Superior terminates agreement with Resolution Copper, withdraws support for land exchange bill

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By Chase Kamp

Superior Sun

After years of unmitigated support, the Town of Superior voted on Feb. 21, 2013 to terminate its mutual benefits agreement with Resolution Copper Company and rescinded its unqualified support for the Southeast Arizona Land Exchange, the federal bill crucial to the Resolution Copper Project.

According to a written statement released by the Town, support has been withdrawn for the project because of what the town sees as an unfair deal outlined in the agreement.

“This was a business decision that had to be made,” councilmember Chris Tomerlin told the Superior Sun.

“We did it because it’s what’s best for the town,” councilmember Gilbert Aguilar agreed in a telephone interview.

Resolution Copper said in a Feb. 22 written statement that the problems raised by the council are not insurmountable. Town manager K. Kanes Graves and other Superior representatives met with Resolution officials on Feb. 25 to discuss the issues brought by the council.

The Town’s letter argued that it cannot afford the purchase of property outlined in the federal land exchange and suggested that certain provisions in the bill would constitute illegal land zoning and unlawful delegation of the town council’s legislative authority.

The federal Southeast Arizona Land Exchange bill, which would grant Resolution Copper the land necessary for the project, has been rejected 10 times in the past eight years, facing opposition from Democratic opponents, environmental activists and Native American groups.

The most current draft is a bipartisan effort co-sponsored by Reps. Ann Kirkpatrick (D) and Paul Gosar (R).

The Town’s letter also cast doubt on the mutual benefits agreement as its 2010 renewal was put in motion by Council member Hank Gutierrez, who lost his seat on the council in 2012 after his vote on the agreement was determined to be a conflict of interest by the state Attorney General.

Only four of the seven Town Council members voted on the agreement termination. The other three members recused themselves due to anticipated conflicts of interest.

In a letter written to bill co-sponsors Gosar and Kirkpatrick, as well as Governor Jan Brewer and Arizona Senators John McCain and Jeff Flake, the Town said it could not support the federal land exchange bill.

“While the Town generally supports the mine, we cannot offer our unqualified support of the bills as drafted,” the letter reads.

The Town’s statement argues because of its budget crisis, it cannot afford the purchase of the cemetery, an airport reversionary interest and some adjacent airport property as outlined by the land exchange.

According to the statement, the purchase price of these properties was to be set by federal appraisal standards, the agreement dictated which properties were to be purchased and in what order, and the Agreement provided for a loan of up to $8,000,000 to the Town to buy the properties, provided that if the Town ever sold any portion of the properties it was to pay to Resolution a release price.

“The Town finances simply cannot support these purchases or terms,” the statement read.

The Town’s statement argues that article 8.4 of the agreement provides that Resolution shall have no liability to the Town for contributions or otherwise, if, in Resolutions’ sole discretion, “other factors” are needed to accomplish the Exchange.

“In other words, the interests of the Town could be bargained away if necessary to accomplish the Land Exchange,” the statement reads.

Superior’s ties to Resolution Copper run very deep. In 2012, the company advanced more than $200,000 in 2013 payments related to the mutual benefits agreement and emergency services agreement to the town at its request.

Tomerlin said the Town has already spent this and last year’s allotment from the company to address budget needs. He said the Town would lose another $100,000 allocation next year if a new agreement was not reached.

However, he was optimistic that the company and the Town could find common ground. “I believe that Resolution will come back and work stuff out with us,” he said.

District 1 County Supervisor Pete Rios said in a statement he was saddened by the reversal of the Town’s support. “This is one of the only economic engines available to this area and we need to stay united in moving forward with jobs and negotiating for good environmental operation in Superior.”

Pinal County economic development manager Tim Kanavel argued it was not too late to address Superior’s grievances.

“As an advocate for economic development opportunities in Pinal County, I remain optimistic that the legislation can be modified to allow this project to move forward without an adverse effect on the Town of Superior’s already serious budget situation,” he said in a statement.

After a special Board of Directors meeting, the Superior Chamber of Commerce issued the following statement:  “The Chamber of Commerce will continue to support Resolution Copper, as well as other companies that demonstrate the desire to sustain, or add to, the economic growth and development of the Town of Superior and surrounding areas.”

The council emphasized its support of the mining project in its statement, and Tomerlin said funds supplied by Resolution Copper have been critical in helping the Town improve its financial footing.

Yet he argued that the Town did not have a renegotiation clause in the agreement and that a decision had to made eventually. “By doing this, it shows that we mean business,” he said.

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