’t do anything,” said President Isaac Jackson, who stepped into the role last month. Jackson, who owns a carpet cleaning company, is a bona fide businessman with experience across many industries.

He replaces Présumé, who sold crafts out of her house. Her business has no working website, no physical address, no business email address nor phone number.

Anderson is a breath of fresh air for the chamber, too. She’s a prominent local realtor and co-owner of a real estate firm with deep ties to the community.

JOB INSECURITY

The chamber’s first executive director, Terri Crain, resigned along with most of the board of directors after she violated chamber bylaws by hiring her boyfriend as an executive assistant.

The next director, Jim McMichael, was forced to resign by the board after six months. He was followed by John Kennedy, who lasted two months until he was arrested on charges of stalking and burglary.

Four more directors and three years later, the chamber hired 20-year-old recent high school graduate Sara Troyer, who had no business experience. Her hiring caused the chamber to become the defendant in an exhaustive lawsuit, which it eventually won.

Then, the board rehired Crain.

The chamber operated with no executive director for nearly one-fourth of its existence due to lapses in leadership.

For Anderson, it’s, “New year, new chamber.”

POISED FOR SUCCESS?

Maricopa City Council and the freshly minted board of directors are convinced Anderson will break the cycle.

“I can tell you with confidence that they didn’t have anybody like her in that position [before],” Jackson said. “A lot of directors that came in, they just didn’t know the role that well. And for somebody to understand that role, and come in and actually build, their longevity is going to be because of her.”

It’s an uphill battle, but Jackson said “it’s a miracle” the chamber has come as far as it has. He’s got the support of all around him.

“We applaud the efforts of the chamber to support businesses in the city of Maricopa and are thankful to have played a part in setting the stage for their success,” the city’s Brown said in a statement to InMaricopa. “We look forward to seeing the chamber as a self-sustaining and thriving organization within our community.”

For the first time in its 14-year history, the chamber wrote a mission statement, vision and core values under its new leadership. This year, it plans to create maps and a member directory, launch a youth mentorship program, clean up finance reporting, create a strategic plan and much more.

In December, the chamber launched Taste of Copa, a discount food tour reminiscent of those in Scottsdale and Phoenix. That was open to all restaurants, not just members. It’s also promised to start allowing the press to cover chamber events, something Présumé didn’t allow without paying a fee.

Last year, the chamber welcomed 55 new members, netting nearly $40,000 in revenue. Its annual gala made about $25,000. It revamped its website, joined the statewide Arizona Chamber Executives network and received a training scholarship, among other new accomplishments.

“In recent months, I have been delighted to see the vision, planning and direction Executive Director Kelly Anderson and their new board of directors have established and are beginning to implement,” Councilmember Goettl told InMaricopa. “The city has encouraged and supported the chamber for a number of years now. It is time for us to step back and allow them to succeed without government telling them what they need to do and how to do it.”

Even Manfredi, perhaps the most skeptical at City Hall, said, “Kelly Anderson is a promising new presence in the Chamber, and I believe she has the potential to excel as the director, provided she receives adequate support and autonomy from her board to implement necessary changes and improvements.“

For the chamber, there are no hard feelings. “No one in our boardroom is upset with the city,” Jackson stressed during his interview with InMaricopa.

The chamber even confirmed it will continue giving the city a platinum membership — worth $5,000 a year — for free, asking nothing in return. That was a stipulation in the contract, but the chamber will continue to honor it in good faith.

After all, if the city wasn’t a member, it would be a bad look.

Best not to let it get that far.

Editor’s note: Councilmember Vincent Manfredi is owner of InMaricopa.