Legal fight over Glendale land deal to continue, judge rules

A gravel company’s lawsuit against Glendale over a land deal along the Agua Fria River raises questions about whether the city favored a competing business, the judge overseeing the case stated this month.

After hearing the city’s arguments to dismiss Rare Earth LLC’s lawsuit, which alleges Glendale violated its procurement rules, Maricopa County Superior Court Judge Timothy Ryan denied the motion on April 19.

The decision clears the way for the case to proceed in court.

Rare Earth, a Glendale-based gravel and mining business, lost its bid to purchase the city’s property to its competitor, M.R. Tanner Construction.

In August 2022, the companies sought the nearly 48 acres of dry bed between Glendale Avenue and Bethany Home Road.

While soliciting bids, the city included a provision that required the winner to fill in a large hole and build berms at the site within a 90-day window. If needed, the city added, an extension could be authorized.

In its $4.75 million bid, the Gilbert-based M.R. Tanner stated that finishing the work in 90 days was unreasonable.

Rare Earth had submitted a $2 million bid — a low offer, the company has recognized, because making such improvements in 90 days is expensive and increases costs.

The city accepted M.R. Tanner’s offer, later stipulating in the sale and purchase agreement that a 240-day extension could be granted for site improvements.

Why did Rare Earth file its lawsuit?

Rare Earth challenged the city’s procurement process and questioned whether both companies played under the same rules. It relied on emails obtained from the city to accuse Glendale of altering the terms of the process so M.R. Tanner would become the favored bidder.

The company has turned to the court, asking it to force a new bidding process.

Glendale and M.R. Tanner have contested Rare Earth’s claims, denying any collusion between the two.

As part of its motion to dismiss the lawsuit, the city argued that it followed its municipal code and “was not arbitrary and capricious” when it awarded the sale to M.R. Tanner.

It also argued that Rare Earth didn’t follow city procedure when protesting the awarded sale.

Glendale gives an aggrieved bidder seven days to file a formal objection. After exhausting all available remedies to object to an award, a company can file a lawsuit, the city argues.

The city told Rare Earth it was going with M.R. Tanner on Nov. 28, 2022. Rare Earth filed its complaint with Maricopa County Superior Court 364 days later.

Rare Earth noted in its complaint that during that time, it had sought information about the sale and in July had requested public records, such as emails between Glendale and M.R. Tanner.

However, the city’s delayed response in completing the request prompted Rare Earth to file a separate complaint with the court in early September.

One of the documents Rare Earth received after taking the matter to court was the final draft of the city’s sale agreement with M.R. Tanner.

“It appears the contract terms are different from the bid,” Rare Earth stated in the lawsuit, referring to the 240-day extension M.R. Tanner was granted.

As for the city’s records Rare Earth sought, those were provided to the company around mid-November. Among them were emails between city management and representatives of M.R. Tanner that gave the appearance of favoritism, according to the lawsuit.

Those emails, Rare Earth claims, show that M.R. Tanner submitted a bid despite knowing it couldn’t complete the site improvements within 90 days.

Rare Earth has also argued that had it known it could’ve gotten more time to fill in the hole and construct the berm, it would have offered more than $4.75 million.

The city’s motion to dismiss the case contended that while M.R. Tanner’s bid noted the company’s inability to complete the work in 90 days, it included plans to do so, as well as a schedule that exceeded the 90-day timeframe.

M.R. Tanner echoed the argument, noting that it had requested the extension, while Rare Earth “failed to do so.”

What has judge said about Glendale’s, M.R. Tanner’s arguments?

In his decision denying the dismissal, Ryan essentially found that Rare Earth’s claims have merit.

M.R. Tanner’s “bid response raises serious concerns about the transparency of the process,” the judge wrote. “There is a serious question of fact as to whether the City of Glendale unfairly favored co-defendant Tanner.”

Also, the city didn’t comply with its obligations on public records requests, Ryan stated. And in terms of asking to dismiss the case, the city’s argument that Rare Earth had failed to exhaust the available remedies was “not well taken.”

Based on what he’s heard so far, Ryan stated that making Rare Earth go through the administrative remedies “would have been premature and assuredly denied.”

The city’s arguments, Ryan added, didn’t jibe with Rare Earth’s “actual facts.”

“One is entitled to their own set of opinions, but not their own set of facts,” he stated.

A status conference hearing was scheduled in the case for 8:30 a.m. May 2.

Shawn Raymundo covers the West Valley cities of Glendale, Peoria and Surprise. Reach him at sraymundo@gannett.com or follow him on X @ShawnzyTsunami.

This article originally appeared on Arizona Republic: Rare Earth lawsuit over Glendale land deal to continue, judge rules