Key West Government and Big $ Developers, A Relationship Riddled with Impropriety

Issue 24 Trailer Park for web

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:

improper to meet

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–”

Cates: “So–“

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–“

Cates: “Two.”

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–”

Cates: “Yes–”

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.

redacted lopez

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.

cates oropeza meeting

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.

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18 thoughts on “Key West Government and Big $ Developers, A Relationship Riddled with Impropriety

  1. As we know, it’s not just the Key West government that has a cozy relationship with developers. This corrupted connection has damaged and destroyed our island communities and quality of life.

    Violations of integrity, ethics and the law; are in many instances just standard operation procedure. As you alluded to in your brilliant article, there really isn’t any genuine effort to conceal or cover-up their wrongdoing.

    The aberrant deviation from common sense, which goes into the planning and city commission’s decision making process; is demonstrative of a measurable imbalance that borders on insanity.

    Killing oneself, their family and the resources needed to survive is a particularly cruel form of suicide.

    Must get up to Miami, as we are creating a spectacular grand opening for our new theater.

    The Yin and Yang of life. Such joy and beauty, accompanied by the filth and stench of corrupt governance…

  2. Kowabonga!!! Yet another Key West code blue wash day for which Maybe Cates should give Arnaud and Naja a key to the city but they should not hold their breaths.

  3. This is a big story. It reminds me of when sharp Atty Jerry Coleman came before the County Commission with the giant Safe Harbor development proposal, and it was approved in a flash by the Gang of Three.

    They were voted out in their next elections, as I recall.

  4. Key West is slowly turning into a location that only the very rich can live. And why not being it has near perfect weather, easy access to water, fishing , bars, restaurants and always some event. It offers most of what the very rich desire. That part is fine and because of supply and demand they are costly. You are not paying for the buildings but for the land. Problem is all the rich need the services of the low income workers. That too is great because it creates jobs. Now for the problem. The workers need a place to live and at the same rate of growth for the rich the decline of places to live go away. Will the help all need to live on a boat off Wisteria ? Simple math tells you that $10 an hour workers can not afford $1500 a month plus utilities without working 2 or 3 jobs. What is the point in living in KW if you can not afford to enjoy it ? Workers try it for a short time and soon figure it out as not worth it.

    The corruption that keeps removing low income housing in time will destroy you. In time will destroy the rich because they will not get the services they need. Property values will drop. We have seen in the last 40 years the changes in KW and it clearly is not the small island with historical charm that it once was. It did not happen on it’s own. It took the help of your mayors and commissioners that let developers destroy it. The reason why is easy. They can be bought. I highly question who is counting the votes at elections. 90% of the residents do not want who you have in office. Perhaps the qualifications to vote needs looked into.

    But the simple fact is KW is destroyed forever and will never recover. Developers will take the older buildings over and redevelop into something bringing in even more profit. The last straw for us was seeing what you did with 12 million dollars. It was tourist tax money and you did not do one dam thing to promote or help the tourists. Had it been spent on low income housing that serve tourists that would been great. Maybe improve the beaches or pave Duval st. . Create FREE parking. No , give it to a buyer of property that rents to high wage workers. They did not need the help and rents are the same or higher. So only thing you did was make the down payment for a new buyer.
    TOURISTS are watching and reading this paper and should be scared. A police department that KILLS and thug cops bragging about doing it. Prices that are double of other beach towns. Your clock is ticking away. Wake up and save what is left. VOTE and you just might save it. Have no idea how to fix your KWPD other than hire a chief with balls to fire the thug cops and hire honest cops. Lee does not have what it takes. Your mayor is so corrupt that words can not describe him. Sunshine law broke daily .

  5. And take a look at the Simonton old trailer park. Is it completed yet ? In July looked like still not completed. Dam sure does not look like original picture promised.

  6. Boy, I wonder who picked up that big check for $ 118,000 for ” consulting “. Anybody want to guess? Mysterious indeed if it was bribery or tax evasion ?

  7. Redacted public documents? In Key West? Oh, maybe it was a” national security ” thing, but there sure is a lot of it blacked out as you show in the article above. Who gave the order to keep that hidden , please? And why? This is how it done? Outrageous. I don’t suppose law enforcement is interested are they???

  8. It’s certainly disappointing to see that fully 2/3 of Clayton Lopez’s appointments have been erased from public view. Ever since Clayton voted to annex Christmas Tree Island and attended that “special commissioners’ dinner” on Sunset Key, I have been uncomfortable over his coziness with developers. BTW: that Sunset Key dinner was hosted by Bob Dean.

    It was mighty nice of Clayton to return the favor when he voted as a member of the Key West Election Canvassing Board, to consider Bob Dean’s official residence as that tiny apartment behind his funeral home, rather than the big mansion on Key Haven that he declares as his Monroe County Homestead Exemption.

    A “Relationship Riddled with Impropriety”… I’ll say!!

  9. Rick Boettger …

    I’ve always admired and valued your courage, intelligence, positive spirit and encouragement. Along with the compassionate and loving actions of others, your generosity and support spared the widow of a Marine who had saved my life, from being thrown out of her home via a fraudulent bank foreclosure.

    Your kindness, inspiration and optimism are contagious. These cherished qualities have enlightened and uplifted the lives of many. Your reassurance shored me up as we pressed on with the completion of our new theatrical complex.

    The architect’s laminated drawing of the proposed project, which I shared with you, has come to fruition in all its glory.

    Thanks for your brilliant contributions to “The Blue”. And the good will that your bring to the world.

  10. “Wake up and save what is left.” Posted by JIMINKEYWEST

    EXACTLY, that is why it is EXTREMELY IMPORTANT to keep our last remaining open spaces, especially like those at the Truman Waterfront Park, for our quality of life now and for future generations.

    1. And I am all for saving it if other locations are available. Had the People of KW known of plan B of Peary Court I think they would rather have had the city buy it. But ALL of it and then had extra land to build low end housing.

      What some do not see is this is like strip mining. They destroyed thousand of acres. The developers do not care about the final results of KW. They will walkaway with the profits and never return to KW. And this is normal for investors , I too am an investor and my main concern is $$$$$$.

      Your mayor and commissioners should have cared but clearly do not. They only see more buildings and bigger tax base and of course bribes. The deals are made behind closed doors and then a fake public meeting to meet the law. Really to agree to approve major issues in just one meeting is a joke. No thinking time ? What they are doing is flaunting it like the drug dealers in Everglades city did. It called attention to it and the feds checked it out. Same will happen in KW and the day will come when they get caught and put in prison. They already have a nice place to live and high income. They do not worry where the low income people live. Maybe in a packed house with some sleeping on a couch or someones shed. And because of the illegal residences they live at will not risk voting.

      Do I think anything will change ? HELL NO. It is bubba land and been this way for years. Will it hurt tourism ? Maybe in time. The average tourist is not concerned about the workers. All they care about is a clean room, drinks, food, parking. So far they get it. We can easily afford the KW prices so we go often. The ones that can’t go someplace else. The workers likely are short term residents of KW. Soon as they get tired of working and no fun they go back up north. Will always be someone heading south to replace them. The homeless seem to be gone or well hidden. Crime rate went down and that is great but it is a result of the poor leaving.

  11. If you are able to vote in Key West the choice is clear…. you need to vote out virtually every incumbent…. especially Mayor Cates. If you really want to change things you need to vote all of them out…
    The easiest to replace is actually Cates…. do you really think any of his challengers would be worse in any way? Mickey Mouse could replace Cates and we would all be better off.

  12. ” 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.” From article above and unredacted log, ( OOPS! )

    So I guess Cates was lying? He DID improperly meet with the developers?
    Would Weekly lie too?
    Shine it on …

  13. Sunset Marina Condos hired Bart Smith as the the attorney to sue the City over KOTS as the City had not followed its own laws when creating it. The City was in violation and agreed to move KOTS. Then Bart becomes the owner of the Marina (not the Condos). Conflict of interest? Unethical? Since the City is now in violation of the KOTS agreement with Sunset Marina Condos where is the follow up? He certainly does not seem interested in making any waves now. It all just stinks. The liveaboards should NOT be kicked out due to a parking regulation. If the City can bend the regulations for other reasons, this one should be bent as well. Anyone but Cates. I came from Chicago and I thought that City was corrupt. They could take a few lessons from Key West.

  14. Look at the total picture. He backs off on COTS to get what he wants and as soon as he gets the building permits in his hand COTS will be gone because it creates a lower valued rental property. Cots did not need the parking so why do the slips. Nothing corruption and the Bubba system. Your voting box or counting needs a serious investigation. We are dam glad we passed up buying any property in KW. The corruption is second to none. It is a well known fact that a very high percentage of residents in KW do not own cars, at best a moped. You are dealing with the filthy rich and they will destroy your island. Other than for a few events such as gay pride and FF we will not be going to KW any more. The charm is gone and we can find far better places to visit. NO the developers do not care about me. They with the help of your corrupt government will bleed every dime it can before leaving. And that is normal for developers. You have idiots in office that will become rich and not from the pay check. How long will it take before KW crashes is any ones guess but it is coming. You will be left with few jobs, lower property values and fewer tourists. Your days are numbered. Yes can be saved but not likely. We been noticing the last few years how easy it is to find a vacancy for FF even with no reservation. And that is your peek week. The voters are either scared or stupid to vote the trash out. Will be interesting this year for FF being the theme. I expect lots of slams on KWPD and Cates and your corrupt town. Just maybe it will get attention to attract the feds.

    And warning to KWPD , you have no idea how many cams are watching and uploading instant to saved internet storage. You will not simply take cams and destroy evidence.

    Dam shame such a great fun town is near the end.

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