His empire on the lake


COURTESY : St. Petersburg Times

Published September 20, 2004 

TAMPA - Behind the gates at Cory Lake Isles, Gene Thomason's power is absolute.

The 10 miles of roads? He insisted upon brick and chose the contractor.

The tropical foliage lining the entrances of the 588-acre development in north Tampa? That's his doing.

The 165-acre lake? He dug it and named it after his son.

Taxes paid by homeowners will help repay about $20-million Thomason borrowed to create the development. Homeowners also pay Thomason a fee to operate it.

Thomason dictates how close homes can be to one another, which lawn companies homeowners can hire and the type of palm tree they can plant.

"He takes care of the property as if it were his own private yard," said homeowner Jane Taggart, who approves of the attention to detail.

Others complain Thomason wields too much power.

"He's like Jesus Christ up there," said Joseph Caetano, a Tampa activist who briefly owned a home in Cory Lake Isles.

How did one man acquire so much power?

Thomason exploited a state law that created little-understood but increasingly common community development districts.

Community development districts created by developers operate like independent governments and can borrow millions tax-free to pay for roads, utilities and amenities. Homeowners in the development pay off the debt.

Although much of the taxing authority shifts from the developer to homeowners after six years, a loophole in state law allows the developer to hold on to power much longer.

That helps explain why, after 13 years, Cory Lake Isles and its 300 homeowners remain under the absolute control of Gene Thomason.

American Dream, with little oversight

More than two decades ago, state legislators worried the American Dream was in peril. Developers struggled to keep up with demand for quality homes for middle-class Floridians. Many newer subdivisions were poorly built, and legislators concluded developers needed incentives to build better houses at reasonable prices.

In 1980, the Legislature created community development districts that could be used by developers to raise money for roads and other public works projects in new developments.

Those development districts are now the most popular method for financing new subdivisions in Florida. There are more than 270, twice as many as four years ago.

Supporters of community development districts say most are well-managed and help create upscale communities that would not be financially feasible otherwise. But they acknowledge that while these districts act like governments, there is little oversight to catch mismanagement or public scrutiny to shed light on conflicts of interest.

The history of the Cory Lake Isles Community Development District reveals a pattern of favoritism and private gain without consent of the homeowners who pay the bills.

As chairman of the board, Thomason, 60, has placed his wife, son and friends on the development district board. From 1992 to 1996, the district paid him $2-million for land and dirt.

Meanwhile, members of the board have awarded one another jobs worth hundreds of thousands of dollars. And the board has hired Thomason to maintain public property and bill homeowners directly for the work.

Homeowners typically begin to take some control over community development districts six years after the development is established. But the law doesn't require the developer to cede power until 250 registered voters live there.

The community development district at Cory Lake Isles was established 13 ago, but 250 voters did not live there until last year. Thomason will hold on to majority control of the board for two more years.

Homeowners, who pay from $2,188 to $2,923 a year in special taxes and fees on top of their property taxes, will not have a strong say in what they pay until they control the board in 2006 - 15 years after the community development district was established.

Thomason said there is nothing wrong with his oversight of Cory Lake Isles. He said he follows the rules and his attentiveness results in an attractive community at lower prices than homeowners could find elsewhere.

"It takes three guys to do what I do," he said. "I try to look out for everything."

But there is little room for dissent.

Records of board meetings since 1992 show the only homeowner to publicly criticize Thomason was Madeline Moos. Moos and her husband, Ron, sought details about how Thomason spent money he collects from homeowners. Thomason resisted.

The Mooses ultimately lost an unrelated lawsuit against Thomason and paid him $71,000 in legal bills. They filed for bankruptcy in 2000 and moved to Temple Terrace.

"I felt bad for them," said Joanne Kaplan, a former neighbor. "Gene was making an example out of them. And it worked. We were scared of him after that."

From mowing lawns to selling them

Born in Tampa's Seminole Heights neighborhood, Thomason was 3 years old when his father died of cancer. As a child he mowed lawns and performed other odd jobs to help support the family.

Thomason ran a car lot and nursery as a teenager, and a shell mine and sod company in his early 20s. He earned enough to buy 588 acres in northeast Hillsborough County that would become an empire for sod, fill dirt, cattle and - ultimately - Cory Lake Isles.

Over the years, Thomason has skirted several scandals.

In the 1970s, a Hillsborough County official lost his job after it was revealed that his department awarded Thomason a contract while they shared ownership of a hog farm. Thomason kept his county contract.

In the mid 1980s, Thomason was one of 25 defendants accused of bribing county commissioners. Thomason, along with most of the other defendants, was acquitted. He also settled out of court lawsuits involving charges of business fraud by one of his former development partners.

State environmental regulators halted his project in 1985 after discovering that he dug Cory Lake without the necessary permits. They called it one of the worst environmental disasters in a decade, but settled with Thomason in 1988 by fining him $10,000.

Thomason paid the fine in 1992. By then, the Tampa City Council approved his project as a community development district. That enabled Thomason to borrow freely to build the subdivision. The district's board provided the only oversight, and he picked its members.

Their unanimous choice: themselves

Thomason appointed himself to the board with two business partners, his son, his wife, a friend who later stepped down to serve as the community's engineer, and two officials of companies paid by the development district.

The board has unanimously approved all 330 motions that have come before it.

Tracking down the issues behind those votes can be difficult. Community development district records are public, but Cory Lake Isles keeps many of its key documents in a management office in Broward County. Bond records are kept in a lawyer's office in downtown Tampa - 22 miles from Cory Lake Isles.

But the district records are incomplete.

For example, Thomason sold the development district land and fill dirt for $2-million between 1992 and 1996, according to records reviewed by the St. Petersburg Times.

Thomason said he sold the district the land for part of the lake for $1-million. He sold the dirt for $1-million in what he describes as a good deal for the district.

Verifying his accounting is impossible. Records are missing or the board didn't get bids for the purchases as state law requires.

Some development district board members also worked at the companies awarded jobs by the board.

Interarch Design received $110,000 from 1992 to 1996 to design the guard houses. Its vice president, Hugh MacArthur, sat on the district board at the time.

Then there is Dayne Piercefield, a longtime friend of Thomason's.

Thomason appointed Piercefield as a charter board member in 1991 and wanted to give him engineering work. Florida law considers this a conflict of interest, so Piercefield stepped down from the board in 1992.

District records show the board hadn't chosen an engineer by Feb. 21, 1992, yet Piercefield had charged the district $5,360 for engineering services. There were 10 competing bids for the job, yet no record that the board considered them.

Since 1992, the community development district has paid Piercefield and his company $850,000.

Thomason said he didn't know the specifics of how the development district hired contractors but assumed the district followed state law. He referred questions to community development district attorney Mark Straley and to Piercefield.

Piercefield said the district sought bids for engineering services. He would not produce documentation, and a Times reporter could not find any in the development district files. The paperwork might have been mislabeled, Piercefield said.

Straley walked away from a reporter when asked about the missing bids.

"Just go ahead and write your article," he said. "You're going to make us look criminal over this. You have an agenda."

A special place, personally patroled

Thomason said the board gave him the independence he needed to make Cory Lake Isles stand out from the rest of suburbia, much of which he calls too bland and corporate.

For example, experts said it would cost too much to pave all of the roads in Cory Lake Isles with bricks. Thomason ignored the warning. Now that ribbon of 14-million bricks is one of the subdivision's trademarks.

Most subdivision entrances rely on oak trees and grass for curb appeal. Thomason chose a thick array of palms and exotic flowers.

Then there is Cory Lakes as family enterprise.

Thomason's son and the namesake for the community is 26 and sells real estate with his mother, Betty, from the beach club at Cory Lake Isles. Their faces are on a highway billboard. Both sit on the development district board. Betty serves with Gene on the homeowners association, which enforces deed restrictions.

And business is good.

The average price for homes sold in Cory Lake Isles last year was $385,000. Thomason sold 370 single-family home lots and land for 250 townhomes to Avatar Properties, a Coral Gables developer, for $15.6-million.

Thomason often patrols the community at odd hours, and he won't hesitate to escort strangers off the property.

In 1994, a couple scouting for a home drove into the project without permission. Thomason pulled behind them in his Lexus and brandished a 9mm semiautomatic handgun. Thomason later told police he thought the driver's cell phone was a weapon. He was charged with improper display of a firearm, but the State Attorney's Office dropped the charge.

In 1992, the board ceded the development district's operations and its management budget to Thomason and his private company, Cory Lakes Ltd. Thomason says he can do the job cheaper and better than anyone else.

But no bids were taken. Thomason directly assesses homeowners $1,248 a year to pay for his expenses and directs that the checks be made out to his company, Cory Lakes Ltd., not the community development district.

He collects about $240,000 a year, and the total rises as more people move in. The money is kept in a private account, and Thomason decides who can see how that money is spent.

Homeowners Joanne Kaplan and Madeline Moos said they never felt comfortable paying the fee to Thomason's company.

"It's very hard to find out how he's spending your money," Kaplan said.

After she complained, she said, Thomason threatened to foreclose on their home.

Moos refused to pay the fee. When her home sold in 2001, Thomason reported a $6,000 deficit in unpaid bills to a title company, which withheld the money.

The Mooses sued the title company and won back the $6,000. Their legal bills were $8,000.

Thomason said he has every right to collect the money. He said it costs $800,000 a year to care for the common areas in Cory Lake Isles and that he loses money.

"Electric, landscaping, fertilizer, security, repairs to the road, repairs to the landscaping, you name it, it's in there," he said. "It's a massive operation."

He said he's never spent the money he collects from homeowners on himself or anything unrelated to the upkeep of the property.

"Any intelligent person knows the money it takes to run this property," Thomason said, "and it costs a lot more than what I collect."

The name on that account, Cory Lakes Ltd., has come up twice in car accidents involving Gene's son. Thomason said the cars involved in the accidents had been owned by Cory Lakes Ltd., but he said they weren't paid for with the money he collects from residents who live there.

'That's not healthy'

As a lobbyist who helped craft the 1980 law that created community development districts, Tallahassee lawyer Ken van Assenderp is one of their biggest boosters. He calls them one of the most efficient ways to build and maintain quality communities in Florida.

"Their track record is better than the county and city governments," van Assenderp said. "Hardly any of them have any controversy."

But van Assenderp acknowledged that districts' powers can be abused. For example, he said Thomason cannot force homeowners to pay assessments directly to his private company.

"If the government doesn't collect it, then it's an informal arrangement and can't be enforced," van Assenderp said.

He said the intent of the law was not to enable developers like Thomason to control the district board after more than a decade.

"That's not healthy and definitely raises questions," van Assenderp said.

He also said Thomason should not hold community development district meetings in a South Tampa attorney's office more than 30 minutes from the subdivision.

"This is a local government," he said. "He must make it accessible to homeowners."

Thomason said he holds the meetings in the lawyer's office to keep costs down. But Madeline Moos said holding the meetings outside the subdivision guarantees no homeowners will attend.

"He makes it impossible to follow what's going on," she said.

Thomason said homeowners have nothing to worry about and he saves them money. But he won't make available records showing how he spends the $240,000 his company collects from those homeowners for maintenance.

"I'm not showing that to anyone."