by Arnaud and Naja Girard…….
How do they do it?
In the past few months developers convinced the City of Key West to pay them 12.5 million dollars for the promise not to raise rents beyond $2709 per month. That was Peary Court, where 83% of the 2-bedroom units can now rent for that “middle-income” affordable level, $2709/month. [Low-income affordable is $1545.]
Four weeks ago, it was Sunset Marina LLC [developers Barton Smith and Greg Oropeza] that managed to get around the City’s requirement for 30% low and median-income affordable housing. They too will be able to legally rent 89% of their units for over $2300/month [66% over $2700].
Yet workers across the City complain that rents are unaffordable. So again, how do developers always seem to find a majority of unrepentant commissioners ready to sign on to these juicy deals?
The story behind the story opens a window into the secretive world of ‘connected people’ and the methods they use to circumvent the law.
Officially, the final approval of a Major Development Plan is determined during an open meeting of the City Commission. Witnesses are sworn in. The public has the right to speak. Commissioners are prohibited from discussing the matter amongst themselves outside of the meeting. But how many of those multimillion dollar deals are actually settled behind closed doors, to be presented later to the good people of our democracy with grand decorum of microphones and pretense of Sunshine Law?
The City’s development plan application form has a warning printed in bold letters:
With that in mind the final hearing on the Sunset Marina development was disturbing.
Developer Barton Smith was struggling with numbers. Interestingly enough Mayor Cates began finishing Smith’s math calculations. Observers could have easily concluded that the Mayor was reading the answers from a document in front of him.
It went something like this:
“Is there some way that we can increase some of the lower end, the median-income or the lower-income units there?” said Major Cates.
“That’s a great question,” said Smith who immediately geared into a well-prepared bargain including slashing $245,000 in City impact fees.
Smith: “If you were able to increase the amount of market rate you had –“
Cates: “You would get 3 low –“
BS: “Yeah, exactly–”
Smith: “So, instead of having 2 lows and 5 medians you would then have 5 lows, 7 medians, the remainder affordable which would be twenty–“
The show included input from the City’s Planning Director, Thaddeus Cohen, who read answers from a sheet of paper about the proposal that came from the “unexpected” great question from the Mayor.
Cohen: “since the question was asked, ‘how can he do better than–”
Cohen: “–the developer has suggested a couple of things that may be able to happen.“
Is it just us or does it sound like an agreement was reached before the meeting?
Yet, when we later asked Mayor Cates if he’d met with Sunset Marina developers prior to the Commission meeting he answered, “No I didn’t meet with the developer. One of them called me and said are there any issues you want to ask me about and I said no. That’s not a meeting.”
During the hearing not one of the Commissioners disclosed that they’d previously spoken with the developers or their representatives.
However, by the middle of this week most Commissioners had admitted to having been contacted by Sunset Marina developers prior to the Commission meeting and half had been given a full presentation.
Some, like Commissioners Wardlow and Romero, were very up front with it. Others, like Commissioners Lopez and Payne needed more help. Commissioner Kaufman received multiple phone messages from Sunset Marina developers but never returned the calls. Weekley and Cates claimed they’d never met with the developers.
The Blue Paper obtained a copy of the City Commission’s appointment logs. They were so heavily redacted it was a wonder.
However, the logs did show that on the same day Commissioner Romero says she was approached by Greg Oropeza at City Hall to schedule a meeting with Sunset Marina developers, Cates met with Oropeza.
After multiple inquiries, Commissioner Weekley admitted, in an email, to a phone call from Barry Gibson [a managing member of Sunset Marina LLC],
Weekley: “I did not speak to Bart Smith about the project.”
BP: “Thank you Jimmy. You didn’t speak to Bart Smith about the project. Can you confirm that you didn’t speak to anyone about the project outside the hearing?”
Weekley: “Barry Gibson called and asked if I had any questions. I told him at that time I had not looked at the agenda and did not have any questions. If I did I would ask them at the commission meeting. That’s it.”
Weekley did not ask a single question at the hearing and voted to approve, in spite of the development plan’s failure to adhere to the 30% low and median requirement.
Commissioner Billy Wardlow, who is one of the few to have always taken up the cause for low-income affordable housing, was absent from the meeting.
Under Florida Statutes, developers are not strictly prohibited from communicating with decision makers ahead of quasi-judicial hearings. However, such communications are considered “improper.” If public officials fail to reveal the content of the communication it creates an automatic right to sue.
In Monroe County v. Pigeon Key Historical Park, the Court wrote, “[The purpose of the Sunshine Law is] to prevent at non-public meetings the crystallization of secret decisions to a point just short of ceremonial acceptance.”
“Proof of an ex parte communication creates a presumption that a decision is prejudiced.” [Florida Attorney General Opinion 94-71]
The Blue Paper is still trying to gather the facts relating to the Sunset Marina development. Were parking spaces used by the licensed charter boats and liveaboards shifted over to the new apartments? How were the Commissioners convinced to abandon the 30% low and median-income affordable housing requirement?
There is no way for the public to know what was said during these ex parte meetings and phone conversations. There is only one thing for sure, the cause of truly affordable housing was lost in the process.
The Blue Paper found similar improprieties in the Peary Court purchase.
When the property was initially for sale for 35 million, Mayor Cates failed to present the opportunity to fellow Commissioners and alone took the decision not to pursue the purchase. However, he changed his mind when the property was back on the market a few years later for 55 million. He then appointed an “Affordable Housing Advisory Committee.” The committee gathered secretly, never publishing the dates or venue for their meetings. When The Blue Paper asked for the minutes of the meetings the City initially refused to produce them. Even though they claimed to have been researching different solutions to the housing crisis, members of the committee used private funds to create a PAC in support of the unpopular purchase of Peary Court, manned a propaganda machine, and apparently have not met since the voters shot down the City’s purchase of the property. The entire operation involving the Mayor’s Affordable Housing Advisory Committee likely violated the state’s Sunshine Law.
The project rebounded into “Plan B” – where a 12.5 million dollar purchase of an affordable housing deed restriction won the Mayor’s support. The Mayor however never mentioned that his wife, Cheryl Cates, is a realtor associated with Knight and Gardner, the Buyers’ agent. Knight and Gardner collected $600,000 upon the successful completion of the 60 million dollar deal. [To be fair, there is no indication that Cheryl Cates benefited directly from the deal.]
With the legitimate fear that voters would reject a 12.5 million dollar purchase of a deed restriction, the City pretended the County’s Land Authority, not the City, was the one actually buying the property interest so as to avoid the mandatory voter referendum required by the City Charter for any purchase of an interest in real property.
Yet, deliberations at the County level clearly showed that the City was the final decision maker on the deed restriction purchase. The purchase, using funds that could only be used for the City, was simply rubber-stamped by the County’s Land Authority.
After having avoided another confrontation with angry Key West renters, the Commission spent all of the money available to build new affordable housing [$12.5 Million] in protecting a development that would be able to rent 83% of its apartments for $2709/month.
Peary Court closing documents show that another $900,000 payment was made to Century 21 in Key West and a mysterious $118,750 for a “consulting fee” was made to a company located inside a UPS mailbox in Sunrise, Florida.
And that’s how it’s done.
This article was updated on August 9, 2016.