Ann Arbor SPARK's new CEO left San Jose after undisclosed 'breach of city policy,' reports indicate
The new CEO of Ann Arbor SPARK resigned from his previous position as a municipal economic development executive in the city of San Jose, Calif., after a breach of city policy that officials won't discuss.
Paul Krutko "abruptly quit" his job in November as chief development officer of San Jose after "an apparent breach of city policy that the city manager would not discuss, citing personnel privacy," the San Jose Mercury News reported last month.
Krutko has been running his own consulting firm since then, which he plans to fold upon moving to Ann Arbor.
Paul Krutko, the new CEO of Ann Arbor SPARK
Photo courtesy of Ann Arbor SPARK
Krutko spent the last eight years leading San Jose's economic development initiatives. He's credited with helping to convince eBay not to leave San Jose and was a key player in an unsuccessful push to get an NBA team to move to the city.
SPARK chairman Stephen Forrest, the vice president for research at the University of Michigan, told AnnArbor.com on Tuesday that he's aware of the personnel issue that played a role in Krutko's departure, but he declined to disclose details.
"We know about it and it's really not material to this position or anything else," Forrest said. "Basically things change within a city and particularly with the election of a new governor and so on. He was at retirement age and he wanted to go."
Asked to provide details of the matter, Krutko, in an interview, said his decision to leave stemmed from several factors. Among them, he said, was the fact that he and the new city manager "had different viewpoints about how to proceed." He said the mayor of San Jose was also considering pushing for budget cuts that may have led to his division being consolidated into another department.
Krutko also said he realized that, because he was set to turn 55 in January, he had reached the retirement age at which San Jose allows employees to retire with a pension.
"I was an at-will employee," he said. "There's a lot of rumors that float around when you leave. I had an opportunity to take retirement and an exit from a job in which I had received two 10 percent pay cuts over the last few years, and my budget had been cut by half a million dollars. It was mutually agreed that it was a good time that I would move on."
He added: "A lot of people speculate about a lot of things when that occurs. But I think if you do some media searches you're also going to see, in similar articles, lots of people who expressed lots of happiness in San Jose. It's the way it works. When you're in a high-profile public position and you're an at-will employee, this is going to happen."
Krutko also earned a reputation for taking bold actions and brushing some people the wrong people, according to some reports.
"He's a very bright guy, but he could be in his own way controversial,'' Les White, a former San Jose city manager who worked with Krutko in early 2006, told the Pasadena Star-News. "He had a lot of drive and could take strong stands on positions that occasionally irritated people, including me. But at the same time, he got things done."
San Jose Mercury News columnist Scott Herhold wrote that Krutko was a "sometimes-irascible" executive who "did not (resign) gladly," according to "e-mails and text messages uncovered by the Mercury News."
Krutko said certain decisions may have irked some people but they were necessary.
"In any community that you work for a period of time you will have had to lead at various points in that tenure and you'll have to make tough decisions and recommendations," he said. "From time to time you have to provide strong leadership, laying out choices about the way to go."
He suggested that his successful push to win $1 billion in apartment construction projects, which he viewed as important for helping local tech companies attract talent, was an example of a decision that made some people mad. Surrounding communities filed a lawsuit to stop the project, he said.
"I was very aggressive, saying that if you don't create additional development capacity, Cisco will go elsewhere, eBay will move somewhere else, so we were pretty bold in moving forward with the development strategy," he said. "Is that brash? You're moving the city into an aggressive position."
Forrest rejected the suggestion that Krutko has a "mercurial temperament," as the Pasadena Star-News put it.
"That is not my impression," he said. "We've talked to many, many people out in the field who think extraordinarily high of him and we're pleased. And we think people in the community should be welcoming of him."
Krutko's resignation also came after an audit revealed that an entity called Team San Jose, which was given a contract to manage the local convention center, went several hundred thousand dollars over budget. Krutko said he was responsible for overseeing the city's convention center contract with Team San Jose.
But Krutko said he fulfilled his oversight obligations when, he said, his office sought answers for the budget problems at Team San Jose.
"I wasn't making the calls on how the money was being spent. We were just saying, 'Hey, what's the story here? City Council just approved your budget, the contractual budget, and you're already off target in two weeks,'" Krutko said.
He said it was particularly concerning because, "at the same time, I was looking at the financing to do a convention center expansion."
Ultimately, Team San Jose installed a new CEO and a new CFO, Krutko said.
At SPARK, Krutko will be responsible for driving the group's efforts to provide grassroots services to entrepreneurs, provide incubator space to startup companies, conduct retraining for unemployed workers, run small-scale investment funds and convince companies to add jobs in the Ann Arbor area.
SPARK maintains an annual core budget of about $3 million, including about $1 million in tax dollars from the Local Development Financing Authority, funds from U-M, the city of Ann Arbor, other local municipalities, private businesses and nonprofits.
Krutko, who was paid $225,284 in 2009, according to the Mercury News, starts his new job April 18. Officials have declined to reveal details of Krutko's compensation package.
Krutko described it as "very fair" and said he had been recruited by four other groups throughout the country. Finney was paid $258,423 in total compensation in 2008, a figure that includes the cost of benefits.
(Editor's note: AnnArbor.com Executive Vice President Laurel Champion is the treasurer of the Ann Arbor SPARK Board of Directors.)
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
Fred Zimmerman
Fri, Apr 1, 2011 : 2:33 p.m.
I am more concerned about the lack of fit between San Jose and Ann Arbor than I am about the issues surrounding his departure. I am not confident that Ann Arbor should be trying to emulate Silicon Valley; there are enormous advantages of scale there. What I see happening is this guy looking around, saying "we don't have here what they have there," and then getting stalled. It might be better to hire someone who has a record of success starting out with a region more comparable to ours.
Peter Jameson
Thu, Mar 31, 2011 : 9:10 p.m.
Why are people afraid of those who have made money in their life? Don't you think we should nurture this creativity? Why all the negativity?
Terminal
Fri, Apr 1, 2011 : 5:46 p.m.
No ones afraid of anything, What people are CONCERNED about are ethics and ability to work with others and get things done. People, including me, are concerned about the revolving door of insider connections and the ever higher increases for "public" officials at the top (administrators, college presidents, football coaches, throw in CEO's etc) when working people foot the bill and public employees who toss your garbage and fight the fires take the hits.
Atticus F.
Thu, Mar 31, 2011 : 4:52 p.m.
What a big suprise...SPARK is hireing another disreputable indavidual.
63Townie
Thu, Mar 31, 2011 : 4:26 p.m.
I find it interesting that SPARK had to go all the way to California to find a new CEO. If SPARK was so successful in promoting local business opportunities, don't you think they could have found someone from the area for a CEO? If SPARK is getting taxpayer dollars, I think they should 100% transparent about who they are hiring (FOIA anyone?) and what their success rate has been with regard to attracting business. Personally, I haven't seen a lot of business flocking to Ann Arbor since SPARK's inception.
Bertha Venation
Thu, Mar 31, 2011 : 4:15 p.m.
Uh oh....
trespass
Thu, Mar 31, 2011 : 2:33 p.m.
Did you notice that both of Rick Snyder's businesses, Discera & Neophotonics, are based in San Jose? What do you want to bet that he is a friend of Rick who will pass out money to other friends of Rick?
Cash
Thu, Mar 31, 2011 : 11:53 p.m.
A lot of us have more ethics than to not report a $750,000 deficit. With "business working" this way, is it any wonder this country is in the mess it's in? Explains Wall Street issues.
Peter Jameson
Thu, Mar 31, 2011 : 9:08 p.m.
Thats how business works! Start one of your own and see how it goes!
Cash
Thu, Mar 31, 2011 : 3:44 p.m.
Interesting trepass. Good catch!
oneofsix
Thu, Mar 31, 2011 : 12:34 p.m.
One can only hope that Mr. Krutko will read these comments and see, that Ann Arbor citizens keep a close eye on their business leaders and elected officials. Better yet, one hopes that some first hand knowledge may find it's way here to this forum, by those in San Jose who worked for or dealt with Mr. Krutko. This all should play out in the form of a goldfish being watched just outside his fishbowl. Let the "Sparks" land where they may... or in other words, where there are "Sparks" there is often FIRE.
Cash
Thu, Mar 31, 2011 : 2:27 p.m.
That's an excellent point, oneofsix. We cannot just take things at face value.
Obee Hamm
Thu, Mar 31, 2011 : 12:16 p.m.
Given that there's public money going into this guy's salary, it seems like it ought to be subject to a FOIA request.,
Moscow On The Huron
Thu, Mar 31, 2011 : 11:46 a.m.
RichRod: hired form somewhere else at a nice salary... news of problems at previous location start to emerge.... same problems happening here. Krutko: hired form somewhere else at a nice salary... news of problems at previous location start to emerge.... Please, don't follow the patten to the next step.
trespass
Thu, Mar 31, 2011 : 11:07 a.m.
I don't know about $300,000 but quite a few make more than $100,000. How much are they going to pay Roger Fraser? <a href="http://www.a2politico.com/?p=6032" rel='nofollow'>http://www.a2politico.com/?p=6032</a>
Alan Goldsmith
Thu, Mar 31, 2011 : 10:46 a.m.
"<a href="http://www.annarbor.com/business-review/ann-arbor-spark-rick-snyder-bookkeeping-errors/">http://www.annarbor.com/business-review/ann-arbor-spark-rick-snyder-bookkeeping-errors/</a> also reported by nathan. just reminding, lest history repeat itself." Cut and pasted from the Associated Press. Wouldn't call that 'reporting'.
Alan Goldsmith
Thu, Mar 31, 2011 : 10:44 a.m.
I suppose they didn't teach reporters how to Google where you did your 'reporting' internship? Lol.
Cash
Thu, Mar 31, 2011 : 10:30 a.m.
At this point with an unproven record of success of this organization, how can township and municipalities afford this luxury? We need to spend our money on basic necessities....bare bone needs. Our tax money should not be paying a DIME to an organization not willing to make every salary, every expense public. And the big cover over this guy's past makes everything suspect now. Maybe when the SPARK dies, the smoke won't get in the media's eyes.
godsbreath64
Thu, Mar 31, 2011 : 4:13 a.m.
News Flash! Sick just now announced a new gauleiter. The Casino industry has lost one of their finest to the lure of Sick money.
FatherXmas
Thu, Mar 31, 2011 : 3:13 a.m.
Really...this is the best that SPARK and U-M could find??? Maybe he can lead the charge to recruit the Pistons to the renovated Crisler!!! Seriously, he sounds like one of these economic development "visionarys" who bounce from community to community every few years mesmerizing boards of directors with their Big Ideas. I'll bring the Simpsons iconic Monorail episode to SPARK's annual meeting, any volunteers to supply the popcorn?
Cash
Thu, Mar 31, 2011 : 11:02 a.m.
I will! I love popcorn and a good cartoon show! Better to laugh than to cry.
cash2
Thu, Mar 31, 2011 : 2 a.m.
foia-um-annual spark funding
cash2
Thu, Mar 31, 2011 : 2:51 a.m.
Thanks, Nathan. Curious, don't know - SPARK vs. film incentives - where's the better return on investment? My bias is that SPARK is untouchable, success or not.
David Briegel
Thu, Mar 31, 2011 : 2:33 a.m.
Don't you wonder what all the citizens of Saline, Ypsilanti and the Townships think of their return on investment? How many jobs to each?
Tom Whitaker
Thu, Mar 31, 2011 : 2:25 a.m.
Whoops, not SPARK East. I meant the Michigan Life Science and Innovation Center.
Tom Whitaker
Thu, Mar 31, 2011 : 2:20 a.m.
So why is SPARK East located in Plymouth?
Nathan Bomey
Thu, Mar 31, 2011 : 2:06 a.m.
@Cash2, According to SPARK, U-M contributes $350,000 to SPARK, which also gets $250,000 from Washtenaw County and $75,000 from the city of Ann Arbor. Other municipalities such as the city of Saline, the city of Ypsilanti, Ann Arbor Township, Superior Township and Ypsilanti Township collectively provide $60,000 to $70,000. Eastern Michigan University provides $60,000 for one of SPARK's incubators. <a href="http://www.annarbor.com/business-review/ann-arbor-sparks-influence-expands-as-rick-snyder-michael-finney-plan-medc-changes/">http://www.annarbor.com/business-review/ann-arbor-sparks-influence-expands-as-rick-snyder-michael-finney-plan-medc-changes/</a>
CynicA2
Thu, Mar 31, 2011 : 1:51 a.m.
Oh great! In a community with more annoying/irritating people per square mile than anywhere else in the country, we're importing another one, and paying him a small fortune to boot! Is it any wonder this town loses people just about as fast as it gains them. Once the newbies figure-out the real deal (3-5 years) - off they go! "Welcome to Ann Arbor! Population: Always About 110,000 (You'll understand why in 3-5)."
Terminal
Thu, Mar 31, 2011 : 3:56 p.m.
Someone needs to get outside of Ann arbor's city limits more often.
Marshall Applewhite
Thu, Mar 31, 2011 : 4:33 a.m.
The name "CynicA2" is very fitting for this post. Frankly, I agree with everything you said.
Tom Whitaker
Thu, Mar 31, 2011 : 1:36 a.m.
Interestingly, Mr. Krutko probably won't be too sorry to see the proposed Ann Arbor conference center go away... From the Pasadena-Star News : "In addition, the non-profit that runs the city's convention center, which he oversaw, is being audited after city finance officials this summer were surprised to learn it was $750,000 over budget. The non-profit's chief executive has insisted he was fully open about the group's finances with city officials." <a href="http://robocaster.com/pasadenastarnews/podcast-episode-home/california-ci_16527215/san-jose-chief-development-officer-paul-krutko-resigns.aspx" rel='nofollow'>http://robocaster.com/pasadenastarnews/podcast-episode-home/california-ci_16527215/san-jose-chief-development-officer-paul-krutko-resigns.aspx</a>
capersdaddy
Thu, Mar 31, 2011 : 1:15 a.m.
<a href="http://www.annarbor.com/business-review/ann-arbor-spark-rick-snyder-bookkeeping-errors/">http://www.annarbor.com/business-review/ann-arbor-spark-rick-snyder-bookkeeping-errors/</a> also reported by nathan. just reminding, lest history repeat itself.
capersdaddy
Thu, Mar 31, 2011 : 1:03 a.m.
good ol' boys' club. it's everywhere - rules for some, exceptions for others. until white collar crime is punished in tandem with violent crimes, this will never end. Violent crimes create individual victims, white collar crime hurts us all - they are equally disgusting.
Dcam
Thu, Mar 31, 2011 : 11:08 p.m.
That's not news to me, I grew up in Madison, Wisconsin, and, naturally the impression I've always had of Ann Arbor was that it was a provincial little town that was an arrogant town far beyond its reality. After I moved to Michigan, some 30 years ago, my mind hasn't been changed, but the facts have certainly proven the presumptions I'd had. Ann Arbor is a provincial little village with 100+ thousand people without a vision. Madison was a town of 48,000, and progressive when I was young - today it's a growing city of 200+ thousand - not all of it for the better, but, until Scott Walker came along, it was still moving forward. And the University of Wisconisn is a plus in Madison - it's not center of the universe, as UM is in Ann Arbor. The city of Ann Arbor is owned by UM, its an appendage being strangled, a vestigial organ.
David Briegel
Thu, Mar 31, 2011 : 12:24 a.m.
Cash, why should anyone interview anyone? They have a press release from Slick. What else could anyone possibly desire??
Cash
Thu, Mar 31, 2011 : 8:22 p.m.
John, I was aware of that fact.I know David's posts very well.
John B.
Thu, Mar 31, 2011 : 7:14 p.m.
David was being sarcastic....
Cash
Thu, Mar 31, 2011 : 10:13 a.m.
We cannot trust what we read and must question everything. I find myself looking between the lines of each article now. Very sad and doesn't say much for our community.
David Briegel
Thu, Mar 31, 2011 : 12:23 a.m.
Just another Quarter Million Dollar Man with TeaPublican Situational Ethics. In the name of Slick! Goose and Gander? Heck, this clown might even get $300,000!! But at least he will be another voice against those evil unionized employees and he will never, ever advocate any "progressive values". And his friends at Cisco are sitting on 40 Billion in their Swiss Bank Acct! Maybe he can manage our wonderful downtown convention center with his vast experience!? He will fit right in with Slick and his crowd!!! Cash, You are such a treasure! We can never thank you enough!!
Jen Eyer
Thu, Mar 31, 2011 : 6:01 p.m.
Moscow: We already have that functionality. To hide a commenter, hover your mouse over the person's avatar, and then click "ignore user."
Atticus F.
Thu, Mar 31, 2011 : 4:58 p.m.
moscow, if they do bring in a 'hide this poster' button, you wouldn't last very long. Be careful what you wish for.
Moscow On The Huron
Thu, Mar 31, 2011 : 11:32 a.m.
Thus begins another day of the same old, bogus, tired liberal talking points (and pretty dull points, at that) somehow twisted and adapted into commentary on any AnnArbor.com story regardless of the topic. "Snow expected today" ... "You can thank Rick Snyder for this because he's giving a quadrillion dollars of tax breaks to every company in the state, busting the unions and destroying the middle class!" When do we get the "hide this poster" button?
Cash
Thu, Mar 31, 2011 : 10:20 a.m.
Mr Jameson, I beg to differ. <a href="http://www.nytimes.com/2011/03/31/us/politics/31liberty.html" rel='nofollow'>http://www.nytimes.com/2011/03/31/us/politics/31liberty.html</a>
Cash
Thu, Mar 31, 2011 : 10:03 a.m.
Ever vigilant, David...it appears that we have to be.
Peter Jameson
Thu, Mar 31, 2011 : 5:12 a.m.
The tea party is a bunch of hillbillies, not millionaires.
Cash
Thu, Mar 31, 2011 : 12:09 a.m.
I would say that repeating information from the links I posted this morning isn't really adequate. Not one interview with people in San Jose? Wow. Interviewing the people in San Jose involved, particularly the issue regarding the $750,000 unreported deficit....that might have made a good interview. Regardless obviously he fits the profile that SPARK and the UM folks applaud. That says it all.
Cash
Wed, Mar 30, 2011 : 11:50 p.m.
With special thanks to Cash who posted the links this morning that led to this story? Guess not.
Cash
Thu, Mar 31, 2011 : 11:50 a.m.
Bwahahaa...Moscow then we could get unemployment! :-)
Moscow On The Huron
Thu, Mar 31, 2011 : 11:38 a.m.
Careful... once you're credited you might be considered be a community contributor, and then you can get laid off.
godsbreath64
Wed, Mar 30, 2011 : 11:46 p.m.
If you want to work outside of the law, Sick and The New Gauleiters will find a position for you!
trespass
Wed, Mar 30, 2011 : 11:14 p.m.
"Krutko also said he realized that, because he was set to turn 55 in January, he had reached the retirement age at which San Jose allows employees to retire with a pension." So just like those Ann Arbor employees who qualify for retirement, he is going to take his retirement at the same time that he takes another high paying job. This is why defined benefit retirement plans should be replaced by defined contribution plans (401k).
trespass
Thu, Mar 31, 2011 : 11:08 a.m.
I don't know about $300,000 but quite a few make more than $100,000. How much are they going to pay Roger Fraser? <a href="http://www.a2politico.com/?p=6032" rel='nofollow'>http://www.a2politico.com/?p=6032</a>
David Briegel
Thu, Mar 31, 2011 : 2:28 a.m.
Please tell us all the City of A2 retirees who get $300,000 jobs!
Terminal
Thu, Mar 31, 2011 : 1:24 a.m.
I fail to see what one has to do with the other. Most retirees do not find other work after they retire and I doubt that ANY of them are getting high paying jobs from political buddies. Please give you tired Republican talking points with no basis in fact a rest.