Report finds Wasilla administrators and mayor acted 'inappropriately' in development deal

Michael Rovito/Frontiersman

Wasilla city administrators and the city’s mayor, Dianne Keller, acted inappropriately in the development of two parcels adjacent to the Parks Highway, an independent law firm reported today.

The report, by Denali Law Group, goes as far as saying some behavior by city employees violates criminal statutes, although the group does not expect anyone to be prosecuted.

Denali Law Group was hired by the Wasilla City Council to probe relationships between city administrators and Meritage Development Group LLC., the company looking to develop the parcels near Sportsman’s Warehouse into Creekside Town Square retail park.

Wasilla City Councilman Steve Menard asked council to approve the investigation after learning of a letter sent to businesses refusing to cooperate with the city. Those letters, according to the report, amounted to “attempted coercion.”

“The issue that eclipses all other concerns and complaints involves the use of a feigned threat of eminent domain sent by Mayor Dianne Keller on Aug. 24, 2007 to the property owners affected by the Hermon Road traffic circulation plan,” the report says.

Keller was out of the office Tuesday and unavailable for comment. Attempts to reach Meritage representatives were unsuccessful.

Keller’s April letter addressed the city's need to realign East Sun Mountain Avenue and its intersection with Herman Road. The city contends the realignment is needed to make an off-highway traffic corridor, the report states. The letter also says the reroute will most likely bisect portions of properties along the corridor.

Keller does not mince words in her letter.

“We are confident that you are aware we are well within our purview to pursue more aggressive means for this public purpose,” Keller wrote, alluding to the use of eminent domain.

During the project’s initial stages, the city said it would only support the plan if “100 percent of the property owners on any one segment are in agreement with the plan.”

After some business owners began resisting the city’s plan, Keller’s letter started appearing.

Menard said Denali Law Group’s findings are what he expected.

Speaking from his cell phone Tuesday, Menard said he’s asked the Wasilla city clerk to get in touch with the city attorney to find out what sort of action the council can take. Menard said a vote of no confidence or reprimands are possible.“The mayor should be absolutely ashamed and embarrassed,” Menard said.

He added his concerns initially rose after Windbreak Cafe owner Bob Andres called to express concern over a letter he received from Keller containing warnings of the use of aggresive means. Andres refused to cooperate with plans for an easement through his property before receiving that letter, Menard said.

Andres said Tuesday he hasn’t heard anything from the city since the investigation began. He said he’d like to read the entire report before commenting.

For Menard, Keller’s involvement in pushing for cooperation from business owners has a historical significance.

“I believe she was looking for a legacy project,” Menard said.

The Frontiersman will follow this story as it develops.

Contact Michael Rovito at 352-2252 or michael.rovito@frontiersman.com.