Before the governor fired him, an Iowa executive brokered a $17 million move now called 'wasteful'

Just weeks before she fired him, Gov. Kim Reynolds and other top Iowa officials approved state executive Dave Jamison's $17 million request to move the Iowa Finance Authority.

Newly released records and State Treasurer Michael Fitzgerald — the lone Democrat on the five-member board that approved the move — indicate the decision was made without board members being informed about a $6 million savings and a third-party recommendation that the agency stay put.

Now a former assistant attorney general and Democratic candidate for state auditor is calling for the Iowa Executive Council to reconsider the plan.

"This is an opportunity for good public servants to ensure that this decision is revisited, and that taxpayer money is not wasted," said Rob Sand, the former assistant attorney general who uncovered the information through a public records request.

The relocation calls for the authority to leave its state-owned office at 2015 Grand Ave. to enter a long-term lease for a building Hubbell Realty owns at 1963 Bell Ave.

Jamison, IFA’s recently fired director, had argued the move was necessary because of the current building’s poor condition and inability to meet the organization’s long-term needs.

But the newly released public records raise questions about the rationale and cost justifications behind the move.

In light of the new information, Fitzgerald is reviewing whether the group has the authority to rescind its decision.

"When I had the arguments presented to me, I thought it made sense,” said Fitzgerald, a member of the council who said he spoke directly with Jamison about the issue. “Now, I don’t know.”

In addition to Reynolds and Fitzgerald, the Iowa Executive Council in February included Iowa Secretary of Agriculture Bill Northey, State Auditor Mary Mosiman and Secretary of State Paul Pate.

The group is tasked with approving real estate transactions, including leases, for the state.

Third-party review

Jamison’s plan advocating for the relocation cited extensive building challenges, including electrical and asbestos issues.

He also said, “IFA has outgrown the current space,” according to documents he sent state officials a week before the Executive Council approved the move.

But a third-party review of the building shows the needed repairs at the authority’s current building are “minor,” according to Design Alliance of Waukee. Asbestos removal, for example, would cost a maximum of $21,000, according to the report that was paid for and conducted on behalf of the authority.

The review also determined the current location will meet the agency’s needs for the next 15 to 20 years, contradicting Jamison's assertions.

Public records show Design Alliance’s conclusion that “renovating the current building provides the best outcome” was stripped from multiple presentations to the IFA board and the Executive Council following a March 30, 2017, meeting with some IFA officials.

And a Feb. 6 side-by-side cost comparison by IFA Chief Financial Officer Cindy Harris showed the lease will cost $16.9 million, compared with $11 million to remain at its current location, was not provided to the Executive Council before its Feb. 12 vote, according to public records and Fitzgerald.

Jamison did not return calls for comment. He was fired March 24 by Reynolds, who cited “credible allegations of sexual harassment.”

“I believe that within the IFA were conscientious public employees who knew that this decision was bad and opposed it,” Sand said March 29, the day he requested records into the issue.

Two reviews show money saved

At the time of the Design Alliance review in 2017, the IFA did not have a location in mind for a lease option, said Robert Ridgway, a principal at the company.

The stay-put conclusion was stripped from the 2017 report in an effort to remain neutral and open to options, he said.

However, the general 2017 cost estimate from Design Alliance and the site-specific Feb. 6 cost analysis from Harris, the IFA’s finance officer, both project that money would be saved if the authority’s offices were to remain at their current location.

Ridgway told the Register he doesn’t remember any IFA official asking him to alter the conclusion of his report.

“They may have asked me to reword it in some way just because of the sensitivity of some of that, obviously,” Ridgway said.

Jeff Thompson, an assistant attorney general who often oversees the work of the Executive Council, declined to answer questions this week about whether the group might reconsider its Feb. 12 decision.

"I can't comment since we are counsel for the Executive Council," Thompson said.

Too late?

Fitzgerald missed the Feb. 12 meeting but told the Register he would have voted for the measure based on what Jamison told him before the meeting.

The four other members voted in favor of the move. They did not immediately return calls seeking comment on their vote.

The council Feb. 12 approved the move and a 124-month lease for the 43,411-square-foot building.

IFA was created more than 40 years ago to assist efforts to expand housing for low- and moderate-income families.

Unlike many other government agencies, it is set up as an authority. That means its board has fewer restrictions than other state agencies.

It can, for example, borrow money, but it still must have the approval of the governor and the Executive Council to move.

Calls to IFA Board Chairman Jeff Heil and to Harris — the IFA official who completed the side-by-side cost comparison — were not returned.

Carolann Jensen, IFA’s interim director, said the lease is signed with Hubbell, which makes the authority legally obligated to proceed.  

"When I was appointed interim executive director, as part of my due diligence, I reviewed the lease with Hubbell and determined the best action is to continue with our plan to move to 1963 Bell Ave.," Jensen said.

The contract was signed by Steve Niebuhr, senior vice president of Hubbell Realty on Jan. 12, a month before the Executive Council's approval. Jamison signed the contract on Feb. 12, the day of the approval.

The contract allows for its termination if the Legislature were to reduce IFA's budget by 10 percent or more, an option Sand described as "a path to reconsider this wasteful lease."

If the governor determines the lease was approved in error, a better route is to ask Hubbell if it would agree to break the lease, Fitzgerald said. Intentional cuts to a department as a way to break a lease could tarnish the state's financial reputation, he warned.

"I would think that (defunding) would have ramifications that wouldn't be good," Fitzgerald said.